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Weather Risk Transfer (Wrt)

Weather Risk Transfer (WRT)

Definition

Weather Risk Transfer (WRT) — these contracts provide holders with compensation for economic losses arising from extreme weather events. WRT contracts protect cedents against the impacts of both routine weather variability and weather extremes. First adopted by users in weather-sensitive industries like energy utilities and agriculture, the instruments are now being expanded to address the needs of other industries whose financial performance is affected by changes in the weather.

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