Provides commodity price risk management through a user-friendly insurance policy, whilst eliminating the complications associated with hedging.
Packaging a price management tool as an insurance product offers major benefits, including tax advantages on premiums and claims.
CommodityCap 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.
It can be used to:
- Manage pricing on a range of commodities
- Protect profitability against price volatility
- Lock in long-term bid pricing costs
- Pass on capped prices/future savings to customers
Policies are flexible in design and offer a range of durations, settlement processes, attachment points/strike prices. Cover can be structured with caps to protect against price increases, floors to lock in minimum revenues and with tailored geographic exposures.