commodity cap

Commodity Price Risk Insurance

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.

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.

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.