A new parametric crop-yield risk transfer solution has been launched by Praedictus Climate Solutions in partnership with The Speedwell Group.
Praedictus Croplock offers an index-based solution for managing crop yield risk, with parametric triggers designed to match the predicted output for crops.
The solution makes use of proprietary crop yield modelling techniques and Praedictus has constructed indices specifically designed for use in parametric risk transfer products.
Each index represents an ongoing prediction of crop yield for a given commodity over a given region, enabling risk transfer buyers to acquire hedging or insurance protection to reduce potential downside.
The historical data used for structuring and pricing risk transfer against the Croplock indices will now be available through Speedwell Weather as part of the Speedwell SuperPack®.
In addition, settlement data for executed risk transfer transactions will be supplied by Speedwell Settlement Services Ltd.
“Agriculture markets need better, more widely available, and more flexible tools to manage crop production risk. Fortunately, the science of how crops grow provides a solid, but so far largely underutilized, basis to accomplish this. Praedictus has captured the best of this science in a flexible and scalable modelling platform and is thrilled to be able to offer these capabilities for a wide range of agricultural markets around the world,” explained Josh Perlman, CEO of Praedictus Climate Solutions.
David Whitehead, CEO of Speedwell Settlement Services added, “We are excited to provide these innovative indices to the parametric market. The Praedictus team brings a technologically advanced index that has great potential as a hedging tool. Speedwell brings years’ of experience in this market as well as a suite of products designed to facilitate the use of these indices as hedging tools. As with all indices provided by Speedwell Settlement Services, we will be providing the full range of services including Settlement Specification, Settlement Data, as well as Settlement Certificates.”