Legal Notice SWD FAQ Q1. A. Weather forecasting begins to get less accurate from about a week outward. There is no way a company can find out in February what the weather will be like in the summer. A knowledge of future weather will mostly be used to control costs but does not necessarily protect revenues.
Weather derivatives allow companies to eliminate the uncertainty and protect their revenues.
The index upon which these contracts are settled is provided by the Meteorological Office . It is not possible for anyone to manipulate or control the index. No one person can own all the sunshine in one area, nature will do as it pleases. The Met Office is independent and has been providing reliable met data for decades. They have accurate records stretching back over at least fifty years.