COMMODITY PRICE RISK INSURANCE
Provides commodity price risk management through a user-friendly insurance policy, whilst eliminating the complications associated with hedging.
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Packaging a price management tool as an insurance product offers major benefits, including tax advantages on premiums and claims.
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The product is a 'turn-key' solution that enables the elimination of financial statement risks and creates operating efficiencies, with no credit or collateral management, and no investment policy limitation issues.
Policies are flexible in design and offer a range of durations, settlement processes, attachment points/strike prices. Cover can be structured to protect against price increases, include floors to lock in minimum revenues and tailored geographic exposures.
Commodity Price Risk Insurance can be used to:
Manage pricing on a range of commodities
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Protect profitability against price volatility
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Lock in long-term bid pricing costs
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Pass on capped prices/future savings to customers
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