Weather insurance/derivative pricing model and method of generating same

摘要

A model and method for pricing, procuring, negotiating or transferring weather insurance policies, contracts and derivatives. The model includes bilateral or multilateral pricing and transfer of weather risk and is comprised of weather data transformed utilizing extraction of historical weather data, including weather measures, such as precipitation, wind speed, temperature and sunshine hours, subsequently providing the data to a database, operating on the values in the database utilizing a computer and software, and transforming the result into a pricing schedule. The model utilizes deviations from actual weather measures versus normal, average or predicted measures. The weather data may include high, low, actual, median or average values covering a selected period or point in time for weather conditions including temperature, wind speed and precipitation, or a tradable index and method for weather futures, comprised of weather data transformed, into an index which is tradable in the financial, weather derivative or insurance markets.