With the setting up of insurance policies and the paying out of claims for natural catastrophes such as hurricanes and earthquakes taking increasingly more time to process, one company has come up with an innovative solution to the problem.

RMS Consulting, whose vice-president of risk markets John Stroughair and his manager Paul Rockett were attending the RIMS 2008 conference in San Diego this week, has designed two new catastrophe models to provide an accurate set of data to calculate the claims.

The WindX product, which was only launched last month and has applications for places such as high value properties and theme parks in the US, allows insurance to be written, linked to wind speeds.

Meanwhile, the Paradex product comes in two forms — the US Hurricane and European Windstorm versions.

RMS is in the process of building 110 wind stations around the east side of the America to monitor the wind speeds because the existing ones often fail or get turned off in the event of a hurricane.

"It has been very difficult to design any insurance directly linked to wind speed," said Mr. Stroughair.

"But we are now going to have live data in the event of a hurricane as a result of this technology."

The structured insurance product is linked to a particular trigger wind speed and because RMS has partnered with Bermuda-based RenaissanceRe to do this project, there is a large capacity to cover it.

Paradex has been built on top of the WindX model and works by calculating wind damage, wind speed and certain storms.

"If you take wind speed with exposure data you can work out what wind speeds in are in a particular zone and losses would result from that," said Mr. Stroughair.

"The advantage is that you get a settlement much faster and for investors it is simpler and transparent to understand."

The European version of Paradex draws on data from the Met office in 12 countries because wind speeds tend to be lower than in the US, therefore there is no need for wind stations.

Meanwhile, take-up of WindX has been good so far despite its short time on the market, according to Mr. Stroughair.

"We have been working with Marsh in the US and there has been quite a lot of interest in the insurance," he said.

"I think the immediate thing is to get the wind stations build around the east side and we need to get it done all the way up to New York because there are a lot of high value real estates up north and it will be useful to cover that."

Mr. Rockett said the real beauty of Paradex was the ability to settle a claim both quickly and efficiently.