Certus client Excessweather launches this week

New underwriting platform launches to take advantage of a break in the weather

The first UK-flagged weather index coverholder has launched [this week], aiming to take advantage of growing market interest in a form of insurance and reinsurance that pays out automatically when certain weather events occur.  The company, Excessweather, is headed by former QBE Re senior underwriter John Warwick, and chaired by ex-Aviva Investors COO John Hodgson, and has significant underwriting capacity from a panel of leading companies in the weather index space.

Mr Warwick said: “Excessweather is the first dedicated UK platform to offer clients this product. We use data from weather stations across the globe to anticipate and price all weather scenarios, including hot, cold, wet, dry, crop and catastrophe (hurricane and also earthquake).”

“Our aim over the next few months is to develop a network of brokers and assist them in explaining our products to their clients. We want to open up what has until now been a market open to just the biggest broking players to everyone.”

He continued: “Weather is a major driver of corporate profit and loss, but until recently, policyholders have only been offered weather as a standard risk, and faced complex disputes about severity and loss values, which take a long time to resolve. Instead, we provide certainty.  Paying both premium and claim is a pre-agreed term of the insurance contract, and because the insured event is weather incidence, not the loss, there is no adjusting or dispute. Typically we would pay out within 14 days of a valid loss to a policy”

Mr Warwick explained that the proprietary weather model and products was originally developed by Celsius Pro in Zurich. Now excessweather has the opportunity to broaden distribution into brokers, insurers and reinsurers, as well as corporates. “We are already in advanced talks with a leading worldwide grape grower and wine producer, and have interest from blue-chip UK retailers, whose profits are highly dependent on seasonal shopping, plus we are also talking to a number of brokers and reinsurers.”

He said that weather index insurance had particularly strong appeal to finance directors seeking to better manage their balance sheets. “CFOs know exactly what they get for their money. Pricing is fully transparent and the customer can experiment with different weather conditions, rates of payout, and length of contract to create a tailored trade off of cost and risk.

Mr Warwick said: “I’m convinced the certainty Excessweather provides customers will transform the market for weather insurance.” He added: “There are also obvious implications for public policy. The Government has struggled to respond effectively to recent weather events such as the severe flooding in 2007 and 2012, and media attention has invariably focused on householders, rather than businesses where the impact of flooding has much more serious consequences for the British economy. Our model offers a potential solution and we would welcome the chance to participate in the policy arena.”

Notes for editors

Excessweather is registered with the Financial Conduct Authority and operates within Independent Broking Solutions Ltd. 

Celsius Pro is a shareholder in Excessweather.

Excessweather is a new coverholder that addresses the issues of severe weather and climate change and provides balance sheet protection for companies, insurance and reinsurance entities.

Excessweather can provide first class capacity from a panel of premier insurance and reinsurance companies. Our service relies on speed of response and competitive pricing to address all the vagaries that weather can cause.

We have over 75 years of insurance and reinsurance knowledge, experience and expertise.