Arbol, a technology driven marketplace that uses blockchain and smart contracts, has acquired well-known specialist provider of weather risk transfer and weather hedging solutions eWeatherRisk, as it looks to revolutionise the way weather risk transfer contracts are bought and sold.
eWeatherRisk is a long-time weather risk management and transfer market participant that was headed up by President and CEO Brian O’Hearne a veteran in the weather risk management market, having headed up the weather business at reinsurance firm Swiss Re and prior to that GuaranteedWeather. We last interviewed Brian back in 2011.
eWeatherRisk specialised in the structuring and sale of tailored weather derivatives linked to an underlying weather index, so a parametric contract in derivative form and offering incredibly fast payouts.
Arbol has developed a weather risk marketplace with a focus on fast-paying protection, akin to insurance but without the need for lengthy claims processes, making parametric triggers an ideal use-case.
Arbol, Inc. acquired all of the assets of eWeatherRisk and intends to utilise its proven solutions within Arbol’s cutting edge weather risk platform, to offer lower cost products and an enhanced user experience to those seeking weather risk transfer products.
With Brian O’Hearne now taking on the role of Head of Sales and Chief Compliance Officer at Arbol, while ex-Director of Structuring at eWeatherRisk John Coleman becomes Head of Structuring at Arbol, the company will have a channel to bring sophisticated clients to use its technology based market platform and also structure new opportunities for those seeking effective weather risk financing protection.
“Our vision is to revolutionize the weather risk market via big data and smart contracts enabling businesses of any size or complexity to manage the uncertainty and volatility of weather at minimal cost,” Arbol explained.
Arbol says that its marketplace “leverages blockchain and smart contracts to sharply reduce operational costs by allowing users to create automated contracts that pay based on data.”
While it uses parametric or weather index triggers, it notes that even parametric insurance, which is seen as a faster and cleaner way to structure many catastrophe and weather insurance products, is still encumbered by the lack of efficiency in the broader insurance and reinsurance market, due to the “high operational costs and lack of transparency.”
The weather risk transfer market is one that is ripe for digitalisation and it will be interesting to see how this coming together of experts in that risk transfer marketplace with a technology-led approach to selling weather risk protection helps to drive the sector forwards.
Stonybrook Capital served as the exclusive financial advisor to eWeatherRisk on this transaction.
“It was a pleasure working with the eWeatherRisk team and owners. The transaction represents a unique combination among innovators in the dynamic and evolving weather risk market,” commented Todd White, Managing Director of Stonybrook Capital.
“I am grateful to have worked with Stonybrook on this transaction. Their knowledge and experience proved critical in executing a transaction that was mutually beneficial to all parties involved,” added Tim Watts, Director of eWeatherRisk.