When structuring a weather risk management program weather observations in the area of concern are often found to be unreliable.
Problem:
-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".
Solution:
-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 Weather
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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