GRITIT

April 05, 2011 08:47 ET

GRITIT: 'Cost of Winter Must Be Brought Under Control'

UK's leading winter risk management company highlights weather derivatives as the solution

- Figures(1) have highlighted that Britain's economy unexpectedly shrank the most in more than a year in the fourth quarter of 2010...and the coldest December hampered both services and retailing.

- The Federation of Small Businesses (FSB) has stated that last year's 'big freeze' cost the economy between GBP 600 million to GBP 1 billion per day.

- Over the past few years, many councils have reportedly 'overspent' on their winter budgets, in tackling adverse weather, as the country's roads and services grind to a halt.

LONDON, UNITED KINGDOM--(Marketwire - April 5, 2011) - We can all recall the images of winter 2010; vast amounts of snow and ice, roads closed and gritters working long into the night, battling the adverse conditions.

Research has revealed that almost half of road users continue to make their journey2, despite the weather forecast. The pressure to keep roads and businesses open during periods of adverse weather will not disappear, but equally neither will the costs of failing to do so. Alastair Kight, managing director of GRITIT, the UK's leading winter risk management company, comments:

"The UK cannot afford to make the same mistakes of the last two winters - we have to stay 'open for business'. Roads, public services and businesses must remain open, operational and safe during periods of heavy snowfall and ice. When everything grinds to a halt, the costs far outweigh those of providing comprehensive gritting and snow clearance services."

Kight believes the adverse weather conditions of recent years have seen the need for a solution to help manage the costs and risks associated with winter. He adds: "Council overspend has – historically – been compensated for by a 'contingency budget', but how much of this contingent remains? And, how better could it be spent?

"The coalition's austerity measures have led to drastic spending cuts at local government level, but what impact will this have on services? Winter service activity is dictated by the severity of the weather, not by the availability of funds, so we need to find new ways of ensuring that these critical safety services are delivered despite reduced budgets."

Kight and his team believe the cost-controlling solution lies in weather derivatives – financial instruments, which can be used by organisations as part of a risk management strategy. The company recently launched first-to-market 'frost day' certificates, weather derivatives arranged by Zurich-based Company Celsius Pro (a weather risk specialist). Customers receive an automatic payout if predefined weather parameters, in this case a certain number of frost days, are exceeded.

Kight adds: "Weather risk management is the next logical step for any organisation making contingency plans. In addition to the need to remain safe and operational during extreme weather conditions; clients' focus has – understandably – shifted towards sustainability and protecting budgets. In direct response, we have sought new ways to help them achieve this, and weather derivatives provide clients with a complementary offering to our existing gritting services."

He believes weather derivatives are a 'life saver' for both the public and private sectors, where budget pressures are intense, but cuts in safety services are not an option. GRITIT's 'Frost Day' certificates enable users to cover their winter costs, and spend whatever sums they need to fund winter risk management services, without running the risk of going 'over budget'.

"I firmly believe that weather derivatives will become an increasing phenomena in the UK; protecting businesses and organisations impacted by weather events and trends. The fact that the weather is becoming, and is forecast to continue to become, less predictable and more extreme only adds to the attraction that weather certificates hold." 

GRITIT, an award-winning company, was the first in the UK to focus exclusively on winter gritting and maintenance services and has developed a reputation as an innovator and market leader in this specialist field. The company saves businesses money by ensuring they remain operational during adverse weather conditions and by preventing accidents and reducing the unnecessary costs of injury. 

About GRITIT:

GRITIT (www.gritit.com) is the UK's leading winter risk management company, providing protection for clients against the financial and physical risks of adverse weather. 

Founded in 2004, the award-winning company was the first in the UK to focus exclusively on winter gritting and maintenance services and has developed a reputation as an innovator and market leader in this specialist field.

GRITIT currently provides specialist gritting and snow-clearance to private and public companies in the retail, commercial, industrial, logistics and health sectors. This winter GRITIT will provide more than 110,000 service visits across the UK.

Over recent years, it has become abundantly clear that adverse cold weather can be detrimental to business. GRITIT is able to minimise this exposure by keeping premises open, operational and by preventing unnecessary closures. 

GRITIT saves businesses money by ensuring they remain operational during adverse weather conditions and by preventing accidents and reducing the unnecessary costs of injury. 

1 http://www.businessweek.com/news/2011-01-25/u-k-economy-unexpectedly-shrinks-in-winter-freeze.html (Bloomberg 25 January 2011)

2 http://news.bbc.co.uk/local/norfolk/hi/people_and_places/nature/newsid_8388000/8388996.stm

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