Jamaica will receive a full payout of $150 million under its catastrophe insurance coverage with the World Bank, after Hurricane Melissa met the pre-agreed parametric triggers for activation. The payout, backed by a World Bank-issued catastrophe bond (IBRD, AAA/Aaa) launched in 2024, will provide Jamaica with vital funds for recovery and rebuilding in the wake of the devastating storm.
Independent analysis conducted by AIR Worldwide Corporation, the bond’s third-party calculation agent, confirmed that Melissa’s central pressure and path, as reported by the National Hurricane Center, satisfied the conditions for a 100 percent payout. The World Bank catastrophe bond provides Jamaica with rapid access to funds once those pre-defined parameters are met, without requiring on-the-ground damage assessments.
Jamaica—one of the countries most exposed to natural disasters—has built a strong disaster risk financing framework to strengthen financial resilience. The country first secured World Bank catastrophe bond coverage in 2021 and renewed it three years later under the 2024 bond, continuing its strategy to transfer climate-related financial risks to international capital markets.
“Our thoughts are with the people of Jamaica as they recover and rebuild from this tragedy. Jamaica’s comprehensive disaster risk management strategy and proactive approach serve as a model for countries facing similar threats and seeking to strengthen their financial resilience to natural disasters,” said Jorge Familiar, World Bank Vice President and Treasurer. “The payout underscores the role of catastrophe bonds in effective risk management strategies and their efficiency in transferring disaster risks to capital markets.”
Catastrophe bonds—often called cat bonds—allow countries to transfer the financial risks of hurricanes, earthquakes, and other disasters to investors, who absorb the loss if a qualifying event occurs. These instruments are increasingly recognized by credit rating agencies as key tools that reduce fiscal stress and improve long-term resilience.
In addition to the $150 million payout, the World Bank Group is preparing a broad assistance package for Jamaica, which will include quick-disbursing emergency finance, the redeployment of project funds, and private-sector support through the International Finance Corporation (IFC).
“Jamaica’s strong commitment to preparedness is now paying off — enabling the country to move swiftly from recovery to reconstruction and use this moment not just to rebuild, but to leapfrog toward more resilient infrastructure,” said Susana Cordeiro Guerra, World Bank Vice President for Latin America and the Caribbean. “As Jamaica takes on this next phase, the World Bank Group stands with the Government and people to help rebuild stronger, restore livelihoods, and set a new benchmark for resilience across the Caribbean.”
The World Bank’s catastrophe insurance and bond programs are part of its Crisis Preparedness and Response toolkit, designed to give developing countries fast access to emergency funds, expanded insurance coverage, and the option to pause debt service payments after major disasters.
