Carvill and TFS Energy joint venture to target weather risk

London, 30 August: US reinsurance intermediary Carvill and derivatives broker Tradition Financial Services Energy (TFS Energy) have launched a joint venture, that will offer insurance derivatives to help companies hedge their weather and catastrophe risk.

The joint venture will be based out of TFS Energy's office in Stamford, Connecticut and will be split 50:50 between the two firms.

In a press statement, the firms said it will "provide derivative brokerage and advisory services to all their respective clients and markets". However, at press time, little information was available on the structure of the venture, the type of products and services the joint venture will offer, or how they will differ from those already offered by the two partners.

But John Cavanagh, joint-chief executive of Carvill, said: "Today, many companies, particularly those in the insurance and energy sectors, are showing increased interest in hurricane and weather derivatives, which are routinely used to hedge against weather volatility around the world."

Kendall Johnson, managing director and head of weather derivates for TFS Energy, added: "Through TFS Energy's and Carvill's global scale and enterprise, our clients will have unparalleled market access to economically and efficiently manage their risk."

Among the products already offered by the companies in this space is the Carvill Hurricane Index, which provides the insurance industry with a measurement of the potential damage of hurricanes.

TFS Energy was voted best broker of weather derivatives in North America, Europe and Asia in the latest Environmental Finance market survey (see the December '06/January '07 issue of Environmental Finance).