world bank

The African nation of Kenya is the next country in line to benefit from a Catastrophe Deferred Drawdown Option (Cat DDO) from the World Bank, with a project underway to deliver a $200 million disaster risk financing arrangement including a catastrophe contingent line of credit, alongside development financing.

The establishment of the World Bank’s capital-at-risk notes program almost four years ago set the foundation for continued innovation and expansion, as the organisation looks to “push the boundaries” of insurance-linked securities (ILS) market risks, according to Michael Bennett, Head of Derivatives & Structured Finance, World Bank Treasury.

The Dominican Republic has secured the first catastrophe contingent line of credit in the Caribbean, with a $150 million Catastrophe Deferred Drawdown Option (Cat DDO) supported by the World Bank, that provides immediate financing in the event of natural disasters or public health emergencies.

The World Bank has called for the ongoing development of its Pandemic Emergency Financing Facility (PEF), to incentivise greater investment in preparedness, and take advantage of the opportunity to deliver business interruption (BI) cover for the private sector as it works towards PEF-2.

The Philippines has long been the focus of disaster risk financing and insurance discussions, given its exposure to typhoons, earthquakes, fires, rainfall, floods and drought, and now the Asian Development Bank (ADB) is examining options for disaster insurance facilities.

The World Bank is working hard on its initiative that it terms the “first-ever insurance market for pandemic risk”, the Pandemic Emergency Financing Facility (PEF) and hopes to see a transaction come to market this year.

The World Bank’s Global Index Insurance Facility (GIIF) and African Reinsurance Corporation (Africa Re) have teamed up to provide a facility that will help to cap insurers loss ratios on weather index-insurance schemes in Africa.

International catastrophe risk modeling firm AIR Worldwide has been selected by the World Bank to model the Pandemic Emergency Financing Facility (PEF), and has also announced substantial enhancements to its Global Pandemic Model.

Climate change impacts will directly and indirectly exacerbate the frequency and intensity of pandemic outbreaks, according to research, emphasising the importance of the Pandemic Emergency Financing Facility (PEF), reinsurance and other risk transfer solutions.

The World Bank has launched the “first-ever insurance market for pandemic risk”, the Pandemic Emergency Financing Facility (PEF), which is designed to rapidly disburse capital in the event of deadly pandemics and will be backed by pandemic catastrophe bonds and reinsurance.