April 30, 2024
According to the Jamaica Observer, The Government of Jamaica, with the assistance of the World Bank, has secured US$150 million in insurance coverage against tropical cyclones through a catastrophe bond. Following a similar undertaking in 2021, this is the second time such a bond has been issued for Jamaica, with 15 global investors participating.
The bond covers hurricane seasons from 2024 to 2027 and complements Jamaica’s disaster risk financing strategy. Considering Jamaica’s vulnerability to tropical cyclones endangering lives, livelihoods, and the nation’s economic stability, the bond contributes to a “multi-layered disaster risk financing strategy”. This strategy seeks to alleviate the financial impact of natural disasters while enabling prompt government responses.
Payouts are triggered by specific criteria related to the severity and location of named storm events. The World Bank praised Jamaica’s proactive fiscal management and emphasized the importance of such financial instruments for disaster-prone regions. Aon Securities, Swiss Re Capital Markets, and AIR Worldwide were key partners in structuring and managing the bond, which will be listed on the Hong Kong Exchange.
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