catastrophe swap

Hong Kong has now listed the first catastrophe bond notes on its stock exchange, with the World Bank issued $350 million of IBRD – Chile 2023 cat bond notes now housed on the Hong Kong Exchanges and Clearing Limited (HKEX).

The World Bank is “extremely pleased” with the response from investors and reinsurance markets to the recent placement of $630 million of catastrophe bonds and catastrophe swaps to protect Chile, Jorge Familiar, Vice President and Treasurer told us in our latest Artemis Live video.

For Chile, the completion of the largest single country catastrophe bond and swap transaction ever executed by the World Bank has resulted in $630 million of protection against earthquake risks, an important step towards more resilient public finances, the country’s Finance Minister Mario Marcel has said.

Chile has secured $630 million of earthquake insurance cover through its World Bank IBRD issued arrangement, with $280 million of catastrophe swaps to add to the recently priced $350 million IBRD – Chile 2023 catastrophe bond.

The Asian Development Bank (ADB) has launched its first pilot disaster insurance scheme in the Philippines and has also approved a $500 million loan for the country that is contingent on a natural disaster or public health emergency occurring.

Discussions on the use of insurance, reinsurance and capital market products for disaster risk financing are rising up the agendas of international meetings focused on the Asia-Pacific region.

Hiscox Re ILS deployed capacity into the recent renewal of the Philippines sovereign parametric disaster insurance facility, adding to the amount of third-party capital now backing this risk transfer program.

The recently renewed Philippines parametric natural disaster insurance cover was completed at $390 million in size, around double the prior year, and the World Bank has confirmed that work is underway to issue a catastrophe bond to extend disaster protection for the country.

Insurance-linked securities (ILS) investment fund manager Nephila Capital and Swedish state sector pension fund AP3 have both backed a near $390 million renewal for the Philippines regional parametric disaster insurance program.

The World Bank has been involved in another risk-linked transaction with the completion of a catastrophe swap transaction that benefits the Philippines, providing the government with a source of parametric risk transfer against losses caused by typhoons or earthquakes.