Abstract:
The weather derivatives are innovating financial products of convergence between the capital and insurance market that initiate their ability when the traditional insurance contracts could not confer protection to the subscriber. The weather derivatives were created for weather risks’ management, others than those included in the traditional insurance policy. The purpose of this paper is to present an overview of weather risks, of weather derivatives and of weather derivatives market. Given the fact that the financial innovation could significantly affect the financial results and the value of the company and the risks management could affect the investment and financing decisions, the main purpose of this paper is to analyse the impact of the introduction of these financial innovations for the Romanian agricultural sector. More specifically, we would examine the effect of the introduction of the weather derivatives over the investment and financing decision in agriculture.
