Storm Exchange, Inc., a leading financial technology company that helps corporations maximize shareholder value by reducing the financial impact of unplanned weather on earnings, today unveiled an electronic weather exchange powered by 500 proprietary, industry-specific weather indices.
NEW YORK (BusinessWire EON) April 11, 2007 --
Storm Exchange, Inc., a
leading financial technology company that helps corporations maximize
shareholder value by reducing the financial impact of unplanned weather
on earnings, today unveiled an electronic weather exchange powered by
500 proprietary, industry-specific weather indices.
The launch of Storm Exchange
represents the first opportunity for corporations in industries such as agriculture,
energy,
travel,
retail
and construction
to benchmark the financial impact of weather on earnings, to assess
management alternatives, and if applicable, to purchase derivatives
contracts to hedge weather risk.
“Climate change is having an increasingly
uncertain impact on corporations’ revenue and
costs. Management must now make decisions that demand the most
sophisticated financial considerations,” said David
Riker, President & CEO of Storm
Exchange. “Our advanced weather
correlation analysis gives clients the confidence to make more effective
weather-related financial decisions, to increase leverage and invest for
growth rather than reserving for potential weather-related loss.”
Storm Exchange’s
weather indices give clients a standardized means to assess the cost
or benefit of deviations in seasonal temperature, precipitation and wind
for their industry, categorized by time of year and geography.
“Weather is inherently random, but
increasingly volatile seasons have significant financial implications.
Construction lenders, for example, will benefit from our solutions that
help them assess and mitigate project interruptions caused by wind,
rainfall or temperature. Similarly, the agricultural industry will
benefit by reducing the financial impact of low crop yields due to too
little rain, or cool temperatures,” notes Riker.
Storm Exchange’s
average contracts are in the order of $10 million and are executed
by leading risk management firms, but it has the ability to originate
contracts in excess of $50 million. Unlike indemnity policies in
insurance, Storm
Exchange’s indexed derivatives contracts
are priced and paid out based on the occurrence of predefined weather
parameters, not on an incurred loss.
Storm Exchange is backed by
leading venture capital funds RRE Ventures
and Venrock Associates, as well as
other investors. David
Riker, Storm Exchange’s
founder and CEO, is known for his pioneering role in migrating the
insurance business online through his company, eCoverage.
About Storm Exchange
Storm Exchange, Inc.
maximizes shareholder value by removing the financial uncertainty of
weather. Storm provides the
data, analysis and access to financial risk transfer capacity that helps
companies invest for growth rather than reserving for potential
weather-related loss. Storm
facilitates the exchange of options indexed to recorded weather, such as
temperature, precipitation and wind speed. To complement financial
solutions, Storm publishes
proprietary indices, benchmarking the impact of weather on future demand
for goods and services, as well as the price and availability of
commodity resources.
Storm has been working with
companies in energy, mining, agriculture, manufacturing and skiing
industries since September 2006. Visit Storm
Exchange at www.stormexchange.com,
and David Riker’s
blog at www.theweatheroption.com.
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