Several Aspects Regarding Weather and Weather Derivatives

Hurduzeu, Gheorghe
Constantinescu, Laura Gabriela
Publication date: 
JEL codes: 
G10 - General, G14 - Information and Market Efficiency; Event Studies, G15 - International Financial Markets, G22 - Insurance; Insurance Companies.
In recent years, one of the factors that had a significant impact on the economic development was represented by climatic change. At international level, the weather risk management stands for a priority for Governments, insurance companies and companies within the industries affected by the weather variability. Within this article, we try to address a more suitable approach than the insurance policies on the matter of weather risk management by presenting an innovative alternative risk management solution represented by weather derivatives. Furthermore, we focus upon an important economic sector - the agriculture by emphasizing the specific aspects with regard to the employment of weather derivatives.