Swiss Re Insurance-Linked Fund Management

PCS - Emerging Risks, New Opportunities

Eurex the first European exchange to offer hurricane catastrophe futures


Eurex, one of the world’s largest derivatives exchanges and the largest clearing house in Europe, have announced today that they are to become the first European exchange to offer hurricane futures for trade and clearance. The hurricane wind damage futures will launch on the 29th June 2009 and demonstrate the continuation of Eurex’s aggressive push into new asset classes.

Peter Reitz, a memberof the Eurex board, said: “We are very pleased to be the first European exchange to offer hurricane futures to our customers. The current financial crisis has led to a re-evaluation of counterparty risk, creating demand for centrally cleared hurricane contracts to complement currently bilaterally executed ISDA documented hurricane swaps. Our new offering will foster this need by offering central clearing services through Eurex Clearing which brings effective risk management to the market and mitigates counterparty risks. Further we bring in the traditional benefits of listed futures such as standardization and anonymity as well as Eurex’s global distribution capability.”

The new futures will be available in three regional zones to start with; USA nationwide, Florida and the Gulf Coast states and will be available only in U.S. dollar denominations. The contracts will have a number of trigger levels ranging from $10b to $50b. Contracts will either expire worthless or at $10,000 per contract depending on the actual loss experience from a single hurricane. Data for settlement of the contracts will be sourced from the ISO Property Claims Services.

This offers reinsurers, banks, hedge funds, asset managers and other potential market participants (such as energy companies) within Europe a way to easily access the hurricane futures market and to get deals both traded and cleared under one roof. We hope to see Eurex broaden their product range and it would be fantastic if they could launch a similar set of products for the European windstorm season.

Artemis Live - ILS and reinsurance video interviews and podcastView all of our Artemis Live video interviews and subscribe to our podcast.

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.

Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.