CelsiusPro AG, the Swiss-based weather risk management specialist, has teamed up with Aon Benfield Securities to offer weather risk cover to the UK construction industry. CelsiusPro have partnered with the UK’s largest construction trade association, the Federation of Master Builders, giving them access to much of the UK’s construction industry.
The trade association promotes weather certificates to their members, they represent around 10,500 building companies, and now CelsiusPro can sell them tailored weather certificates such as Frost Day or Rain Day covers. The construction firm pays a premium and in return receives cover which provides an automatic payout if predefined weather parameters, such as a predefined number of frost or rain days, are exceeded.
The weather certificates can be structured and purchased online using CelsiusPro’s platform which allows for execution, tracking a payment of weather certificates. The client construction firm can track their cover as it develops using an online account.
The cover is being offered in conjunction with Aon Benfield Securities. Mark Rueegg, CEO of CelsiusPro, said; “It is an exciting challenge to combine our weather derivative know-how and platform capabilities with the local industry specific knowledge of the construction association as well as the capital markets and insurance products expertise of Aon Benfield. We are very pleased with the outcome and our ability to offer tailored products for the UK market. After the UK suffered from several harsh winters, our solutions are aimed at protecting British construction companies against weather-related financial risks due to disrupting frost events.”
This is CelsiusPro’s second partnership with a construction association after they partnered with the Dutch construction association Bouwend Nederland last year. The new partnership comes at a great time in the year as UK construction firms look ahead to the coming winter and make contingency plans for bad weather. The last two winters in the UK have been harsh and construction firms will have lost many days of work due to freezing temperatures, so being able to cover those risks should be welcomed.
David Hill, Director of the National Register of Warranted Builders, a subsidiary of the Federation of Master Builders, said; “In developing this product we listened to feedback from our members about how their businesses and finances had been affected by periods of extreme weather. It seems that the weather is becoming more unpredictable in the UK, and perhaps all over the world, and this cover helps to ease the burden of lost earnings at times when our members and their employees are unable to work due to adverse weather conditions.”
These industry focused, customised weather risk management solutions which use weather derivatives to underwrite the certificates sold are becoming more common all the time. They prove an excellent way to bring weather risk solutions to specific industries in a simple to understand and easily executed manner.
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