Hurricane Melissa Triggers $150 Million World Bank Cat Bond for Jamaica
The Government of Jamaica will receive a payout of $150 million from its catastrophe insurance program, supported by a World Bank catastrophe bond. This follows the widespread devastation caused by Hurricane Melissa.
Hurricane Melissa, the thirteenth named storm and fourth major hurricane of the 2025 North Atlantic season, marked Jamaica’s first Category 5 hurricane landfall since records began in 1851.
Jamaica, among the countries most vulnerable to natural disasters, has developed a comprehensive disaster risk financing strategy. The parametric bond, first issued in 2021 and renewed in 2024 by the World Bank’s International Bank for Reconstruction and Development (IBRD, AAA/Aaa), provides financial coverage against certain catastrophic events.
A third-party assessment by AIR Worldwide Corporation confirmed that Melissa’s strength and track met the parameters required for a full payout.
Catastrophe bonds like this one help shift the financial burden of natural disasters to the global capital markets, offering countries timely support after major events such as hurricanes and earthquakes.
Author’s Summary
After Hurricane Melissa struck as Jamaica’s first Category 5 landfall, the nation secured a full $150 million payout from a World Bank catastrophe bond.