The discomfort index was developed using past and future temperature and humidity data, and derives its name from the discomfort people feel when the index exceeds 80 in Japan, Ito added.
Counterparties can purchase day-count call options where they receive payment if the index is below 80 for a number of pre-specified days. Ito said Mitsui Sumitomo plans to develop other weather derivatives in the near term.
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