Swiss Re Partners with CelsiusPro for Weather Derivatives

October 3, 2008

Swiss Re announced a partnership with Zurich-based CelsiusPro to offer weather risk transfer solutions to European companies. Swiss Re said it would “provide the risk capacity and expertise to support CelsiusPro’s online platform. The partnership allows companies to enter into weather derivative contracts via: and protect themselves against financial losses related to adverse weather conditions.”

According to Swiss Re more than two thirds of the “European economy is directly or indirectly dependent on atmospheric conditions.” The weather derivatives it will develop gives companies a “way of protecting themselves against the financial consequences of unfavorable weather conditions by purchasing weather risk transfer products based on parametric triggers.

“These provide compensation for loss of revenue or additional costs. The utility and energy sector, for example, is at the mercy of the weather with average energy consumption reduced by falling demand for heating in a mild winter and for air- conditioning in a cool summer. Other industries exposed to weather-related earnings volatility include agriculture, construction, travel and leisure, retail and wholesale, transportation and events.”

Small and medium-sized companies are the ones most likely to benefit from the new service. Swiss Re noted that it marks the first time they will have access to this type of platform services, as they have heretofore been an option that has “primarily been the privilege of large companies. The new platform allows companies throughout Europe to easily manage their weather risks through customizable weather derivatives and thus protect themselves against financial losses of adverse weather.”

Marcel Stäheli, Swiss Re’s Head of Weather & Energy Underwriting, commented: “Swiss Re has pioneered numerous new products and novel approaches to managing the risks of climate change. Through this partnership with CelsiusPro, Swiss Re fosters market growth and access to weather risk management for a new client segment.”

CelsiusPro’s CEO Mark Rüegg added: “We realize that companies are becoming more aware of their financial exposure to the effects of climate change and adverse weather. We are delighted to provide a transparent and easy to use risk management tool with an online price discovery and execution platform. Swiss Re is our ideal partner, combining vast experience in weather risk management with a very strong balance sheet.”

Source: Swiss Re –

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