Weather risk management and weather derivatives trading news

The National Commodity and Derivatives Exchange (NCDEX) of India is working on the construction of a suite of weather indices to facilitate the trading of weather futures, after the central government recently added weather to its approved derivatives list.

The weather derivatives market has seen activity levels roughly quadruple this year, as trading in weather futures and options on the Chicago Mercantile Exchange (CME) soared, with the main driver said to be the belief that extreme weather events are set to increase.

BGC Group, Inc., the global brokerage and financial technology company, has launched a new weather derivatives broking desk, with the hires of well-known weather hedging and trading specialists Nicholas and Eric Ernst.

US energy company Star Group (formerly Star Gas Partners) has benefitted from its weather derivative arrangements again in the first-quarter of 2023, recording a full recovery under the terms of the degree day contract it has in place.

London headquartered specialty insurance and reinsurance firm Beazley has teamed up with Arbol, a technology-led underwriter of parametric risk transfer, climate and weather insurance or reinsurance business, to deliver a range of parametric climate and weather risk transfer products to clients.

Arbol, a technology-led underwriter of parametric risk transfer, climate and weather insurance or reinsurance business, has become the latest company to establish a collateralized insurer class of company in Bermuda, named Arbol Re Ltd.

The African Risk Capacity (ARC), a provider of parametric disaster insurance products, has signed a first-of-its-kind multi-year, multi-peril agreement with the Government of Djibouti, designed with the help of parametric specialist Descartes Underwriting to protect the lives and livelihoods of one of the most climate-vulnerable communities on the African continent.

Swiss Re Corporate Solutions has collaborated with re/insurance broker Aon and the International Finance Corporation (IFC) to develop an innovative parametric earthquake insurance solution for a hydroelectric power station in Nepal.

There’s a lot of room for innovation when it comes to weather risk transfer solutions, and with the energy transition and adoption of renewables providing additional opportunities, Rishu Ranjan of Swiss Re Corporate Solutions is optimistic for the future.

Arbol, a technology-led underwriter of parametric risk transfer, climate and weather insurance business, has partnered with Singapore based insurer Singlife with Aviva to provide it a parametric rainfall insurance product for travellers.