The World Bank has announced that Jamaica will receive a full payout of $150 million under its catastrophe insurance coverage following the devastation caused by Hurricane Melissa. The payment was triggered after the storm met pre-agreed parametric conditions based on its central pressure and path, as determined by independent analysis.
The assessment, conducted by third-party calculation agent AIR Worldwide Corporation, confirmed that Hurricane Melissa reached the thresholds necessary for a 100% payout of Jamaica’s catastrophe bond, issued by the World Bank (International Bank for Reconstruction and Development, IBRD) in 2024. The bond provides Jamaica with financial protection against specified natural disasters, including hurricanes and earthquakes.
“As one of the most exposed countries to natural disasters, Jamaica has a well-developed disaster risk financing strategy,” the World Bank noted. The country first secured coverage against named storms through a World Bank-issued catastrophe bond in 2021, later renewing it in 2024 to strengthen its financial resilience.
“Our thoughts are with the people of Jamaica as they recover and rebuild from this tragedy,” said Jorge Familiar, World Bank Vice President and Treasurer. “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. The payout underscores the role of catastrophe bonds in effective risk management strategies and their efficiency in transferring disaster risks to capital markets.”
The World Bank said the payout will be accompanied by a broader support package that includes quick-disbursing emergency finance, the redeployment of existing project funds, and targeted private-sector assistance through the International Finance Corporation (IFC), its private sector arm.
“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.”
Catastrophe insurance backed by catastrophe bonds is a key part of the World Bank’s Crisis Preparedness and Response toolkit, which offers developing countries rapid financial assistance following disasters. The toolkit provides fast access to emergency funds, expanded insurance coverage, and the option to pause debt service payments after a major natural disaster.
