Panel Discussion on Climate Linked Economics: Economic Weather Risk Transfer: What Is It, and How Does It Enhance Institutional Resilience?

For thousands of years, people, communities, and institutions have worried about unpredictable events and the economic losses that they could cause. As a result, the notion of sharing and spreading unpredictable losses was born. Risk transfer is defined by the Reinsurance Association of America as the act of using a contractual agreement to shift an economic risk from one person or institution to another.=

Today, we see many examples of risk transfer. People pay insurance premiums to protect against potential future large loss events affecting their health or property. Banks purchase financial products to protect against fluctuations in foreign currency and interest rates when conducting global business. And increasingly, energy utilities, farmers, insurance companies, municipalities, and other weather-exposed institutions purchase financial protection against bad weather.

In this session, we will interact with industry practitioners who research, create, buy, and sell economic protection against weather risk. We will discuss questions and perspectives such as:

• Which sectors of the global economy are most exposed to weather risk and climate change?
• Why do institutions purchase financial protection against bad weather?
• Why do other institutions have an ‘appetite’ to sell financial protection against bad weather?
• How are data and analysis techniques used to identify and value weather risk and create financial protection?
• What are some real-world case studies and examples of financial weather protection working well or poorly?