Charakterystyka derywatów pogodowych wraz z opisem wykorzystania instrumentu w Polsce i na świecie
Characteristics of weather derivatives, along with a description of use of the instrument in Poland and abroad

Summary/Abstract: Weather derivatives area is a relatively new instrument in the capital market. In the U.S. weather derivatives market grew out of energy. It is obvious that not only the energy industry company is accompanied by weather risk. An increasing number of companies from other trade are aware of the risks which are inherent to the variability of weather conditions. Construction companies, tourism and agriculture can also benefit from the using of weather derivatives. Using weather derivatives providers of products and services are able to protect consumers from the risk of the weather. Weather derivatives are financial contracts concluded on the stock market or over the counter, which are based on a weather index, mainly related to the level of temperature. OTC market is a futures market “tailored” for specific businesses. Therefore, the mechanism and parameters of the settlement of a contract may take any form. The main objective of such agreements in an enterprise is to prevent losses during adverse weather. Weather derivatives area is a contract between two parties that specifies the method of payment, depending on the meteorological conditions encountered during the contract period. It is important to understand the difference between weather insurance and weather derivatives. Weather derivatives do not replace insurance contracts, there are a number of differences between those two instruments. Benchmarking study presents a comparative analysis of the utilization of weather derivatives in each country.

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