CelsiusPro covers weather risk for Nikon camera promotion

London, 4 February: CelsiusPro, an online seller of weather risk management products, has struck a deal that will see camera buyers in Switzerland get a full rebate on their purchase if the weather is bad over the Easter holiday.

The Zurich-based firm has sold a weather derivative contract to Nikon for the camera manufacturer’s spring marketing campaign. Nikon will give consumers their money back if they purchase and register a camera between 15 February and 14 March – and if the Easter weekend in April is washed out.

Nikon will be covered against any financial losses from the rebates through the weather derivative product, which is structured to pay out if a defined amount of rain falls during the weekend, based on readings from weather stations across Switzerland.

The exact deal size is dependent on the success of the marketing campaign and will be known only at the end of the registration period. However, CelsiusPro expects the notional value to be just over SFr 1 million ($950,000).

CelsiusPro said it is also involved with a similar retail promotion for an undisclosed manufacturer of barbecues, where barbecue buyers will receive a 50% rebate for bad weather on Whitsun weekend (22-23 May).

“We have done a number of marketing campaigns with weather derivatives in the past,” said CelsiusPro CEO Mark Rüegg. “All campaigns were for weather-dependent companies such as the Sunshine guarantee for the Swiss ski lift operator in Arosa. The Nikon weather promotion is the first promotion where the product is not weather dependent.

" This opens a new market as the weather-marketing concept can be transferred to promote any goods. The interesting part for the promoting company is that they don’t have a fixed cost for the campaign but spend a percentage of their margin.”

CelsiusPro was established in 2008 and has risk capacity provided by reinsurance giant Swiss Re.