Program Guidelines

The Garden Center’s main season is in the spring from April 15^th – June 15^th.  With sunny weather during the period, the garden center will have good revenue results.  However, excessive rain during the period can significantly reduce the income.    Rain on Fridays, Saturdays and Sundays have the most impact on revenues and covering only those key days can also be addressed.

This chart shows the variation in revenue (in Thousands) for the garden center given the cumulative rainfall during the period.

The chart above is calculated as follows:

-          Revenue in a normal spring:  $950,000 – $850,000

-          Revenue in a rainy spring:  $800,000 – $650,000

-          Precipitation in a normal spring:  6 – 10 inches

-          Precipitation in a rainy spring: > 10 inches

-          Period  April 15 – June 15  

The owners of the garden center were concerned about the fact that excessive rain reduces their revenues and overall annual performance.  Given the climate variability in recent years, this is a not a risk they want to retain.  The garden center decided to purchase a rain insurance cover from MIG.   The coverage pays a pre-defined amount for every inch of rainfall recorded above a chosen threshold.

Weather Insurance Contract Terms:

-          Type:  Rainy Season

-          Period:  April 15 – June 15

-          Weather Station:  Mpls/St. Paul International Airport

-          Threshold:  > 10 inches of rainfall

-          Payout per inch above threshold:  $25,000

-          Maximum Annual payout:  $200,000

-          Premium Cost:  $20,000

This chart shows the variation in revenue (in Thousands) for the garden center given the cumulative rainfall during the period.  Profits are reduced by the premium and increased by the payouts (red).

MIG was able to help the garden center greatly reduce their downside rain exposure and its affect on their revenue as follows:

Unprotected Best Case/Worst Case:  $950k/$650k

Protected Best Case/Worst Case:  $930k/$830k

Contact MIG to discuss your unique business and a structure that is customized for you.

Event Experts LLC organizes a summer festival with top acts performing over a 3 day period.  With sunny weather during the festival, attendance and revenues are strong leading to a healthy profit.  However, excessive rain during the festival can significantly reduce income and even lead to a loss due to:

-          Reduced ticket sales

-          Reduced  food, beverage and merchandise sales

-          Fixed costs associated with the show such as set-ups and appearance fees

-          High costs associated with rain and repairing festival site during the event.

Event Experts LLC calculate their exposure as follows:

-           Sunny Day Profit:  $100,000 a day

-          Rainy Day Profit:  $20,000 a day

-          Based on fixed-costs and minimum acceptable earns, Event Experts needs to make $200,000

This chart shows the variation in revenue for the Event Experts LLC given the number of rainy days during the period.

Event Experts LLC are concerned about the fact that excessive rain cuts a hole in their earnings.  Given recent historical rainfall and increased recent weather volatility, this is not a risk they want to run.   Event Experts LLC decide to purchase the following protection from MIG.

Weather Insurance Contract Terms:

-          Type:  Rainy Day

-          Period:  August 1^st, 2^nd, 3rd

-          Weather Station:  Mpls/St. Paul International Airport

-          Threshold:  > .25 of rainfall per day

-          Deductible:  1 rainy Day

-          Payout per rainy day:  $80,000

-          Maximum Annual payout:  $160,000

-          Premium Cost:  $20,000

This chart shows the variation in revenue for the Event Experts, LLC given the number of rainy days during the period.  Profits are reduced by the premium and increased by the payouts (red).

 Unprotected Best Case/Worst Case:  $300,000 / $60,000

Protected Best Case/Worst Case:  $280,000/$200,000

Let MIG structure a solution for your unique festival, concert, business or event, contact us today on the form below or at info@milltownrisk.com or call Dana at 612.306.1540

Cory Downer

Memorial Day weekend was a success for golf courses in southern Illinois. However, the game was nearly non-existent this spring as courses absorbed record rainfall across the region.

Courses have been forced to shut down for periods at a time due to rain, and they have had to battle maintenance issues to stay open and give golfers a chance to play the game.

Don Pippins, owner of Stone Creek Golf Course, said the rain has had both positive and negative effects on the golf course.  He said the rain has forced them to shut down the course on many occasions this spring, which has caused economic stress on the course.

