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PCS - Emerging Risks, New Opportunities

Britain grinds to a halt due to snow. What cost to business owners?


The southeast of Britain has seen the heaviest falls of snow for 18 years overnight with much more forecast to come over the course of the day. Public transport is non-existent, even in the capital city London, and millions of workers have not made it into their offices and shops today.

The Federation of Small Businesses for the UK estimates that as many as one in five workers will not make it into work today and that this could cost the British economy £1.2b. That’s a large loss for a weather event which has not caused any direct damage to infrastructure.

There seems to be an opportunity for the weather risk management industry to step in and provide businesses with cover to protect them in these rare cases. Normal business interruption insurance can cover this event for many but the claims process could be a long affair. A product which pays out to business owners based on the amount of snowfall in inches would seem a better way to cover this kind of risk. Settlements can be made much more quickly where a defined index is used to trigger a payout.

Plenty of weather risk management products are available to cover businesses but I believe the profile of the industry is not yet high enough for business owners to be aware of the opportunities for protection that exist. Where people are aware of weather risk management proucts there is generally a perception that they are costly and difficult to understand. A media worthy event such as this is the perfect time to promote your weather risk transfer solutions to small and medium enterprises!

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