INDEPENDENT EXPERT CONSULTING FOR THE WEATHER RISK MARKET
AGRICULTURE & FOOD
PRODUCTION
CHALLENGE
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Adverse weather conditions (frost, excess heat, drought, excess moisture) could reduce yields and degrade quality of crops.
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International trade could drag prices down even in case of poor local harvest resulting in very low farm revenues
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Traditional insurance covers high deductible and exclusions leave growers with protection gaps on most of their crops. Claim process of traditional insurance covers is painful, and payment happens only long time after the covered loss event occurs.
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Financial options to hedge price risk are only available for a few crops and do not enable adjustment to the actual production and therefore often lead to over-hedging.
WHAT WE DO
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Training to index-based weather insurance that enables quick payouts, quanto options that offers quantity-adjusted price hedges.
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Independent risk management analyses with joint modelling of volumetric and price risks.
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Design of index-based risk transfer solutions, analysis of associated basis risk and independent valuation.
SERVICES
A FEW USE CASES
TRADING
CHALLENGE
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Local production shortfall reduces revenues of cooperatives and local grain traders.
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Unexpected deviations of yields from their expected values at harvest time and large moves on prices that generally follows make it difficult to achieve a good average selling price for cooperative members.
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Financial options to hedge price risk are only available for a few crops and do not enable adjustment to the actual production and therefore often lead to over-hedging.
WHAT WE DO
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Training to index-based weather insurance that enables quick payouts, quanto options that offers quantity-adjusted price hedges.
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Independent risk management analyses with joint modelling of volumetric and price risks.
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Design of index-based risk transfer solutions, analysis of associated basis risk and independent valuation.
SERVICES
A FEW USE CASES
PROCESSING
CHALLENGE
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Production shortfall significantly reduces revenues and margins.>
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Excess production creates opportunistic competition from white-label brands that erodes market share and damage client loyalty.
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Weather conditions (excess moisture, frost, excess heat) could damage stocks.
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Adverse weather conditions could significantly increase processing costs.
WHAT WE DO
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Training to index-based weather insurance that enables quick payouts, quanto options that offers quantity-adjusted price hedges.
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Independent risk management analyses with joint modelling of volumetric and price risks.
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Design of index-based risk transfer solutions, analysis of associated basis risk and independent valuation.
SERVICES
A FEW USE CASES
RETAIL
CHALLENGE
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The consumption of food products is weather-sensitive and therefore retailers revenues depend on the weather and their ability to factor weather forecast information in their operations and especially stock management.
WHAT WE DO
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Training to weather intelligence and index-based weather risk transfer solutions.
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Independent weather risk management analyses.
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Design of index-based risk transfer solutions, analysis of associated basis risk and independent valuation.
SERVICES
