Aon provides weather insurance solutions designed to protect businesses from profitability risks tied to volatile weather, which significantly impacts many industries. Their tailored products release payouts automatically upon predefined weather events without the need for claims, enhancing financial stability for clients. Utilizing advanced weather data analytics, Aon offers bespoke coverage options across various sectors, demonstrating successful applications in protecting project profitability against adverse weather-related disruptions.

1. Aon
Innovation & Solutions team
Risk. Reinsurance. Human Resources.
Managing Weather Risks
Aon’s weather solution to protect your profitability

2. 88% of companies’ profitability is directly impacted by the weather*
An increase in volatile weather globally is presenting heightened risk
exposure across all industries. From extreme heat causing delays on
a construction project, to excessive rainfall slashing summer sales for
beer and soft drinks, firms can now take action to help protect their
probability against volatile weather.
Aon’s weather products help clients access index-triggered solutions
against losses from severe weather conditions that are tailored to
your balance sheet.
Managing Weather Risks
How weather insurance works...
Rainfall Freeze Heat Wave height Wind speed Irradiation
hours
1 2 3
Historical weather data is overlaid
on your sales record to understand
how peak revenues could be
impacted by adverse weather.
Aon creates bespoke wordings for
each client to manage the impact
of a specific peril on its revenue.
The client does not have to prove
the loss as the claim is paid, on an
agreed value, when a pre-defined
trigger is reached.
The insurance covers a range of perils with underlying data and weather indexes for
Benefits to your business
• Protect your business from the
impact of volatile weather
• Smooth your P&L by removing the
weather risk with an innovative
insurance solution
• When the product responds, you
can maintain realistic pricing versus
your competitors
• Tailored wording specific to your
business and revenue history
• Pays out automatically when
adverse weather occurs. No need
to file a claim
• Access to GBP1bn of capacity from
traditional and alternative markets
for A+ rated cover
• An influx of capital for parametric-
based weather re/insurance
products means more perils are
covered at a more competitive cost
• The weather cover can be
combined with traditional cover to
bridge a gap
The cover can be used
across all lines of business.
Sectors notably affected
by the weather and
seasonal trends include
retail, construction (on &
offshore), renewables and
reinsurance.
* Weather Risk Management Association 2016

3. Data and analytics at the heart of the solution
Weather data drives the efficacy
of the insurance cover. Aon uses
a combination of traditional
meteorological/weather station data
in addition to more granular gridded
data from satellites. Drilled down to
250 x 250m grids, this means clients
can obtain accurate insights on how
weather will impact their business
while reducing the basis risk by
utilising interpolated data to offer
specific granularity for risk locations.
Clients also benefit from access to
independent weather data from Celsius
Pro—specialists in structuring tailored
index solutions to mitigate the effects
of adverse weather.
The data are coupled with Aon’s
analytical expertise to understand
and validate available weather data,
price the transaction and discussing
preferred structuring with clients.
Case studies: protection in practice
A US pipeline contractor
faced significant risk to its
schedule from potential
rainfall which would
threaten the profitability
of the project. Aon helped
quantify the economic
impact so it could be
underwritten by the
weather insurance market
via a rainfall parametric
cover to protect the firm’s
expenditure.
A South African insurer
wanted to hedge against
cold weather that could
cause damaged water
tanks so Aon placed a frost
day agreement to protect
its profitability if the
temperature falls below
-3 degrees celsius.
Aon delivered a cover for
an Australian construction
company to protect
against extreme heat for
health and safety reasons.
This could cause costly
delays but now the cover
protects its profitability
with prompt and
automatic pay-outs.
A UK brewery aimed to
achieve high revenues
during an international
sports competition but
knew that the weather
could have an impact on
its goal. Aon’s rainfall cover
over the summer hedged
against low footfall and
food and beverage sales
across its public houses.
88%
of companies’
profitability is directly
impacted by the
weather*

4. About Aon
Aon plc (NYSE:AON) is a leading global provider of risk
management, insurance brokerage and reinsurance brokerage,
and human resources solutions and outsourcing services.
Through its more than 72,000 colleagues worldwide, Aon
unites to empower results for clients in over 120 countries via
innovative risk and people solutions. For further information
on our capabilities and to learn how we empower results for
clients, please visit: http://aon.mediaroom.com.
© Aon plc 2017. All rights reserved.
The information contained herein and the statements expressed are of a general na-
ture and are not intended to address the circumstances of any particular individual
or entity. Although we endeavor to provide accurate and timely information and
use sources we consider reliable, there can be no guarantee that such information
is accurate as of the date it is received or that it will continue to be accurate in the
future. No one should act on such information without appropriate professional
advice after a thorough examination of the particular situation.
Published by Aon UK Limited trading as Aon Benfield.
Registered office: The Aon Centre, The Leadenhall Building,
122 Leadenhall Street, London EC3V 4AN
No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any way or by any means, including photocopying or recording,
without the written permission of the copyright holder, application for which
should be addressed to the copyright holder.
Aon UK Limited is a wholly owned subsidiary of Aon plc.
Aon UK Limited is authorised and regulated by the Financial Conduct Authority.
FP#12809
www.aon.com
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Risk. Reinsurance. Human Resources.
Frequently asked
questions
Is this a derivative or an insurance product?
This is an agreed value insurance, whereby the value
of the “insurable interest” is always demonstrated when
we analyse the underlying weather risk.
Isn’t this too costly for my business?
The cover can protect your business’s profitability by
reimbursing for lower revenues from adverse weather
events while creating shareholder value from a profitability
standpoint. In addition, the increased amount of insurer
interest in weather has led to more capital providers and
hence more competitive pricing.
How are other companies handling weather risk?
With the emergence of this new capital and more granular
data, customers are able to better manage adverse weather
from a contingency standpoint with weather insurance.
The parametric insurance can also be combined with
traditional cover.
Can we have weather stations on site if we aren’t
comfortable with the basis risk and what is the cost?
Yes, we can organise third parties to assist with on-site
weather stations and bespoke costings will be provided
according to the location and weather type.
Are multiyear deals available?
Multiyear deals are available for up to 10 years.
With evolving data, we feel this is sufficient for any project.
Can we use our captive to reinsure risk?
Yes – weather is generally short tail in nature and does not
correlate with other lines of business so weather risk is an
attractive proposition for captives to bear. You can also
generate diversification risk from multi territory and perils.
When will we receive third party data updates?
Settlement data is generally delivered on a monthly basis.
When are claims settled?
Claims are generally settled within 14 days after expiry
of the contract.
Contacts
Kurt Cripps
Managing Director
kurt.cripps@aonbenfield.com
+442075223718
Paul Ramiz
Account Executive & Product Leader
paul.ramiz@aonbenfield.com
+442075223868
Luke Proctor
Actuarial Analyst
luke.proctor@aonbenfield.com
+442075223712