Hong Kong points new cat bond for Jamaica storm dangers

The Hong Kong Insurance coverage Authority (HKIA) has introduced the issuance and itemizing of a $150 million disaster bond in Hong Kong, aimed toward offering safety in opposition to storm dangers in Jamaica for the upcoming 4 hurricane seasons.

This disaster bond, issued by the Worldwide Financial institution for Reconstruction and Growth (IBRD), a part of the World Financial institution Group, is a part of efforts to bolster Jamaica’s monetary resilience in opposition to potential hurricane injury.

Jorge Acquainted, vice chairman and treasurer on the World Financial institution, highlighted the importance of this monetary instrument.

“This disaster bond serves as one other instance of how creating international locations can mitigate disruptive financial impacts introduced by pure disasters,” Acquainted stated.

He additional expressed satisfaction within the partnership with the HKIA to boost the insurance-linked securities (ILS) marketplace for their shoppers.

Clement Cheung, CEO of the HKIA, additionally commented on the broader implications of this new disaster bond.

“This issuance of insurance-linked securities reveals clearly that we look after and are keen to help economies in mitigating the dangers arising from pure disasters,” Cheung stated. “Going ahead, we’ll dedicate efforts to forging an ecosystem that nourishes institutional traders, information modeling capabilities, {and professional} expertise.”

Because the introduction of a bespoke regulatory regime and a pilot grant scheme in 2021, there have been 5 ILS issuances in Hong Kong, totaling $713 million, in accordance with HKIA.

Moreover, in 2023, Hong Kong facilitated its fourth ILS issuance and its first public itemizing, with the IBRD issuing a $350 million disaster bond. This bond, listed on Hong Kong’s inventory change, is designed to cowl earthquake dangers in Chile for the following three years, offering monetary safety in opposition to potential earthquake-induced losses.

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