weather insurance

Weather Insurance Allianz, Europe’s biggest insurance group, plans to exploit interest in environmental issues among the financial community with a division to produce climate-related products for its bank and insurance businesses.

The German group has set up Allianz Climate Solutions to meet rising demand for weather insurance and climate-related financial instruments, highlighting the industry’s hunt for opportunities as public interest in weather-related issues grows.

By Ivar Simensen in Frankfurt November 4 2007found at http://www.ft.com

“Greater awareness of climate issues such as global warming is creating new opportunities,” said Armin Sandhoevel, the division’s chief executive.

“The group has been set up to meet this rising demand amid the realisation that the world needs more and better renewable energy, clean technologies and power markets.”

The interest in and potential to profit from concern about climate change has led to new investment products for retail markets, environment-focused stock indices, and investment in trading opportunities such as those with emissions credits.

Allianz’s climate division is not the group’s first move in the area.

Dresdner Bank, Allianz’s banking subsidiary, entered a joint venture with Gazprombank of Russia to invest in the rapidly developing carbon emissions trading market at the beginning of the year.

The venture invests in projects that generate CO2 certificates through the Kyoto protocol and repackage them to resell to investors.

The climate arm will search for similar opport-unities.

The move reflects the strategy of Michael Diekmann, Allianz chief executive, to create a one-stop-shop to get more out of the company’s various divisions.

Mr Sandhoevel said his team was a group of 10 people, most of them recruited internally from across the group, to search for investment opportunities and products ranging from car insurance to renewable energy fund investment and tradable assets.

He said the team could more than double in size in the next two years, depending on its success.

Falaknaaz Syed / Mumbai November 06, 2007 found at business-standard.com

Farmers will no longer have to wait endlessly for claiming their payments from the government.

A weather-based crop insurance scheme (WBCIS) is being launched in various states as a pilot project through the state-owned Agriculture Insurance Company (AIC), and two private insurers, ICICI Lombard General Insurance and Iffco-Tokio General Insurance.

The scheme provides insurance protection against potential crop losses due to adverse deviations in rainfall, frost, heat, wind speed, relative humidity and various weather factors that have an impact on crop productivity.

Weather risks are covered from sowing to maturity of the crop and the sum insured is equivalent to the cost of cultivation. The claims to farmers will be paid within 45 days from the end of the risk period. The risk period for Kharif season starts from April and ends in September, while for Rabi, the risk period starts from November.

The state and central governments will subsidise the premium 50:50 for WBCIS. Farmers will have to pay 2.5-3 per cent of the premium for Kharif (food and oilseed crops) and 1.5-2 per cent for crops in rabi season. The claims will be fully paid by AIC.

Speaking about the advantages of WBCIS, AIC chairman, M Parshad said, “WBCIS is a more transparent scheme compared to the present National Agriculture Insurance Scheme. The premium for WBCIS is subsidised by the government which we receive in advance. Secondly, weather data, which is the basic determinant in paying a claim, can be processed real time and there is no time lag. Thirdly, there is no human intervention as the data is recorded automatically.”

For launching the pilot for Rabi season, the insurer has completed discussions with seven state governments and have identified 250 locations and six crops. The states are: Uttar Pradesh, Rajasthan, Madhya Pradesh, Bihar, Chattisgarh, Haryana and Punjab.

The subisdy for the entire year is Rs 100 crore. The estimated sum insured is around Rs 1500 crore. The pilot for kharif has been completed in Karnataka. Out of the total 770 hoblis, 70 hoblis were covered for weather-based deficiency and excess rainfall.

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Sunshine is delicious, rain is refreshing, wind braces us up, snow is exhilarating; there is really no such thing as bad weather, only different kinds of good weather.

~John Ruskin

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