@article{Roth:9248,
      recid = {9248},
      author = {Roth, Michael and Ulardic, Christina and Trueb, Juerg},
      title = {Critical success factors for weather risk transfer  solutions in the agricultural sector: a reinsurer's view},
      address = {2007},
      number = {686-2016-47115},
      series = {Seminar Paper},
      pages = {9},
      year = {2007},
      abstract = {Agricultural yield and commodity prices are very sensitive  to weather patterns such as
drought, excessive rain, or  frost. As a result unseasonable weather can cause major  losses for
players in the agricultural value chain,  including input providers, farmers, commodity traders,
and  food processors. The National Crop Insurance Service (NCIS)  estimates that about 70%
of the losses suffered by the US  crop insurance scheme result from drought or  excessive
rainfall. In this paper information recorded by  PriceWaterhouseCoopers on behalf of the
Weather Risk  Management Association is complemented by Swiss Re's market  intelligence
to examine demand patterns for weather risk  transfer solutions. There is a particular focus on
the  evolution of demand from the energy sector compared to the  agricultural sector as a means
of identifying the critical  success factors needed for a prospering market. We found  that
recent growth in the weather risk transfer market is  mainly related to speculative trading in
the energy sector.  Stakeholders in the agricultural sector around the world  are growing
increasingly interested in weather risk  transfer products. However, the lack of  exchange-based
instruments in this field, the relatively  high basis risk between weather indexes and
agricultural  yield, the fact that agricultural markets are still highly  regulated and inadequate
information and training are all  impeding the growth of this business.},
      url = {http://ageconsearch.umn.edu/record/9248},
      doi = {https://doi.org/10.22004/ag.econ.9248},
}