Fancy Insurance: Australia's Graincorp Buys Cash-Flow Smoothing Product From Aon

Our headline is somewhat deceptive as it appears the contract is set up as a swap rather than as straight insurance.
From Reuters:

GrainCorp locks in derivative to drought-proof earnings

GrainCorp Ltd, Australia’s largest listed bulk grain handler, has signed a 10-year deal with insurance broker Aon Plc to boost its earnings during times of severe drought, after taking a profit hit from prolonged dry weather.

GrainCorp’s revenues have been under pressure for the last few years after drought across Australia’s east coast cut production - limiting the bulk grain handler’s ability to earn revenues from storing the crops and exporting them.

To reduce cash flow volatility, GrainCorp said on Friday it has entered into an agreement that will see it receive extra payments in times of drought, while it will have to pay out when seasonal conditions are good.

GrainCorp shares rose nearly 5 percent in morning trade on expectations the agreement would kick in during the current year on forecasts for extended hot, dry weather across east coast growing areas.

“The contract will smooth GrainCorp’s cash flow and allow for longer term capital allocation and business planning through the cycle,” Chief Executive Mark Palmquist said in a statement.

Under the deal, GrainCorp will receive a payment of A$15 ($10.46) per tonne when grain production from Australia’s east coast winter crop falls below 15.3 million tonnes. Payments will be capped at A$80 million a year....

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If interested see also:
An Old-school Discussion of Commodity Storage and Financialization