The first weather-linked contract in Taiwan hit the market late last month, when the Central Insurance Co. pipped the Inter-American Development Bank to the finishing post with a precipitation-linked contract. Chi-Ming Peng, ceo of WeatherRisk Explore in Taipei, which acted as a consultant on the deal, explained that the contract protects theme park and golf course operators against loss of revenue due to heavy rain. The Inter-American Development Bank has also been readying a weather-linked bond in the country, however, this was recently delayed (DW, 5/30).
Issuance of weather-linked deals in the China region has been restricted to insurance contracts because weather derivatives are deemed to be equivalent to gambling, Peng explained. The premium of the contracts is also high.
