ABN AMRO is looking to link retail investment products to the weather, including instruments which payout according to precipitation or temperature. Alex Schippers, global head of weather and insurance derivatives at ABN, told delegates the bank has already structured deposit accounts linked to temperature, in which investors received approximately twice the interest on the capital invested in the product if it was cold during the third quarter.
Schippers said, "Retail investments are often complicated to explain, but weather is easier to understand." The products generate a lot of media attention and can be used to attract new clients, he added. Private clients are also interested in weather-linked structures because it is an alternative asset class and can diversify a portfolio.