Rest of Article:  http://dailyegyptian.com/2011/06/01/excessive-rain-harms-golfing-revenue-helps-golf%E2%80%99s-green/

MIG SOLUTIONS FOR GOLF COURSES

The city of Peabody, MA dipped into reserve funds to cover costs of removing snow. Snow removal cost the city about $1.1 million last winter, or about $441,000 more than what was budgeted – resulting in a $202,000 budget shortfall for area schools.   http://www.salemnews.com/local/x1443106898/Schools-are-short-202K-in-Peabody

MIG’s snow insurance strategies are well positioned to assist municipalities and other businesses affected by snow fall removal 2011/2012 budgets easier to manage than last year.    The following exhibit includes sample pricing for the 2011/2012 season, and shows examples of how the coverage would have enhanced last seasons budgets and largely eliminated shortfalls in critical areas such as schools.

The following is an example that illustrates one potential structure that was worked up for a corn maze that operates with 20 key dates.   There are 2 options.  A no-deductible option payouts out starting at the first rainy day.   The 1 day deductible will pay out starting on the 2nd rainy day,with the business retaining the first rainy day.   MIG can structure a unique solution for your business.

Per Day Sum Insured: $10,000  

Aggregate Sum Insured: $200,000

Insured Date: September 30, October 1, 2, 6, 7, 8, 9, 13, 14, 15, 16, 20, 21, 22, 23, 27, 28, 29, 30 & 31, 2011 (20 dates)    

Insured Hours: 3:00 PM – 8:00 PM (5 Hours Each Date)

Zero(0) Deductible Days:  The following options apply to insuring all insured dates as detailed.  The policy would payout the bound per day sum insured for each  the insured threshold starting on the first occurrence.                                                                      

 Threshold       Rate       Premium

0.10 Inch        17.50%    $35,000

0.15 Inch         13.50%    $27,000

.20  Inch            8.50%    $17,000

.25  Inch            6.50%     $13,000

Sum Insured                     $200,000

One (1) Deductible Day:  The following options apply to insuring all insured dates as detailed, with a One (1) day deductible.  The policy would payout the bound per day sum insured for each occurrence of the insured threshold starting on the second occurrence. 

 Threshold            Rate           Premium

0.10  Inch             10.00%         $20,000

0.15  Inch                6.25%         $12,500

 0.20  Inch               2.00%        $4,000

0.25 Inch                  1.00%        $2,000

Sum Insured                             $190,000

*  Pricing is for illustration and will be customized to your location and key dates, the amounts you want to cover and rated off histrical weather patterns in your area.   Please contact us today for more information.

Agritainment Solutions

Weather Promotions  – Purchase your engagement ring at our store and if it rains on your wedding day your purchase is refunded.  What if  snows 2 inches on New Year’s Day, or it reaches 100 degrees on July 4th, or it rains ½ inch on Memorial Day all your customers get their jewelry purchases over the specified promotions period for free!   What if large cash prize, car or vacation is offered to one lucky customer?  We can help you structure a promotion that works for you.  These are just a few examples of the types of weather promotions that we can customize for you.  We can insure against rain, snow, and minimum or maximum temperature on any date that you choose. 

Sports Promotions – What if the Twins win the Championship, or the Vikings return the opening kickoff this season touchdown, what if there are back-to-back homeruns in a certain game? … these are just a few examples of sports promotions that have worked in the past.    Have a unique idea of your own?  Contact us and we’ll work with you to turn it into an insurable promotion.

Games of Skill or Chance – Our carrier offers a promotion called – The Perfect Diamond Game -  this game consists of entry cards that would be available to your customers after they make a purchase.  The customer would have the opportunity to fill out an entry card where they get to choose the cut, color, clarity, and carat weight of a diamond and if it matches the pre-selected combination, they win!  Prize could be cash, a trip, a diamond, etc.  We have many other concepts and ideas that we can provide more information and quotes on as well.

Please contact MIG below if you would like more information on how the MIG Total Jeweler and Marketing Solution can enhance your business.   In addition to the marketing concepts listed above, MIG offers access to multiple industry leading carriers that have appetites for Jewelers Property & Casualty insurance business, Worker’s Comp, Jewelers Block and many other lines that may be of interest.

How is this year’s terrible spring and summer weather affecting you, your customers and your business?

Weather Revenue Management Solutions