Storm Risk Solutions Opens up Weather Derivatives Market.Storm Risk Solutions Will Help Corporations Optimize optimize - optimisation Capital Investments by Controlling the Uncontrollable Risks of Uncertain Weather NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Storm Risk Solutions, a company that helps large and mid-sized corporations manage the financial impact of adverse weather on their cash flow, will debut this spring. Storm Risk Solutions' value proposition resides in its development of the first standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. method by which companies can measure the fiscal effects of weather uncertainty on their business. Storm Risk Solutions then provides clients with access to financial protection, helping them invest for growth rather than reserving for potential weather-related loss. Storm Risk Solutions is founded by David Riker, known for his pioneering role in migrating the insurance business online through his company, eCoverage. Storm Risk Solutions is backed by venture capital fund RRE RRE Red Rock Eater (News Service) RRE Road Race Engineering RRE Remote Roof Easy RRE Residential Real Estate RRE Rise-And-Run-Length Encoding RRE Royal Radar Establishment (Great Britain) Ventures. "Markets and management are the two best predictors of success for our investments", says RRE co-founder, Stuart Ellman. "The overwhelming concern for climate change has created an immediate opportunity for Storm as a corporate utility in a risk market representing greater than $3 trillion in the U.S. alone. Having backed this management team before, we are highly confident that Storm will quickly create a dominant presence and lasting value." Storm Risk Solutions is creating standardized indices that will initially allow companies in the energy, construction, aviation, ski, outdoor entertainment and agriculture sectors to analyze and track the impact of seasonal volatility on their business results, then price and execute a weather-indexed OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). derivative to reduce weather-related uncertainty. Just as corporations use interest rate or currency derivatives to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. volatility in credit or foreign exchange markets, Storm's business model and products allow corporations to create a standardized means of measuring, pricing and transferring weather related risk. Storm Risk Solutions expects its average contracts to be in the order of $10 million, which it will place with leading risk management firms, but it has the ability to write contracts in excess of $50 million. "Corporations are now facing unprecedented weather-related uncertainty with significant consequences on cash flow," notes Riker. "We are in active discussion with many of North America's best-known corporate brands, who've told us how troubled they are about the impact adverse weather has on their profit potential and how excited they are that the weather risk management industry has come of age. We are enthusiastic at their overwhelming response to our strategy and their realization that they can now manage uncontrollable weather with the same sophistication so·phis·ti·cate v. so·phis·ti·cat·ed, so·phis·ti·cat·ing, so·phis·ti·cates v.tr. 1. To cause to become less natural, especially to make less naive and more worldly. 2. as other forms of corporate volatility." Storm Risk Solutions' products, offered through its online platform, and executed on its proprietary Electronic Communications Network The transmission channels interconnecting all client and server stations as well as all supporting hardware and software. , gives corporations two ways of reducing the impact of weather on their income statement: * Industry-specific benchmark indices, providing historical and forward-looking relevance to the impact of weather on a corporation's revenue or costs. * Standardized weather-indexed-OTC derivative contracts with A-rated financial capacity to hedge revenue and supply costs influenced by temperature, wind and precipitation precipitation, in chemistry precipitation, in chemistry, a process in which a solid is separated from a suspension, sol, or solution. In a suspension such as sand in water the solid spontaneously precipitates (settles out) on standing. . "We are also in discussions with leading risk management firms, investment and commercial banks about distribution of our data and origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real tools, and look forward to revealing details in the next few months," said Riker. About Storm Risk Solutions Storm Risk Solutions (Storm) removes the uncertainty of weather by providing the data, analysis and risk transfer capacity that helps companies invest for growth rather than reserving for potential weather-related loss. Storm acts as a technology-enabled originator Originator A bank, savings and loan, or mortgage banker that initially made a mortgage loan that is part of a pool. Also, an investment bank that has worked with the issuer of a new securities offering from the beginning and is usually appointed manager of the underwriting in the transaction of weather-indexed OTC derivatives, facilitating 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 In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. , as well as the price and availability of commodity resources. Storm Risk Solutions began operating in October 2006. It has priced deals for various global utility and agricultural companies. Visit Storm Risk Solutions at www.stormexchange.com. |
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