World Bank To Payout One Of The Largest Single Sovereign Insurance Redemptions To Jamaica

News Americas, WASHINGTON, Fri. Nov. 7, 2025: Jamaica is set to receive a full $150 million payout under its World Bank backed catastrophe bond following the devastation caused by Hurricane Melissa – marking one of the largest single sovereign insurance redemptions in the Caribbean’s history.

The World Bank, (International Bank for Reconstruction and Development, IBRD AAA/Aaa) confirmed that the payout was automatically triggered after third-party analysis by AIR Worldwide Corporation determined that the hurricane met pre-agreed parametric thresholds based on the storm’s central pressure and path, as reported by the U.S. National Hurricane Center.

An aerial view shows destroyed buildings following the passage of Hurricane Melissa, in Black River, St. Elizabeth, Jamaica on October 29, 2025. (Photo by RICARDO MAKYN/AFP via Getty Images)

The trigger activated the full redemption of Jamaica’s 2024 catastrophe bond, which provides the country with pre-arranged financial protection against major natural disasters such as hurricanes and earthquakes.

Swift Financial Relief Through Innovative Risk Management

The $150 million disbursement underscores the strength of Jamaica’s disaster risk financing strategy, which has been recognized globally for its proactive approach. The country first partnered with the World Bank in 2021 to secure parametric insurance against storm events, later renewing and expanding coverage through a new 2024 catastrophe bond issuance.

“Jamaica’s comprehensive disaster risk management strategy and proactive approach serve as a model for countries facing similar threats,” said Jorge Familiar, World Bank Vice President and Treasurer. “This payout demonstrates how catastrophe bonds can efficiently transfer disaster risks to capital markets and ensure rapid liquidity when it’s needed most.”

Damage from Hurricane Melissa is seen at Sea Garden Beach resort, in Montego Bay, Jamaica on November 3,2025. Storm-ravaged communities in western Jamaica were facing dire straits November 2, 2025, days after record-setting Hurricane Melissa left towns demolished and at least 28 people dead across the island. (Photo by RICARDO MAKYN/AFP via Getty Images)

A Model For Financial Resilience

As one of the most disaster-exposed nations in the world, Jamaica has long championed innovative financial tools to strengthen its resilience. Catastrophe bonds allow governments to shift disaster-related risks from public budgets to global investors, ensuring that funds are available within days rather than months.

The World Bank Group said it is also preparing a broad support package for Jamaica, including emergency financing, reallocation of existing project funds, and targeted private-sector assistance 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,” said Susana Cordeiro Guerra, World Bank Vice President for Latin America and the Caribbean. “This is not just about rebuilding what was lost, but about leapfrogging toward a more resilient future.”

Wider Caribbean Support Framework

An aerial view seen October 29, 2025 shows the destroyed Black River Market and surrounding buildings following the passage the previous day of Hurricane Melissa in Black River, St. Elizabeth, Jamaica. (Photo by RICARDO MAKYN/AFP via Getty Images)

The catastrophe bond payout adds to the recent record-breaking US$70.8 million disbursement made to Jamaica by the Caribbean Catastrophe Risk Insurance Facility (CCRIF-SPC), the largest in the facility’s history. Combined, the two mechanisms have now mobilized over US$220 million in disaster insurance support for Jamaica in less than a month.

The Government of Jamaica has estimated that Hurricane Melissa caused between US$6 billion and US$9 billion in total damages, devastating infrastructure, homes, and livelihoods while claiming 32 lives. More than 600 educational institutions sustained damage during the passage of category-five Hurricane Melissa.“In the affected parishes, we have a little bit over 450 schools that have been affected, and that’s across the board – infant schools, primary schools, secondary schools and also eight tertiary schools. So far, we’ve seen estimates of 616 institutions having some kind of damage,” said Minister of Education, Skills, Youth and Information, Senator Dana Morris Dixon.