When structuring a weather risk management program weather observations in the area of concern are often found to be unreliable.
-Existing stations not seen as "safe"
-Existing weather stations reporting sporadically or late.
-Nearest available weather stations may be some distance away leading to an unacceptable amount of "basis risk".
-Installation of a weather station specifically designed to meet the specific needs of the project at the exact location required.
-Historical analysis conducted using modelled data.
-Installed weather stations can be used for primary settlement, as back-up station(s), or as part of a quality control program used for the creation of certified settlement data.
Speedwell is the official provider of settlement data for the CME Australian Weather Contracts. In addition to exchange-based contracts we have acted as settlement agent
for hundreds of over-the-counter weather risk transactions.
With over twelve years' of experience in the weather risk market, Speedwell is in a unique position to offer the best possible solutions for our clients based on
a thorough understanding of the demands of the weather risk market - in particular relating to data integrity and reliability.
We have extensive understanding of what counterparties need to be comfortable with
a weather risk transaction. Independent third party confirmation of observations;
readily accessible observations for tracking a deal, and the transparency of methodology
are all key components for a successful project.
Coupled with our risk placement capabilities - provided by Speedwell Weather Derivatives
Limited which is authorised and regulated by the U.K. Financial Services Authority
- we are able to provide a full service for our clients: provision of weather
data; advice on pricing / structuring; risk-auction and settlement.
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