World Bank Launches US$200 Million Hurricane Cat Bond for Jamaica

The World Bank has closed pricing on a catastrophe bond that backs US$200 million in hurricane insurance for Jamaica. The arrangement supersedes earlier cat bonds that carried US$150 million in cover, funds that flowed to the island after Hurricane Melissa struck in October of last year.

The bank put out a press release on the pricing yesterday. Market interest ran ahead of supply, giving the deal room to grow beyond the amount first sought.

The issue draws on two prior World Bank catastrophe bonds for Jamaica, issued in 2021 and in 2024. The three-year 2024 bond paid out in full when Hurricane Melissa arrived in 2025. Pre-set parametric tests tied to the storm’s track and strength were satisfied, showing how the tool can move money quickly after a major hit.

For Jamaica, the bond and its linked risk-transfer pact sit inside a wider disaster-risk financing plan. Officials use the stack to soften the budget blow from severe hurricanes and to reach cash soon after extreme weather.

The instrument sets aside funding ahead of time for rare but heavy hurricane seasons. It works alongside budget reserves, contingent credit lines, and other insurance.

The notes were sold through the International Bank for Reconstruction and Development’s “capital at risk” programme, which lets member states pass disaster exposure to global investors. In the setup, the World Bank sells the bond and signs a risk-transfer deal with the Jamaican Government, which pays a premium set by the terms won in the capital markets.