Skymet bets big on weather insurance for air travellers

At Rs 250/year, travellers can get Rs 4,000 refund for delays of over 10 mins.

More biz from commodities, power, weather derivatives.

Insurance may be on offer in Yatra, TravelGuru travel portals.

Skymet is betting big on weather forecast, and is expecting traders and travellers to celebrate both sunny and gloomy weather days.

Here’s some cheer for stranded travellers: the country’s first private sector weather forecasting cell is in talks with major credit card companies, including ABN-Amro, American Express and SBI to offer weather insurance policy for air travellers.

For a premium of Rs 250 per annum, a traveller could get a refund of Rs 4,000 for delays of more than 10 minutes due to weather parameters. A Rs 1,000 premium will cover travellers completely. According to Mr Jatin Singh, Managing Director, Skymet, issues of travel delays due to fog and rain are exaggerated by the media.

The insurance could soon be available on travel portals such as Yatra and TravelGuru as a retail insurance product. Skymet is also working with Weather Risk Management Services to create a weather insurance policy for New Delhi Power Ltd (NDPL).

Derivatives

With revenues Rs 1.26 crore annually, and growing at 80 per cent year on year since it started operationsin 2003, Skymet is also optimistic about weather derivatives.

“The Forward Markets Commission is considering allowing trading of weather derivatives, and when that happens we believe it will open up huge opportunities for us,” said Mr Singh. Weather derivatives, or the concept of weather as a tradeable commodity, covers for change in demand, say for example for energy companies which would be affected by reduced consumption from a warmer-than-usual winter.

Noida facility

With a team that includes 10 weather forecasters, The company’s Noida facility has been equipped with Weather Research Forecast (WRF) Model, capable of generating forecasts for resolutions as low as 3 km, providing forecasts for three days and general weather outlook for the next seven days.

Inaugurating the new outfit, Dr Jagadish Shukla, Distinguished Professor, Climate Dynamics, George Mason University, US and President, Institute of Global Environment and Society, said there were more than 450 companies in the US affiliated with the national weather service.

Skymet, however, does not have the support of the Indian Meteorological Department and Dr Shukla suggests, in the company release, that the Government create infrastructure and allow the private sector to customise and distribute forecast.

Already providing weather forecasts to Reliance Energy for its power distribution, Skymet expects more business to come from commodities, power, and weather derivatives.

Client base

The parent company, BK Consimpex Pvt Ltd, a technology provider of instrumentation, radars and their maintenance, has clients like the Indian Meteorological Department, the Indian Air Force, and Indian Space Research Organization amongst others.

The company now hopes to be a global player in weather software development and integration of world class instrumentation. The company is also looking to expand its business of flight briefing system offered to major international airports and all Air Force stations in India.

Source: The Hindu Business Line