The World Bank priced a catastrophe bond financing USD 200 million of insurance coverage against hurricanes for Jamaica, replacing previous cat bonds that financed USD 150 million in coverage paid out following Hurricane Melissa, which hit the island in October 2025, according to a press release issued on May 18, 2026 in Washington, D.C. The transaction was oversubscribed by investors, which supported the upsizing of its initial target amount. The bond builds on the experience of catastrophe bonds issued by the World Bank in 2021 and 2024 to support Jamaica. For the 3-year 2024 catastrophe bond, a full payout to Jamaica was triggered by Hurricane Melissa in 2025. The pre-agreed parametric triggers based on the storm’s path and intensity were met, demonstrating how these instruments can deliver rapid financial support after major disasters.
For Jamaica, the catastrophe bond and related risk transfer agreement form part of a multi-layered disaster risk financing strategy. It helps manage the fiscal impact of severe hurricanes while ensuring timely access to financial resources following extreme events. Jamaica is highly exposed to the financial consequences caused by hurricanes, which can have significant impacts on lives, livelihoods, and economic stability. The catastrophe bond provides pre-arranged financing for protection with regard to low-frequency, high-impact hurricane events. It complements other instruments such as budget reserves, contingent financing, and insurance.
The catastrophe bond was issued under IBRD’s “capital at risk” notes program, which enables member countries to transfer disaster-related risks to global capital markets. Under the transaction structure, the World Bank issues the bond and enters into a risk transfer agreement with the government of Jamaica, which pays a premium for the coverage based on the terms achieved in the capital markets. Aon Securities and Swiss Re Capital Markets were the joint structuring agents and joint bookrunners for the transaction. Moody’s RMS is the risk modeler and calculation agent. The cat bond will be listed on the Singapore Exchange (SGX).
“Having disaster risk financing in place is a key pillar of our resilience building framework. We thank our partner, the World Bank, for its continued support. The catastrophe bond is an important piece ensuring capital market access for Jamaica,” said the Hon. Fayval Williams, Minister of Finance and the Public Service, Government of Jamaica.
Jorge Familiar, Vice President and Treasurer, World Bank Group, said the payout following Hurricane Melissa demonstrated how countries can prepare for disaster with well-designed parametric instruments. Susana Cordeiro Guerra, World Bank Vice President for Latin America and the Caribbean, noted that Jamaica has faced two significant hurricanes in the past two years. She added that financial preparedness remains critical. The World Bank will continue supporting Jamaica as it plans and builds forward.
Investor distribution included Europe at 42%, North America at 41%, Bermuda at 16%, and Asia/Australia at 1%. By investor type, ILS Funds accounted for 69%, Asset Management for 25%, and Insurer/Reinsurer for 6%. The bond carries a risk margin of 6.75% per annum and a funding margin of 0.12% per annum, with a scheduled maturity date of May 23, 2030. The trade date was May 18, 2026, and the settlement date was May 26, 2026. The transaction reinforces Jamaica’s continued use of capital markets to strengthen resilience against hurricane risk.
