Document Type



Uses of climate information have grown considerably in the past 15 years as a wide variety of weathersensitive businesses sought to deal effectively with their financial losses and manage risks associated with various weather and climate conditions. Availability of both long-term quality climate data and new technologies has facilitated development of climate-related products by private-sector atmospheric scientists and decision makers. Weather derivatives, now widely used in the energy sector, allow companies to select a financially critical seasonal weather threshold, and, for a price paid to a provider, to obtain financial reparation if this threshold is exceeded. Another new product primarily used by the insurance industry is weather-risk models, which define the potential risks of severe-weather losses across a region where few historical insured loss data exist. Firms develop weather-risk models based on historical storm information combined with a target region’s societal, economic, and physical conditions. Examples of the derivatives and weather-risk models and their uses are presented. Atmospheric scientists who want to participate in the development and use of these new risk-management products will need to broaden their educational experience and develop knowledge and skills in fields such as finance, geography, economics, statistics, and information technology.



Publication Date



D0 Collaboration

Original Citation

Changnon, D., and S.A. Changnon, 2010: Major growth in some business related uses of climate information. Journal of Applied Meteorology and Climatology, 49, 325-331.


Department of Geographic and Atmospheric Sciences

Legacy Department

Department of Geography






American Meteorological Society



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