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Parametric Insurance PROTECTING BUSINESSES AXA Corporate Solutions’ AGAINST WEATHER RISKS International Network + 4°C in 2060(1) 5 times more extreme events because of climate change(1) 27% to 39% of European countries’ GDP is weather sensitive 3 of 4 companies are frequently impacted by weather Companies are often covered against natural disasters but seldom against the economic consequences of weather anomalies Weather anomalies will become more frequent and more intense as a result of climate change An increasing number of unusual weather events (cold snaps, heat waves, heavy snowfall…) has been reported in the past couple of years. Their economic impact can be as dramatic as that caused by natural disasters. A majority of sectors are affected The Food & Drink, Agriculture, Retail, Energy, Tourism, Leisure, Transportation and Construction industries are particularly vulnerable. Weather events have the potential to both reduce revenue and increase costs. A very simple approach 1 2 3 Analysis of the company’s weather sensitivity What consequences do different weather anomalies (heat, rainfall, cold, drought) have on revenues or cost structure? Construction of an insurance cover adapted to the needs of the company Which geographical zone? During which period? What amount of indemnity? Payment Rapid payment triggered based on certified weather data within a few days (2) (1) IPCC scenario (2) in certain cases, a proof of loss may be required PA R A M E T R I C INSURANCE WEATHER RISK SOLUTIONS E X A M P L E S O F P O S S I B L E I M PA C T O N S P E C I F I C S E C T O R S Agriculture Low yields or lower quality crop production due to drought or excess rainfall Decrease in renewable energy production due to adverse weather Lower energy demand when temperatures are mild during the winter Food & Drink Tourism & Leisure Lower sales of fresh drinks during a cold, rainy summer Less visitors and lower food and beverage consumption in theme parks Construction Work interruption when temperatures are too cold Retail Decrease in seasonal clothing sales (winter coats, bathing suits) due to adverse weather F O R E N Q U I R I E S P L E A S E C O N TA C T E [email protected] AXA Corporate Solutions 2-4 rue Jules Lefèbvre, 75009 Paris, France www.axa-corporatesolutions.com @AXA_CS Energy Transportation Increased costs for airline companies in case of cold temperatures and snow, e.g.: aircraft de-icing