British Gas Trading, a subsidiary of UK energy company Centrica, has concluded a £40 million weather hedge with Bermuda-based global insurance firm XL Capital. The multi-year deal may prove to be the largest in Europe this year.

Centrica finalised a five-year, zero-coupon hedge with XL Capital, structured as a “fairly tight” collar, Geariod Lane, head of electricity supplies at Centrica Energy Management Group, told EPRM.

Centrica will pay out if the average daily temperature for any individual