Jamaica to Receive $150 Million Payout from World Bank Catastrophe Bond After Hurricane Melissa
Washington — Jamaica will receive a full payout of $150 million under its catastrophe insurance with the World Bank following Hurricane Melissa. The payout comes from a catastrophe bond issued in 2024 by the World Bank (IBRD, AAA/Aaa).
Third-party analysis by AIR Worldwide confirmed that the hurricane met pre-agreed parametric triggers, based on the storm’s central pressure and path, qualifying Jamaica for full redemption.
Jamaica, one of the Caribbean’s most disaster-exposed countries, has been using catastrophe bonds since 2021 as part of a comprehensive disaster risk management strategy. These bonds transfer financial risk from natural disasters to global capital markets, providing rapid financial support when needed.
“Our thoughts are with the people of Jamaica as they recover and rebuild from this tragedy. Jamaica’s comprehensive disaster risk management strategy and proactive approach serve as a model for countries facing similar threats and seeking to strengthen their financial resilience to natural disasters,” said Jorge Familiar, World Bank Vice President and Treasurer. “The payout underscores the role of catastrophe bonds in effective risk management strategies and their efficiency in transferring disaster risks to capital markets.”
In addition to the bond payout, the World Bank Group has prepared a broad support package for Jamaica, including emergency finance, redeployment of project funds, and private-sector assistance through the International Finance Corporation.
“As Jamaica confronts the aftermath of Hurricane Melissa, its strong commitment to preparedness is proving its worth — allowing the country to move swiftly from relief to reconstruction and to use this moment not just to rebuild, but to leapfrog toward more resilient infrastructure”, said Susana Cordeiro Guerra, World Bank Vice President for Latin America and the Caribbean. “The World Bank Group stands with the Government and people of Jamaica to help rebuild stronger, restore livelihoods, and set a new benchmark for resilience across the Caribbean.”
Catastrophe insurance backed by catastrophe bonds is part of the World Bank’s Crisis Preparedness and Response toolkit, which provides developing countries with an innovative suite of tools to better respond to crises and prepare for future shocks. This includes fast access to cash for emergency response, expanded catastrophe insurance, and the option to pause debt service payments in the aftermath of a natural disaster. – World Bank Group