Japanese investors are buying up weather derivatives to protect themselves against the risk the World Cup will be wrecked by a typhoon.
As Japan’s rainy season coincides with the beginning of the World Cup, local insurance companies are offering businesses cover against weather damage.
In a typical contract a customer would pay a premium of 1 million yen (€8,600) and receive a payout of 1.5 million yen for every day it rains over 10 millimetres for a specified number of days.
Investors can further diversify through "area" or "gate" derivatives. The area derivative pays out if a typhoon passes through a specified number of areas chosen by the customer. Japan has been divided into 47 separate areas for this purpose.
A gate derivative allows customers to chose the number of typhoons that will pass through an imaginary line joining two places.
Insurance company Tokio Marine is offering these "typhoon derivatives", which the company claims are the world’s first such product.
Japan typically suffers 30 typhoons a year during the rainy season, which runs from July to September, but the storms have been arriving earlier in recent years due to the effects of global warming.
As Japan’s meteorological office is predicting heavy rainfall during the rainy season this year, Irish fans are advised to invest in waterproof clothing - whatever about typhoon derivatives.