Metar Weather Introduces Innovative Weather Risk Insurance
Florham Park, N.J. (Nov. 16, 2012) --After a successful winter 2011 launch, Florham Park N.J.-based Metar Weather is expanding the rollout of its innovative weather risk protection insurance products to snow removal professionals, buyers of snow removal services and ski resort operators in the mid-Atlantic and midwestern regions to help them cope with winter weather volatility.
Metar’s unique products offer sellers of snow removal services a means of mitigating risks associated with above-average or below-average snowfall by maximizing revenues in the case of abnormally low snowfalls or minimizing expenses in the case of abnormally high snowfalls.
For buyers of snow removal services, such as retail businesses, shopping centers, parking lots, corporate office buildings and colleges and universities, Metar Weather’s products offer budgetary certainty, including insulation from years of heavy snowfall and a financial benefit during years of low snowfall.
“Everyone talks about average snowfall, but there’s no such thing,” said Metar CEO Richard Nemet. “Weather-dependent businesses go into the season with a pain in the pit of their stomachs. With our products, which are new to the market, such businesses have revenue and expense predictability that provides peace of mind.”
Metar has created protection products for the snow industry that accurately reflect customers’ weather risk exposure as a result of access to hyperlocal weather data through a proprietary relationship with WeatherWorks, a national leader in providing customized and innovative meteorological services and products.
“Until now, weather risk protection in the snow removal industry has been non-existent or ineffective because of lack of accurate snowfall data,” Nemet said. “In addition to allowing us to develop customized products, our access to independent weather data also minimizes the need for a claims process, proof of loss or a payment waiting period.”
The snow and ice removal industry, with annual sales of more than $2 billion, is a challenging industry because weather unpredictability can make it difficult to forecast for the future. As the Northeast’s unusually mild 2011-2012 winter demonstrated, it’s not easy to predict whether the season will bring too little snow or too much.
In cases where snow and ice removal companies have seasonal contracts, they can lose money in seasons with heavy snowfall; conversely, if they are working on per occurrence-type contracts, they can lose money if there isn’t enough. Buyers of snow removal services face similar risks because of volatile snowfall.
Compounding the problem for the snow and ice removal industry -- as well as for the ski industry, which faces similar weather-related risks -- is that climate change may be causing an increase in the frequency and severity of storms.
An example is Advanced Service Solutions, a leading national facility maintenance services company based in Hammonton, N.J., with a snow removal division. After two seasons of heavy snowfall, they purchased a product that capped their expenses on their work for a retail client that was being billed on a seasonal basis. Through Metar, Advanced was able to take advantage of a product that mitigated their weather-related risk.
As it turned out, the winter of 2011-2012 was unusually mild, but Advanced Service Solutions had no regrets about purchasing weather risk protection.
“The only thing that’s certain about snowfall is that it’s uncertain,” said Brian Morse, vice president at Advanced. “We were happy to implement an advanced budget protection strategy through Metar. It’s like having car insurance: you sleep well knowing that you have it, even if you don’t need it.”
The solution implemented for Advanced was SnowPlex, Metar’s innovative suite of products for the snow removal industry, which includes ExpenseGuard, which protects expenses on seasonal-type contracts against abnormally high snowfall, and RevenueGuard, which protects revenues/profits on per occurrence-type contracts against abnormally low snowfall.
About Metar Weather
Founded in 2011, Metar Weather helps clients reduce risks to earnings, expenses or revenues resulting from a broad array of measurable meteorological phenomena, including temperature, precipitation, humidity and wind. Metar creates highly customizable weather protection products for a variety of weather-dependent industries, including the snow removal industry, ski resorts and golf courses. Their proprietary structures and strong industry partnerships have helped distinguish them as one of the nation’s premier retail weather risk specialty firms.