IBRD CAR Jamaica 2024

After the devastating impacts of hurricane Melissa triggered a full $150 million payout of its IBRD CAR Jamaica 2024 parametric catastrophe bond, the rapid funding from this insurance product helped the country recover its electricity network faster than would have otherwise been possible, the government’s Chief Fiscal Economist explained last week.

The Government of Jamaica has announced its intention to renew its Caribbean Catastrophe Risk Insurance Facility (CCRIF-SPC) parametric risk transfer coverage in May 2026. However, there has been no confirmation regarding the potential for any renewal of its World Bank-facilitated catastrophe bond.

Reflecting on the impacts of Hurricane Melissa, Jamaica’s Prime Minister Dr. Andrew Holness has stressed the importance and effectiveness of responsive disaster risk financing instruments in reducing the country’s debt burden in the aftermath of the hurricane.

Reflecting on Hurricane Melissa’s impacts on Jamaica, Hon. Andre Ebanks, MP, Premier & Minister for Financial Services and Commerce, of the Cayman Islands, said that the British Overseas Territory should also look to financial instruments such as catastrophe bonds for future protection.

The World Bank has announced today that following the events of Hurricane Melissa, the Government of Jamaica will receive a full 100% payout of its $150 million IBRD CAR Jamaica 2024 parametric catastrophe bond.

Moody’s RMS Event Response has provided a best estimate for the insurance and reinsurance industry losses from recent hurricane Melissa of $3.5 billion, with a range of between $3 billion and $5 billion anticipated.

Catastrophe modelling firm Karen Clark & Company (KCC) is the latest to issue an estimate for the insurance industry loss from recent major hurricane Melissa, pegging the total at US $2.4 billion.

Hurricane Melissa is only estimated to have caused insured losses in a range from US $1 billion to US $2.5 billion in Jamaica, according to catastrophe modeller Cotality, with the total expected pegged at US $1.5 billion, while the economic impacts are far higher demonstrating the protection gap.

As Jamaica awaits an official determination on a potential $150 million payout from its IBRD CAR Jamaica 2024 parametric catastrophe bond from Hurricane Melissa, ratings agency Fitch has said that it does not expect to see any adverse reaction from the insurance-linked securities (ILS) market as a result of the payout.

The World Bank has said that it expects to mobilise a broad package of financial support to aid Jamaica’s recovery from major hurricane Melissa and the development organisation has now stated that a payout of the country’s catastrophe bond is deemed likely.