... of the variation in corn yields, a hedge can offset the revenue loss caused by the corresponding weather risk; but when it explains much less of the yield variation, it is inefficient for hedgers to buy weather insurance. If CR explains variation in crop yields, it is increasingly efficient to employ CR-indexed...

... and discussion, and in Section 6, the conclusion. The other weather insurance product offered by SCIC is the CHU program. The payoff depends upon the CHUs calculated at one of the 12 weather stations spread across the corn growing areas of the province. Annual CHUs are calculated by adding the daily...

... costly if the risks are common, but the risk premiums on rare or low‐frequency weather risks can be very manageable. © Emerald Group Publishing Limited 2008 Prescription insurance Rainfall insurance Weather derivatives Weather insurance Weather‐linked bonds Weather‐linked mortgages ...