Natural Disasters: Measuring the Risk

Given the horrible earthquake in China, the cyclone in Myanmar and the number of tornadoes reported across the U.S., we thought it would be interesting to look at weather risk management on The Opening Bell this morning.

It's a topic that rarely comes up -- but if you've read the headlines of late, regardless of whether you believe in global warming or not, a lot of natural disasters have been reported. Given the consequences of these seemingly catastrophic events, what can a company do to hedge it's risk and prepare for the unlikely event that no one wants, expects or prepares for.

Jeff Hamlin, director of business development for Weatherbill.com and Mike Smith, CEO of Weatherdata Services, a risk management firm, joined me this morning to talk about the companies effected by natural disasters, why some prepare better than others, the costs of risk management specialists and products like weather derivatives.

Click here for the video

If you have been following the story of the 7.8 magnitude earthquake in the Sichuan province and nearby capital of Chengdu, you have heard about the lives lost and businesses effected. Earlier on Money for Breakfast I talked to Joseph Meuse, an expert on Chinese stocks and Belmont Partners President and David Appelgate, the Senior Advisor for Earthquakes and Geological Hazards at the U.S. Geological Survey (USGS). We talked about the risk to further aftershocks. If more earthquakes can be expected in China and across the globe. What companies have been hit the hardest and what this will do for investment in China and a city like Chengdu which is BIGGER than Chicago or New York City. Can you believe that? I had no idea. Take a look.