World Bank Catastrophe Bond Pays Jamaica $150 Million After Hurricane

The Government of Jamaica will receive a $150 million payout after Hurricane Melissa triggered a full redemption of a catastrophe bond issued in 2024 by the World Bank. The payment was activated when pre-agreed parametric triggers—based on the storm's central pressure and path—were met, as confirmed by AIR Worldwide Corporation, the bond's independent calculation agent.

Jamaica, one of the most disaster-prone countries globally, renewed its insurance coverage for named storms with the World Bank through the 2024 catastrophe bond, following an initial issuance in 2021. The parametric structure allows for rapid disbursement of funds, bypassing the need for damage assessments by relying instead on physical storm characteristics reported by the National Hurricane Center.

Catastrophe bonds transfer natural disaster risk to global capital markets and have been recognized by credit rating agencies as beneficial to national financial stability. They form a core part of Jamaica's broader disaster risk management strategy.

Jorge Familiar, World Bank vice president and treasurer, said, "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."

The World Bank Group plans to supplement the bond payout with additional assistance, including emergency financing, reallocated project funding, and support from the International Finance Corporation, its private-sector arm.

"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.

Catastrophe insurance backed by bonds is part of the World Bank's Crisis Preparedness and Response toolkit, which helps developing countries access emergency cash quickly, expand insurance coverage, and pause debt payments after disasters.