$150M US ‘catastrophe bond’ issued last year headed to full payout, will provide Jamaica immediate help
For the past decade, Jamaica has been building layers of financial protection in the event of a natural disaster. Now, after Hurricane Melissa tore through the country, destroying homes, roads and essential infrastructure, the country’s strategy might pay off — and provide a model for climate-vulnerable nations elsewhere
Last year, the country issued $150 million US in a catastrophe or “cat” bond — triggered in case of certain parameters related to how strong a hurricane is and where it passes through.
“They are linked to the central pressure of the hurricane when it makes landfall,” said Florian Steiger, CEO of Icosa Investments, a Swiss firm that focuses on catastrophe bonds. A third party needs to verify the trigger, but there’s no question in this case the necessary threshold has been crossed.
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