eAcumen launches weather risk platform

eAcumen said WeatherBook effectively captures the multiple scales of variability in climate data, as well as the complex inter-relationships between multiple contracts in its simulation engine, providing a major step forward in simulating the risk-adjusted returns on weather derivatives and most profitably managing portfolios of weather-related risk.

"Weather derivatives offer tremendous hedging and operational value to energy and agricultural companies, as well as any company exposed to weather-related earnings fluctuations," said Geoffrey Considine, vice-president of weather and risk analytics at e-Acumen. "Until now, it has been difficult to accurately quantify the benefits of weather derivatives and their associated risks. WeatherBook combines accuracy and ease of use in a single package that represents a significant advancement in the trading and use of weather derivatives."

WeatherBook can be used to price and manage many types of weather risk, such as contracts on degree-days, streamflow, precipitation, temperature, or other less common indexes. WeatherBook's cross-commodity capabilities also allows companies exposed to weather risk that also trade commodities such as natural gas or power, to better understand the complex relationships between weather derivatives and other commodities, interest rates, cash positions, and other portfolio variables. WeatherBook uses historical temperature data sets for 200 US cities to provide traders and risk managers with the ability to structure derivatives.

And in a related announcement California-based Risk Management Solutions (RMS) has said that it has upgraded its tornado and hail risk models for North America, thereby allowing insurance companies and weather derivatives traders to manage weather risk more effectively.

But news of product launches and model upgrades follows from last month’s weather risk casualty – Weather Risk Advisory (WRA). The UK-based software consultant, which provided weather derivatives trading platforms, has closed due to a lack of funds, having only managed to secure £1 million through venture capital of the £3 million it initially set as its target in September 1999. Jurgen Gaiser-Porter, former WRA research head, has joined Enron’s weather desk, and former WRA chief executive Peter Brewer is planning to establish a weather desk with an as-yet unnamed firm.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Next-generation technologies and the future of trading

At a Risk.net webinar in association with capital markets technology provider Numerix, panellists discuss the potential for increased adoption of the public cloud to boost investment performance, its impact on risk management and overcoming barriers to…

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here