Index-based risk transfer essential to key societal issues: Speedwell Climate

Index-based risk transfer has a key societal role to play, in providing protection to support issues such as the renewable energy transition, covering extreme weather catastrophe events, and helping support access to scarce resources, newly renamed Speedwell Climate has said.

Speedwell Weather Ltd. and its associated companies have been serving the need of parametric, or index-based, weather risk transfer users since 1999.

But with that market having broadened, while risk transfer has innovated to create a much wider range of structures relating to renewables, climate, and environmental risks, Speedwell Weather is now being formally rebranded as Speedwell Climate.

The company notes that there will be no change to its service offering and products, but it will now have an emphasis on solutions for climate and environmental risks.

These will include solutions to support the energy transitions, such as renewable energy production indices for managing wind and solar power risk.

Speedwell Climate will also provide data to support transactions that can utilise environmental variables such as wildfire, river flow, and atmospheric gases.

Finally, Speedwell Climate will continue to be a leading provider of traditional weather variable data, such as temperature, rainfall, and snowfall, that can be used in risk transfer, insurance and reinsurance transactions.

David Whitehead, co-CEO of Speedwell Climate, commented, “Over the past two decades we have been a key participant in providing the underlying data sets necessary to grow this market. Our SuperPack global data subscription expanded the availability of weather risk transfer contracts globally by providing the necessary underlying data. Speedwell Weather System (SWS) software streamlined valuation and portfolio management. Speedwell Settlement Services refined the settlement of OTC and exchange-based transactions, and weatherXchange transformed the way in which market participants engage in structuring and price discovery. Speedwell Climate is the next stage in the continued growth of this market.

“Speedwell Climate is our vision for the future. It is our conviction that index-based risk transfer is essential to the management of important matters affecting society: the worldwide transition to renewable energy, extreme weather linked to climate change, and access to scarce resources. Through our indices, software, and trading tools we believe Speedwell Climate will continue to be of benefit to this market and the world.”

Speedwell’s data and services have been critical to weather derivatives markets over more than two decades, while increasingly being used in broader parametric insurance and reinsurance circles as well.

Their data and settlement services help transaction counterparties put together deals and identify their triggering, settling against the data sources Speedwell offers to clients.

As a result, some insurance-linked securities (ILS) funds and investors have also been counterparties to transactions structured to use Speedwell services and data.