Weather and Commodity Group

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NATHAN Risk Suite - Munich Re

Weather & Commodity Group

Weather has a substantial financial impact on business in wealthy industrialised economies. The affected sectors include not only energy and agriculture, but also travel, entertainment, construction and many more.

While companies have long used insurance to manage the risk of catastrophic weather events, weather-index-linked covers have grown to become an important risk management tool.

Weatherproof your business

Our risk management solutions provide financial relief to companies operating in commodity-linked businesses where shortfalls in sales or volatility in commodity prices occur. We develop bespoke risk transfer solutions for all industry sectors impacted by increased weather variability. Our financial hedging instruments are used to manage non-catastrophic weather-related risks, i.e. high-frequency, low-impact occurrences.

The volatility of weather can have a big impact on a company’s profits. Worldwide, the recent past has shown that unfavourable weather conditions are becoming more frequent. This can be observed over short time scales as well as in seasonal periods such as exceptionally mild winters or cool summers. Please see attached product information “Traditional Weather Products”.

Mitigate fluctuations in your power generation revenue 

We safeguard your traditional or renewable portfolio of energy resources from volumetric and price fluctuations. Our products mitigate variability and unpredictability of wind, solar irradiation, precipitation and streamflow. For additional protection against undesirable power prices, we customise dual-trigger weather/price options.

Renewable power generation is directly exposed to the volatility and unpredictability of weather. We believe that an appropriate risk solution can be found for virtually any power-generation-related risk. Our primary focus is generally on (but not limited to) protection against a lack of wind, solar irradiation, water and/or undesirable (negative) power prices. (Please see attached product information “Lack of Water”, “Lack of Wind” and “Lack of Sun”). We also provide unit outage risk management solutions for traditional power-generating utilities. We offer protection against loss of business income suffered as a result of an unplanned forced outage event.

Guarantee your physical delivery of the traded commodity

Our full range of physical natural gas services in the United States includes peaking/baseload supply, storage services, and a variety of risk management products.

To fulfil its supply guarantees, the Weather & Commodity Group maintains natural gas reserves in leased storage facilities. Active operating areas include California, the Mid-Continent, and the Gulf Coast (17 States), with access to most major gas supply basins in the U.S., including the Barnett and Marcellus Shales, and the Anadarko, Hugoton, Permian and Arkoma Basins. Our significant logistical infrastructure has established trading lines and relationships with over 120 counterparties and shipper agreements with 29 pipeline operators.

Ask us about our products

We develop bespoke risk transfer solutions for all industry sectors impacted by increased weather variability.

Our financial hedging instruments are used to manage non-catastrophic weather-related risks, i.e. high-frequency, low-impact occurrences. Weather index-linked hedging instruments, customised for individual companies. Quanto (dual) products are quantity-adjusting options which combine volumetric (weather) and price (commodity) triggers.

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This publication is available exclusively to Munich Re clients. Please contact your Client Manager.