Despite the fact a catastrophe bond for Jamaica has not yet come to market, after receiving support to pay premiums for the in-development first issuance the Caribbean island nation is already preparing to budget for its future renewal.
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Jamaica’s mission to secure catastrophe bond coverage as part of its disaster risk financing plan continues, with progress being made in terms of risk modelling while the World Bank has funded the country to help in paying cat bond premiums to investors.
The work to issue a catastrophe bond for Jamaica continues, with the World Bank providing risk modelling support and expertise to assist in getting a transaction to market, the countries Finance Minister said.
The Jamaican government has said it is actively working with the World Bank on a catastrophe bond issuance, as the final piece of a disaster risk financing tower for the country is put into place.
The Jamaican government continues to discuss disaster risk financing instruments including catastrophe bonds with bilateral and multi-lateral partners and is developing a Public Financial Management Policy for Natural Disaster Risk.
Both India and Jamaica have been having discussions on disaster risk financing and risk transfer solutions, including ILS, with the World Bank and other international organisations, as the two countries look to put in place measures to ensure funding is quickly available when the most impactful natural disasters strike.
The Jamaican government continues to work with the World Bank to identify and develop a long-term disaster risk financing strategy and a report from this work found that Jamaica faces an average of US $121 million of hurricane and flood damages every year.
In a recent speech, the Minister of Finance and the Public Service for Jamaica, Dr. Nigel Clarke, explained that the country needs better disaster risk financing structures in place, with catastrophe bonds cited as one option that may be suitable.
There are questions being asked in Jamaica about the risk model that underpins the regional catastrophe insurance policies issued by the CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility), after torrential rainfall and resulting flooding in May failed to trigger the countries parametric coverage.
The World Bank is working with the Jamaican government and general insurance companies to develop an adequate and effective disaster risk financing strategy in the region, amidst concerns CCRIF SPC coverage is not sufficient alone to support the country in the face of major losses.