Pandemic cat bond news

According to the latest official World Health Organisation (WHO) data, the spread of the recent Lassa fever outbreak in Nigeria has slowed and as a result the number of confirmed cases has risen much more slowly in recent weeks, reducing the risk posed to investors in the World Bank’s pandemic swaps and catastrophe bonds.

The number of confirmed deaths from the Lassa fever outbreak in Nigeria has risen according to the latest information available from the World Health Organisation (WHO), which means that the risk posed to investors in the World Bank’s pandemic swaps and catastrophe bonds has crept up slightly.

The World Bank has confirmed that it believes the recent outbreak of Lassa fever in Nigeria is an “Eligible Event” under the terms of the Class B pandemic swaps and pandemic catastrophe bonds that were issued to support the financing of the Pandemic Emergency Financing Facility (PEF).

The World Bank actively working to emulate its successful establishment of the Pandemic Emergency Financing Facility (PEF) for other humanitarian crises, such as famine, including the use of financial market risk transfer instruments, such as the pandemic catastrophe bonds and swaps.

As capital markets investors become increasingly comfortable and understanding of pandemic risk, third-party reinsurance capital is having an influence at the start, during and after an infectious disease outbreak, according to Cory Anger, Global Head of ILS structuring, GC Securities.

Swedish state sector pension fund AP3 was one of the lead investors behind the recent World Bank issuance of $320 million of pandemic catastrophe bonds that support the Pandemic Emergency Financing Facility (PEF).

San Francisco based Metabiota, a company focused on risk analytics for epidemics, has launched its first commercial risk modelling platform and a preparedness index to help insurance or reinsurance firms and ILS funds or investors understand and underwrite epidemic risk.

The World Bank’s Pandemic Emergency Financing Facility (PEF) and its use of pandemic catastrophe bonds will improve the speed at which emergency response can reach areas experiencing an epidemic or pandemic outbreak, says reinsurance giant Munich Re.

The World Bank has added $105 million of pandemic risk linked swaps to its now $320 million of pandemic catastrophe bonds, in order to support the majority of the $500 million of backing for the Pandemic Emergency Financing Facility (PEF).

The targeted maximum size for the catastrophe bond issuance that will transfer risk for the World Bank designed Pandemic Emergency Financing Facility (PEF) has dropped slightly to $350 million through the International Bank for Reconstruction and Development issued IBRD CAR 111-112 capital at risk notes.