jamaica

CCRIF SPC, the Caribbean and Central America Parametric Insurance Facility and Development Insurer, has unveiled a new parametric insurance product, the Livelihood Protection Policy (LPP), in Jamaica as the country continues to deal with the aftermath of Hurricane Melissa.

Having already seen its parametric tropical cyclone insurance triggered by major hurricane Melissa’s winds, Jamaica is now set to also benefit from a payout under its CCRIF SPC parametric excess rainfall policy, taking the total it will receive to $91.9 million.

CCRIF SPC, the Caribbean and Central America Parametric Insurance Facility and Development Insurer, is set to make its biggest single payout after after major hurricane Melissa triggered Jamaica’s tropical cyclone policy.

The Government of Jamaica has prepared itself for the 2025 hurricane season with a further increase to its National Natural Disaster Risk Financing Policy arrangements, with the largely parametric reserves and contingent financing augmented with parametric insurance and its World Bank catastrophe bond.

Jamaica’s holistic disaster risk financing (DRF) strategy provided enough access to funding following the impacts of Hurricane Beryl, according to Conor Meenan, Lead Risk Finance Adviser at the Centre for Disaster Protection, despite the World Bank facilitated $150 million parametric IBRD CAR Jamaica catastrophe bond not being triggered.

Work is underway to develop a catastrophe bond for the Caribbean region with the support of the World Bank, with four countries currently engaged and as many as four others thought likely to join the effort.

When a renewal comes up for consideration for the first catastrophe bond transaction to be sponsored by Jamaica, there is already some discussion regarding the need for a larger cover to be in place, or for it to be expanded to cover additional Caribbean island nations, a World Bank Managing Director has said.

Catastrophe bonds and parametric insurance have both been highlighted by the President of the Caribbean Development Bank (CDB) in a speech laying out priorities for 2022 and a plan for marshalling financing to support regional economies.

Fitch Ratings has made an interesting observation related to the Jamaica’s first catastrophe bond, the $185 million IBRD CAR 130 transaction that came to market in July. It represents the largest World Bank facilitated cat bond, relative to the sponsor government’s GDP.

The fact foreign donors paid for the premiums associated with Jamaica’s first catastrophe bond does not mean it was a “handout” the country’s Minister of Finance has explained.