Many activities such as energy, tourism, transport, construction, retailing, agriculture can be affected
by extreme weather conditions or also just by slight differences from normal values.
The damages that occur in the case of severe weather events can be covered by the indemnities of the insurance contracts. The Insurance or Reinsurance companies thus need analytical models to define accurate prices in coherence with the risks.
In the case of light weather fluctuations without catastrophic consequences, a company can develop its own strategy for the weather risk management in order to better anticipate the impacts on the production or on the customers demand. Some financial products such as options are also available on the market to cover these risks.
With the predictive analytics techniques, historical data on the meteorological observations can be combined with
the occurrences of the catastrophic events in order to define the adequate price of the insurance contracts.
At a business level, the meteorological data can also be correlated with classical indicators of the activity to better understand the impacts of the weather conditions and to predict the consequences for the short term.