Météo-France and Euronext team up to launch Metnext, specialized in indices for weather risk management
France's national weather service Météo-France and Euronext, a subsidiary of NYSE Euronext, have teamed up to launch a joint venture named Metnext specializing in innovative solutions for index-based management of weather risk. Metnext, in which Météo-France holds a 65% interest and Euronext the remaining 35%, will initially offer two types of service for businesses, insurance and reinsurance companies, and banks.
Indices tailored to the specific needs of individual firms in industry or other areas of business will enable them to anticipate, and thus manage, their exposure to weather risk more effectively. They will be based on historic data concerning the impact of variables such as temperature, rainfall, and the direction and wind speed on management parameters. Historical and forecasted indices, each designed for one business in particular, will be available to cover forecast periods ranging from a few days to several weeks or several months, depending on the specific needs of the firm and the context it operates in. They will provide invaluable support for businesses to plan ahead and manage operations in a way that makes effective allowance for meteorological variables, which many studies show have a significant impact on activities and results in a wide range of sectors. Supply chain, sales, marketing and advertising are all concerned. According to studies conducted by Météo-France, among others, between 20 and 30% of GDP in the world's most industrialized economies is directly affected by the weather, and the proportion rises to 70 to 80% if indirect effects are taken into account.
Metnext will also provide market participants with the tools they need to structure products to cover weather risk, helping them to develop indices serving as benchmarks for hedging contracts. These indices will enable the risk underwriters and brokers who are Metnext clients to offer their own clients weather risk management contracts. Drawing on the expertise of Euronext in setting up and disseminating indices and on that of Météo-France in climatology and meteorology, Metnext also has the advantage of being completely neutral and thus all the more reliable for users. -http://www.euronext.com
Comment and add to the story without registration, but keep the comments meaningful please. Links are not accepted.
