Russian insurer ROSNO, a subsidiary of Allianz, has launched a new weather insurance product for their clients. Allianz Risk Transfer assisted ROSNO in the development of this new product to protect clients against unfavourable weather.
The Russian weather insurance market is still in development with not many products available easily. The drought and wildfires suffered last year across much of Russia has helped to raise the profile of insurance as a way to hedge the effects of climate variations and extremes.
Mr. Leonid Golovanov, head of ROSNO’s Agricultural and Natural Risks Insurance Department commented; “Last year, the weather itself evidenced the importance of this type of insurance for Russia. Weather insurance may be beneficial both to retail clients and large businesses, including energy suppliers and consumers, organizers of entertainment events, food and drink manufacturers, transport and construction companies, and shopping mall operators. For example, frosty conditions boost premise heating costs incurred by large retail outlets, and the summer heat similarly increases the air conditioning costs. Cold summer decreases the volume of retail trade in certain commodity articles, while warm winter reduces gas suppliers’ revenue. There are plenty of examples how weather affects various economic sectors”.
Under this new product ROSNO say they compensate lost income or unforeseen expenses borne by their client as a result of inclement weather conditions such as an unusually mild/cold winter, hot/cold summer or precipitation volume deviations. Weather conditions are assessed using indices of heating, cooling, rainfall and other weather types. The product has been developed with the assistance of Allianz Risk Transfer.