WEATHER DERIVATIVES - A NEW CONCEPT IN THE WEATHER INSURANCES
WEATHER DERIVATIVES - A NEW CONCEPT IN THE WEATHER INSURANCES

Summary/Abstract: As the negative effects of climatic warming are more and more obvious, the demand for insurance solutions to cover the costs resulting from weather whims shall increase in direct ration with risk exposure. Although the situation might be interpreted as a business opportunity, in order to be able to offer the proper cover it is necessary to comply with fundamental demands regarding the weather risk insurance. Thus, when conceiving viable insurance solutions of the consequences intervened in case of a catastrophic event generated by harsh weather conditions we must take into consideration factors such as measurement possibility of the respective risk, in order to decide if this can or can not be accepted. Weather risk management is a quite new process wherethrough many businesses can have an advantage regarding the manner of weather effects handling, with positive results upon earnings and expenses. The weather risk management instruments are weather insurances and weather derivatives.

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