Jamaica secures $200m of parametric hurricane insurance with third catastrophe bond

The Government of Jamaica has now successfully secured its one-third upsized target of $200 million of parametric named storm and hurricane insurance protection from its new World Bank facilitated IBRD CAR Jamaica 2026 catastrophe bond issuance, pricing the coverage within guidance, while ILS funds were the main supporters of this deal.

It marks Jamaica’s third successful sponsorship of a catastrophe bond and also the largest amount of protection it has secured from the capital markets, in cat bond form, to-date.

As we reported, Jamaica came back to market for its third catastrophe bond sponsorship at the end of April, initially targeting $150 million of parametric named storm and hurricane protection.

We then detailed in a second report on this issuance, how the target size for Jamaica’s new catastrophe bond had been increased by one-third, while the price guidance had been narrowed around the middle of the initial range.

Now, we understand the pricing date to have been yesterday, with Jamaica successfully securing the upsized $200 million of notes at a risk margin in the lower-half of guidance, making this the largest cat bond the country has sponsored so far.

Jamaica’s second catastrophe bond was exhausted after paying out in full following the devastating impacts of hurricane Melissa in October 2025, which triggered the notes and Jamaica’s government benefited from the $150 million payout within weeks, to aid in the countries recovery.

So it was encouraging to see the Caribbean island nation returning to the cat bond market in April, looking to install another responsive layer of hurricane protection from the capital markets towards the top of its layered approach to disaster risk finance protection.

The World Bank said the new cat bond was oversubscribed by investors, which helped to support the upsizing of this offering from the initial $150 million of parametric protection target, to the $200 million it will now provide to Jamaica.

Jamaica first secured parametric hurricane insurance to add to its disaster risk protection with the support of the capital markets through the $185 million IBRD CAR 130 cat bond in 2021.

The government followed up with a $150 million renewal through the IBRD CAR Jamaica 2024 issuance in May 2024, which was the cat bond that paid out in full after Melissa struck the island last year and its intensity triggered the parametric coverage.

The World Bank said of the new issuance, “The bond builds on the experience of the catastrophe bonds issued by the World Bank in 2021 and 2024, to support Jamaica.”

“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,” commented Minister of Finance and the Public Service, Government of Jamaica, the Hon. Fayval Williams.

“We are proud to continue supporting Jamaica in accessing capital markets through the World Bank to strengthen its resilience against hurricane risk,” added 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,” Susana Cordeiro Guerra, World Bank Vice President for Latin America and the Caribbean further explained.

The new 2026 cat bond notes are being issued by the World Bank’s International Bank for Reconstruction and Development (IBRD), under its global debt issuance facility and the Capital-At-Risk notes program.

The IBRD Jamaica 2026 cat bond notes are now confirmed to provide the Government of Jamaica with a $200 million capital markets supported source of parametric per-occurrence named storm and hurricane protection, that will run across a term covering four hurricane seasons, with maturity expected in May 2030.

For more details on the trigger design, see our Deal Directory entry for this Jamaica 2026 cat bond.

The $200 million of Jamaica 2026 catastrophe bond notes that the IBRD is issuing for the country come with an initial expected loss of 2.48%.

The notes were first offered to investors with a risk margin guidance in a range from 6.5% to 7.25%, which as we reported was first narrowed to an updated range of 6.75% to 7% and now have priced to pay investors a risk margin of 6.75%, so within the lower-half of the initial range that was offered.

That indicates strong investor demand, which served to oversubscribe the offering and helped Jamaica upsize the protection by one-third, while securing the parametric hurricane coverage at pricing in the lower-half of guidance.

Specialist insurance-linked securities (ILS) funds took the majority of this new issuance.

The World Bank said that, in terms of investor distribution, 69% went to dedicated ILS funds, 25% to other asset managers and 6% to insurance or reinsurance companies.

In terms of geographic distribution, European investors took 42% of the offering, North American investors 41%, Bermuda based investors took 18% and Asia or Australia based investors took 1%.

Aon Securities and Swiss Re Capital Markets acted as the joint structuring agents and joint bookrunners for the third Jamaica catastrophe bond transaction. Moody’s RMS acted as the risk modeler and calculation agent.

Michael Steel, General Manager, Moody’s – Insurance Solutions, commented, “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.”

The $200 million of IBRD CAR Jamaica 2026 catastrophe bond notes will now be listed on the Singapore Exchange (SGX), which presumably means the issuance will benefit from Singapore’s Insurance Linked Securities Grant Scheme.

Jamaica will now benefit from a larger $200 million layer of parametric cat bond protection that will occupy one of the upper-layers of its multi-layered disaster risk financing strategy for the next hurricane seasons.

The catastrophe bond again brings capital markets support that could prove invaluable in providing rapid financing should Jamaica be hit by any major hurricanes across four seasons, bolstering the Caribbean nations risk transfer protection.

You can read all about this IBRD CAR Jamaica 2026  catastrophe bond and more than 1,000 other cat bond transactions in the extensive Artemis Deal Directory.