In a momentous stride towards innovative risk management, China achieved a remarkable milestone on July 31, 2023—the inaugural launch of a weather derivative deal. The significance of this event reverberated through a distinguished assembly, including representatives from esteemed institutions such as the Dalian Commodity Exchange, China Life P&C, Zhongtai Futures, China Meteorological Administration, as well as governmental dignitaries. This groundbreaking initiative heralds a new era, empowering corporations with the tool of weather derivatives to deftly navigate their weather exposures. 

Tensoren Technology, with close cooperation with China Life P&C, structured and executed the deal. At the heart of this pioneering product lies the introduction of temperature OTC options, which enables the transfer of corporate weather risks. This not only forges an innovative addition to the government-endorsed insurance + futures scheme, but also bolsters the foundation of the domestic weather derivatives market.The transaction adopts a zero-cost-collar option, thus minimizing capital encumbrance for air-conditioner companies.

The realms of industry are intricately woven with the caprices of weather, with far-reaching impacts spanning diverse sectors. For the aquaculture industry, the sweltering grasp of a summer heatwave translates into augmented costs and potential losses. The necessity to infuse ponds with oxygen places financial strain on aquaculture farms. In contrast, purveyors of air-conditioning systems revel in a heatwave, as it propels higher revenues and alleviates inventory costs. Conversely, a cooler summer casts a shadow of diminished revenue and escalated inventory expenditures. The harmonious convergence of aquaculture farms and air-conditioner wholesalers in this transaction begets mutual advantages: during scorching summers, air-conditioner sellers financially compensate farmers to offset supplementary costs; conversely, in cooler seasons, farmers indemnify air-conditioner enterprises to counterbalance revenue loss and inflated inventory expenses. This synergy seamlessly integrates with the government's "insurance + futures" scheme, meticulously designed to buttress the bedrock of the real economy, particularly the agricultural sector.

Cheng Weidong, Deputy General Manager of Dalian Commodity Exchange, said that the solution unfurls a pivotal avenue for financial institutions to leverage the "Central Meteorological Observatory-DCE Temperature Index" in service of the real economy. Its seamless alignment with the "insurance + futures" scheme spawns a self-contained loop of OTC derivative products, dispersing risks and bestowing mutual benefits.

Yuanyong Long, CEO of Tensoren Technology chaired a panel discussion themed "Forging an Ecosystem of Weather Derivatives for the Real Economy". Eminent figures from Dalian Commodity Exchange, Central Meteorological Observatory, China Life P&C, futures enterprises, aquaculture ventures, and electricity sales corporations converge to offer diverse perspectives on cultivating an ecosystem of weather derivatives. Long articulates the glaring chasm between the appetite for weather risk solutions and the paucity of available offerings. He touts weather derivatives for their adaptable solutions that bolster the resilience of corporations ensnared in the clutches of climatic uncertainty. Collective participation in nurturing such an ecosystem, Long underscores, stands as a testament to our commitment to the real economy's prosperity.

The press conference garnered extensive media coverage, drawing the attention of a multitude of prominent outlets. Renowned institutions such as Xinhua News Agency, China Banking and Insurance News, China Securities Journal, Shanghai Securities News, Futures Daily, Guangdong Radio and Television Station, Nanfang Daily, Yangcheng Evening News, Nanfang Rural News, and more, converged at the conference venue. In the wake of the event, comprehensive reports capturing its significance and unfolding details were subsequently published, amplifying the reach and impact of this historic moment.