European weather derivatives

Document description

This paper concentrates on where the future of the weather derivatives market may lie, where the new applications may be situated and what will be the main drivers of the market size. We realise that some of the applications are not currently available or commercially viable at present but take the view that, if demand is sufficient, they will become available given time. In fact, one of the likely drivers of demand is the rate of change in the European climate. To this extent we have included a chunky appendix summarising the latest findings and views on climate change as we believe that this will have a huge influence on where the weather derivative market in Europe will be in 5-10 years time.