Highlighting the need for long range weather planning
On the Artemis website today, I read one post which spoke to the pain that the heavy February snowfall caused for UK retailers, noting the need for weather risk protection. Under current economic circumstances, the need for prudent financial risk management is paramount, and the weather risk/weather derivatives industry should view this as an opportunity rather than an obstacle. Consumer spending is down, and this can only be magnified when weather events like those in the UK in early February keep additional traffic away from stores. The first step in protecting against unfavorable weather events is a reliable guide, and this is where the Weather Trends long range forecast fits an important niche. Typically, weather risk contracts are written based on seasonal expectations, but our process allows planners to get to a much more granular level when identifying the high risk periods. Our UK long range February 2009 forecast, which was issued in March 2008, called for January 2009 to be relatively dry, and then for a shift in the second week in February period to a cold and significantly wetter pattern than the one seed during the same period of the prior year (contact WTI for verification statistics). As our CEO Bill Kirk noted in a weekly report to clients, the forecast for the second week in February verified with snowfall totals that were 38% higher than normal, and over 200% more than the year prior. A retailer looking to protect against the risk of poor weather impacting store traffic ahead of Valentine’s Day could have minimized some of the pain with this accurate forward view and a simple weather hedge, which are now available through numerous commercial providers.
This is just one example of how, even in tough economic times, the Weather Trends International team of business weather experts can help minimize negative financial performance when Mother Nature doesn’t cooperate.
