Throughout Florida, a series of 30-foot concrete poles are beingerected with what look like wingless airplanes on top--theharbingers of a new form of insurance.

Behind these installations of super-strong anemometers forwind-speed recording is an outfit called WindX, which will use theequipment to provide certified data for what is referred to as"parametric insurance."

Peter Nakada, the managing director of Risk Management Solutions(RMS) Consulting in Hackensack, N.J.--which is partnering withWeatherFlow, a firm which is providing the wind-monitoringdevices--said parametric insurance is a simpler way to insurerisk.

He explained that unlike traditional insurance, where the payoffcomes after a measured amount of damage is confirmed, parametricpays off when a certified amount of wind speed, ground shake orflood water level hits predetermined policy levels.

Mr. Nakada said the parametric coverage is something that shouldinterest commercial concerns, because it is possible for weatherevents to interrupt operations without causing physical damage,which he said is generally required before business interruptioncoverage kicks in.

There have been jokes that traditional insurance is "the rightto litigate over a claim," whereas with parametric insurance, "thewind either blew 110 mph or it didn't. So someone shows up withmoney a week after the wind stops. It's quick-pay, no hassle," heexplained.

Mr. Nakada said his firm developed the parametric idea nearlytwo years ago and has been working with insurance industry playersto develop different products based on it. He said RMS turns rawwind-speed data and other information "into numbers that people canuse to settle transactions."

RMS, he explained, plans a global parametric program calledParadex, which will involve using equipment sources other thanWeatherFlow to offer monitoring and data for earthquake and floodin the United States and elsewhere.

Concerning WindX, he said, "we are just launching this solutionand finalizing an agreement with a major broker to offer this, andthere is one insurance carrier who is currently offering it." Hedid not identify either party.

He said that Paradex plans to serve the capital markets byproviding the parametric indices for catastrophe bonds, industryloss warrantees and derivative contracts.

For cat bonds, Mr. Nakada said RMS will create indices based onwind speed that someone issuing a bond would use to create atrigger. In the past, he noted, cat bonds have traditionally paidoff after an industry loss estimate certified by the Property ClaimServices unit of the Insurance Services Office in Jersey City,N.J.

WindX, he said, has already been used to structure onederivative transaction involving a reinsurer having its riskcovered by a hedge fund. The arrangement is based on average windspeed across an area of Florida wind stations, and "the hedge fundwould reimburse the reinsurer if the wind hit a certain speed."

The "hard launch" of the program will come this spring,explained Mr. Nakada.

He said "the goal for Paradex is to instrument theworld....We're thinking every peril in every location."

For earthquake information, Mr. Nakada said his firm plans towork with the U.S. Geological Survey, noting that "we tend topartner with people who put measurement devices on the ground."

He said so far 40 wind-monitoring sites have been committed toin Florida, along with seven sites in Houston, and "we will work onthe Gulf and Northeast after that."

The company, he related, has identified 100 areas in the UnitedStates where it wants WeatherFlow to emplace anemometers.

Mr. Nakada said the weather-hardened concrete installations withsolar panels and long-life batteries for power are stronger thanthe typical anemometer installation, which can't withstand a windof 225 miles per hour.

Still, he noted, the tougher equipment is only rated for 140mph. Over that speed, he explained, the wind can fling small carsat the poles, which could put them out of service.