Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Hurricane Rina unlikely to trigger MultiCat Mexico 2009 catastrophe bond


It isn’t often that a single catastrophe bond transaction is threatened by two events in as many weeks, but it’s only just over two weeks since the MultiCat Mexico 2009 Ltd. cat bond was threatened by Jova on the Mexican Pacific coast and now the same cat bond is threatened by another hurricane bearing down on the Mexican eastern coast, hurricane Rina.

Hurricane Rina is heading for the Yucatan peninsula and likely to come very close to some of the tourist resorts including Cozumel and Cancun by late Thursday or early on Friday. That region of Mexico, being a highly touristic area, is one of the trigger zones for the MultiCat Mexico 2009 cat bond.

You can see the different trigger zones from the MultiCat Mexico cat bond tranches below:

MultiCat Mexico 2009 hurricane trigger zones

MultiCat Mexico 2009 hurricane trigger zones

The Class D notes are the ones which have exposure to hurricanes striking the Yucatan peninsula area of Mexico. As with Jova though, for any hurricane to qualify and trigger MultiCat Mexico it has to strike within the specified geographic zone and also have a minimum central pressure below a certain amount.

For the Class D notes to be triggered, a hurricane has to have a minimum central pressure of 920mb or below. Currently, hurricane Rina has a minimum central pressure of 967mb and it is hard to believe that the pressure will drop an additional 47mb as Rina approaches landfall.

Hurricane Rina is currently a major Category 2 storm with sustained winds of as much as 110mph. Rina is forecast to intensify slightly before landfall, but it’s unlikely it would be sufficient to come anywhere near triggering the MultiCat cat bond transaction.

You can see hurricane Rina’s current position and forecast path below. We’ll update you should the situation change dramatically and Rina pose any threat to MultiCat Mexico.

Hurricane Rina forecast path

Hurricane Rina forecast path

Rina’s destination after striking Yucatan is less certain, with some forecast models predicting that the hurricane will strike Florida and others predicting a curving motion over Cuba. We’ll update you once hurricane Rina’s forecast path becomes more certain.

Register today for ILS NYC 2023, our next insurance-linked securities (ILS) market conference. Held in New York City, February 10th, 2023.

Artemis ILS NYC 2023 - Insurance-linked securities conference in New York City

Get a ticket soon to ensure you can attend. Secure your place at the event here!

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.