GRITIT

Jason Petsch, commercial director at GRITIT spoke at the event on the theme of ‘the full cost of the last few winters’. His speech addressed the effects on the UK economy and measures which should be undertaken to better manage expenditure.

GRITIT 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 business 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 robust and affordable winter maintenance solutions to private and public companies in the retail, commercial, industrial, logistics and health sectors. It is estimated that – this year – the company will provide in excess of 165,000 service visits across the UK.

In his presentation Petsch highlighted headline figures, such as that drawn out by The Federation of Small Businesses and the estimated cost to the economy of between £600 million to £1 billion per day, during last year’s ‘Big Freeze’. He commented: “The possibility that future winters could damage finances in the same way again is only adding to the considerable pressure everyone faces when trying to balance budgets at the same time as protecting essential services.”

He then went on to look at what could be learnt from other industries and sectors in relation to cost management in relation to affects of the weather. He commented: “What can be done to prevent overspending and what actions taken to get budgets under control? The massive local government overspend of winter 2010/11 could have been prevented, and it could not have come at a worse time – in the wake of the austerity measures, the recession, and the VAT, fuel and energy price increases.

“What we absolutely cannot afford is a reduction of service. Poor service at any level, public or private, has a direct disproportionate effect on surrounding infrastructure, which will result in excessive costs elsewhere.”

Petsch highlighted the example of the U.N.’s World Food Programme Trial (WFP), and the work undertaken by WFP to develop the first insurance contract for humanitarian emergencies – reducing overall cost, vs. the potential financial exposure following a drought. “This contract heralds the beginning of what may be an entirely new way of financing natural disaster aid.”(1)

In 2010, GRITIT launched first-to-market ‘frost day’ certificates, weather derivatives arranged by Zurich-based Company Celsius Pro (a weather risk specialist). Weather certificates are financial instruments, which can be used by organisations as part of a risk management strategy. Customers receive an automatic payout if predefined weather parameters, in this case a certain number of frost days, are exceeded.

Petsch added: “Weather certificates are the next logical step for any organisation looking to protect or hedge against the financial effects of cold weather. In addition to the need to remain safe and operational during extreme weather conditions; clients’ focus has – understandably – shifted towards sustainability and protecting budgets. The solution is not to reduce services to manage costs, but to stabilise costs by managing the financial risks of adverse weather.”

He then went on to look at what the future could potentially hold in terms of contracts for wind, solar and hydroelectric energy. He added: “There is every indication that the weather patterns of winter 2012 will repeat the last two years; at the end of the day success will rely on thorough planning and execution.”

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.

GRITIT 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.

(1) Richard Wilcox, Director of Business Planning at World Food Program

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