MSI GuaranteedWeather LLC, a global provider of weather risk management products, announced the formation of Vortex Insurance Agency LLC (Vortex) and the launch of a comprehensive weather risk insurance product line in cooperation with Mitsui Sumitomo Insurance USA Inc., a member insurer of the Mitsui Sumitomo Insurance Group. Vortex will offer weather insurance policies designed to mitigate the financial risk that weather poses to entities in a variety of industries throughout the United States.
The weather insurance policies, underwritten by MSU, will be sold domestically and will insure against the risks of variations in temperature, rainfall, snowfall, or other weather variables. These insurance products are not intended to replace traditional property and casualty insurance, but to supplement such insurance and help protect against significant, but non-catastrophic weather variations that may result in reduced revenue, increased costs or other disruptions in business operations.
The offering of weather risk products in an insurance format allows medium or small-sized companies that were previously unwilling to purchase weather derivatives because of their unfamiliarity with taxation or accounting rules for derivatives to simplify (and expand) their risk management strategies.
As a result, risk managers may find weather insurance to be a more readily accepted path to successful mitigation of their financial exposure to weather. MSIGW will continue to market weather derivatives in tandem with the insurance product offerings sold through Vortex.
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