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Session 19: Weather Contracts
Businesses face unique risks due to weather. Weather conditions tend to affect volume and usage more than they affect price. An exceptionally warm winter, for example, can leave utility and energy companies with excess supplies of natural gas or oil. An exceptionally cold summer can leave hotel rooms and airline seats empty. Weather risk is also unique in that it is highly localized, cannot be controlled, and despite great advances in meteorological science, still cannot be predicted precisely or consistently. A panel of experts from the Chicago Mercantile Exchange, Munich Capital Markets and Weather Risk Management Association will discuss weather and its role as a leading economic indicator.
Presentations
Links of Interest
Weather Risk Management Association
Speakers
Felix Carabello
Associate Director, Alternative Investment Products
Chicago Mercantile Exchange
Paul Murray
Weather and Commodity Risk Portfolio Manager
Munich Capital Markets
Paul is the Weather and Commodity Risk Portfolio Manager for Munich American Capital Markets. The portfolio consists of options and structured derivative transactions based on a variety of weather and weather-related indices globally. Weather–related commodities in the portfolio include Natural Gas and Heating Oil.
Prior to his role at MACM, Paul was in charge of weather derivative trading in Europe for Enron Europe and subsequently traded weather derivatives and natural gas options for Goldman Sachs, London. From 1996 to 2001, Paul was a founding member of Castlebridge Partners, LLC. a Chicago-based derivative consulting and trading firm.
Paul has a background in both exchange-traded and OTC derivatives as well as alternative risk transfer corporate products for AIG and Marsh. He has been a frequent invited guest speaker on the subject of capital markets and derivatives and has co-authored articles on alternative pricing methodologies in commodity markets.
He holds an MBA in Finance from the University of Notre Dame and a BA in Economics from St. Vincent College as well as Post Graduate Work at the University of Chicago dedicated to forward and options contracts.
Brian O’Hearne
President
Weather Risk Management Association
Michael A. Steinberg
Senior Vice President
AccuWeather
Michael A. Steinberg is a Senior Vice President of AccuWeather, where he interacts in a wide variety of scientific, tactical and strategic areas.
On a scientific level, Mr. Steinberg is program manager for AccuWeather’s radar and satellite products and has written the specifications and managed the development of many other AccuWeather systems, including the first operational digital forecast database, the AccuWeather Forecast Engine™. Mr. Steinberg is also co-developer of a patented multifactor temperature index and patent-pending probability of precipitation and severe weather indices.
In business development, Mr. Steinberg oversees AccuWeather’s bids and proposals, and develops new business and product initiatives domestically and internationally. He also serves as the project manager for a number of AccuWeather clients, including several states’ Department of Transportation and is the program manager for AccuWeather’s television forecast service.
Mr. Steinberg has also served as Director of AccuWeather’s R&D activities, acting Marketing Director, Director of M&A and acting CFO. He is AccuWeather’s Facilities Security Officer and has Secret Clearance.
While in high school, Mr. Steinberg forecasted for a local radio station and newspaper. He received a B.S. in Atmospheric Science from Cornell University in 1974 and an M.S. in Meteorology from The Pennsylvania State University in 1976. Mr. Steinberg worked as an operational forecaster for FleetWeather from 1976-78, then joined AccuWeather in 1978, initially working as a forecast meteorologist. As a forecaster, he specialized in predictions of snow and ice for highway departments, schools and other weather-sensitive clients, served as Director of AccuWeather’s Snow Warning Service from 1981-1991 and as Executive Director since 1991.
Mr. Steinberg has been a member of the AMS since 1970 and is also a member of the NWA and CMOS. He has served on the AMS Economic Development Committee since 2001. Mr. Steinberg has presented or co-authored more than fifty papers at AMS and NWA and has been a featured speaker for more than 20 organizations, ranging from the National Association of Broadcasters to the Canadian Association of Petroleum Producers. He has also led training programs for government agencies ranging from The U.S. Nuclear Regulatory Commission to the New Jersey State Department of Transportation.
