Ex-Aquila weather traders find new jobs

Ravi Nathan, formerly head of weather trading at Missouri-based energy company Aquila, is to join insurance firm ACE, heading its weather risk management division out of its Philadelphia office. Meanwhile, six of his former Aquila colleagues are set to join XL Weather & Energy, the Connecticut-based weather risk firm previously known as Element Re.

Nathan’s return to work had been the source of speculation since Aquila left the energy and weather trading markets in August 2002. Aquila is thought to have commanded around 40% of the weather risk market, picking up a significant amount of Enron’s business, following the Houston-based energy trader’s bankruptcy. Although Aquila is still regarded as one of the pioneers of weather derivatives trading, the firm’s mounting credit woes forced it to abandon its sizeable energy and weather trading business.

At the end of August, Nathan, one time head of the Weather Risk Management Association, told RiskNews that five reinsurance companies that invested in Aquila’s weather business, were likely to retain their partnerships with his old weather trading group – a team that has now dispersed. “Hiscox, Mitsui Sumitomo, Kemper, Hanover Re and American Re have all expressed an interest in continuing to work with us,” Nathan told RiskNews at the time.

Following Aquila’s retreat from trading, it reached an agreement with Chicago-based hedge fund Citadel Investment Group to provide Aquila traders with potential career opportunities. Nathan confirmed he had approached Citadel, but at the time declined to name any other interested parties.

Nathan will start work at ACE on March 3, an ACE spokeswoman confirmed. He plans to build up a team focused on providing weather risk management solutions to the end-user market. Tempest Re, ACE's Bermuda-based reinsurance arm, had been a participant in the secondary weather market, but is said to have scaled back its involvement early last year.

Meanwhile, XL Weather & Energy has hired six former Aquila weather traders. Joseph Leto has been named vice-president and will head XL’s newly established Kansas office, which will also include assistant vice-presidents Kurt Nuss and Paul Wohl. James Hickman will become a vice-president, and Stephen Sly and Jonathan Bundy assistant vice-presidents at XL’s Stamford, Connecticut headquarters.