When Hurricane Katrina hit the US Gulf coast last month, it was bad news for some parts of the financial world. But one group of financiers who might have had cause to celebrate were those involved in marketing the fast-growing world of weather derivatives.

Trading in weather derivatives – or futures contracts that allow betting on or hedging against certain meteorological occurrences – has skyrocketed on the Chicago Mercantile Exchange in recent months: more than 500,000 contracts had traded by the end of August, more than three times as many as during the whole of 2004.