The World Bank has issued a new catastrophe bond providing Jamaica with USD 200 million in hurricane insurance coverage, replacing the previous USD 150 million bond that paid out after Hurricane Melissa in October 2025. The transaction was oversubscribed, reflecting strong investor demand, and builds on earlier World Bank cat bonds issued in 2021 and 2024. The payout from Hurricane Melissa demonstrated the effectiveness of parametric instruments, which deliver rapid financial support based on pre‑agreed triggers tied to storm path and intensity.
For Jamaica, the bond is part of a multi‑layered disaster risk financing strategy designed to manage the fiscal impact of severe hurricanes and ensure timely access to resources. The country is highly vulnerable to hurricane damage, and the bond provides pre‑arranged financing for low‑frequency, high‑impact events, complementing budget reserves, contingent financing, and insurance. Issued under the World Bank’s “capital at risk” notes program, the bond transfers disaster risk to global capital markets, with Jamaica paying a premium for coverage.
Government officials emphasized the importance of disaster risk financing as a pillar of resilience. Finance Minister Fayval Williams thanked the World Bank for its support, while World Bank leaders Jorge Familiar and Susana Cordeiro Guerra highlighted Jamaica’s commitment to preparedness and resilience. The bond was structured by Aon Securities and Swiss Re Capital Markets, with Moody’s RMS serving as risk modeler and calculation agent.
Investor participation was broad, with Europe accounting for 42% of distribution, North America 41%, Bermuda 16%, and Asia/Australia 1%. Investor types included ILS funds (69%), asset managers (25%), and insurers/reinsurers (6%). The bond will be listed on the Singapore Exchange, with terms including a parametric per‑occurrence trigger, compounded SOFR plus margins as coupon, and maturity in May 2030.
This issuance underscores the growing role of catastrophe bonds in providing timely disaster financing and strengthening fiscal resilience. For Jamaica, it represents a critical safeguard against the economic and social impacts of hurricanes, ensuring that resources are available when disasters strike.
