Jamaica sponsors first ever, $185mn cat bond

The World Bank has priced a catastrophe bond that will provide Jamaica’s Government with $185 million cover against named storm losses over the next three Atlantic tropical cyclone seasons.

Jamaica is the first government in the Caribbean region to independently sponsor a cat bond.

Back in 2014, the country was one of the sixteen in the Caribbean Catastrophe Risk Insurance Facility that benefited from The World Bank’s first ever cat bond.

The bonds were issued under the bank’s “capital at risk” notes program, which can be used to transfer risks related to natural disasters and other risks from developing countries to the capital markets.

Payouts to Jamaica will be triggered when a named storm event meets the parametric criteria for location and severity set forth in the bond terms.

The transaction includes a reporting feature designed for quick payout calculation within weeks of a qualifying named storm.

It is also the first cat bond to use a cat-in-a grid parametric trigger design for tropical cyclone risk.

The transaction received financial support from the United States Agency for International Development, the World Bank’s Disaster Protection Program funded by the United Kingdom, as well as the Global Risk Financing Facility.

Jingdong Hua, Vice President and Treasurer, World Bank, said, “We are pleased to be able to support this transaction and bring together so many different partners all committed to strengthening Jamaica’s resilience to tropical cyclones.

“We especially thank the capital market investors for their support and participating in this important mission.”

Carlos Felipe Jaramillo, Vice President for Latin America and Caribbean, World Bank, noted, “The Caribbean region is vulnerable to climate related events and we know how important it is to protect the welfare of the people in the region. We are proud to support Jamaica in reducing risks associated with these kinds of events.”

Dr. The Hon. Nigel Clarke, Minister of Finance and the Public Service, Government of Jamaica, added, “The Government of Jamaica has strategically prioritized Disaster Risk Financing to mitigate the adverse fiscal impact of tropical cyclones and natural disasters, thereby strengthening Jamaica’s economic resilience.

“We are pleased with the successful placement of this catastrophe bond, which adds an indispensable layer of disaster risk financing that complements our multi-layered approach. In this transaction, Jamaica benefited from the vast technical resources of the World Bank, and from the strength of its balance sheet.

“We are also grateful to our bilateral partners, the Governments of the United Kingdom and Germany, through the Global Risk Financing Facility, and to the United States through the United States Agency of International Development who provided financial support for the transaction.”

You can read all about this transaction in sister site Artemis’ comprehensive catastrophe bond Deal Directory.

The post Jamaica sponsors first ever, $185mn cat bond appeared first on ReinsuranceNe.ws.

Source: https://www.reinsurancene.ws/jamaica-sponsors-first-ever-185mn-cat-bond/

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