sovereign cat bond

This video features another panel discussion from our Artemis ILS Asia 2023 conference, held in Singapore on July 13th 2023, a session focused on public sector and sovereign risk transfer schemes and the use of catastrophe bonds and capital markets capacity.

When it comes to the use of catastrophe bonds in disaster risk financing, so far we’re only “scratching the surface”, in terms of what can be done using the cat bond structure, according to Jorge Familiar, Vice President and Treasurer of the World Bank.

While the World Bank has been a key driving force in the catastrophe bond market for many years, of late its senior leadership has been relatively quiet about the use of cat bonds as a key disaster risk financing and risk transfer option for its sovereign client-base.

Mozambique has been hit by one of the worst natural disasters to ever strike the country, after cyclone Idai barreled into its coastline and drenched the region, resulting in hundreds of deaths and significant devastation.

For sovereign governments, having a source of disaster risk financing and insurance provided by catastrophe bonds can help the government to borrow more on the capital markets, improve its standing with debtors and ultimately provide welfare gains to the population, according to a study.