Washington, D.C., May 18, 2026 — The World Bank (International Bank for Reconstruction and Development, or IBRD, Aaa/AAA), priced a catastrophe (cat) bond that finances USD 200 million of insurance coverage against hurricanes for Jamaica replacing the previous cat bonds that financed USD 150 million coverage that was paid out to Jamaica following Hurricane Melissa, which hit the island in October 2025.
The transaction was oversubscribed by investors, which supported the upsizing of its initial target amount. The bond builds on the experience of the 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 (press release).
For Jamaica, the catastrophe bond and related risk transfer agreement form part of a multi-layered disaster risk financing strategy, helping to 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, complementing 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.
“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.
“We are proud to continue supporting Jamaica in accessing capital markets through the World Bank to strengthen its resilience against hurricane risk,” said Jorge Familiar, Vice President and Treasurer, World Bank Group. “The payout following Hurricane Melissa demonstrated once again how countries can prepare for disaster with well-designed parametric instruments that deliver fast, and reliable financial protection when it is needed most.“
“Jamaica’s commitment to building resilience and protecting livelihoods through hurricane insurance coverage is commendable. Having faced two significant hurricanes in the past two years, financial preparedness remains critical, and the World Bank will continue supporting Jamaica as it plans and builds forward,” said Susana Cordeiro Guerra, World Bank Vice President for Latin America and the Caribbean.
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).
“Moody’s is privileged to work with the World Bank on this latest bond issuance, which plays an important role in strengthening the Government of Jamaica’s mission to build financial resilience to natural disasters. Catastrophe bonds are increasingly important in providing timely access to funding following severe events, and it is important that they are underpinned by robust risk quantification,”said Michael Steel, General Manager, Moody’s – Insurance Solutions.
read more: https://www.worldbank.org/en/news/press-release/2026/05/18/world-bank-prices-catastrophe-bond-for-disaster-protection-for-jamaica
