Gov’t Renewing Jamaica’s Catastrophe Bond Coverage

The Government will be renewing Jamaica’s catastrophe bond coverage to provide financial protection against losses incurred from named storms for four Atlantic tropical cyclone seasons, ending in December 2027.

Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, made the disclosure during Tuesday’s (March 5) sitting of the Standing Finance Committee of the House of Representatives, whose members are reviewing the 2024/25 Estimates of Expenditure.

Jamaica, in 2021, became the first small country globally to independently sponsor a catastrophe bond that provided protection of up to US$185 million for three hurricane seasons – 2021, 2022 and 2023.

The Atlantic hurricane season runs from June 1 to November 30 each year.

“We intend to renew or enter into a new catastrophe bond that will cover us for four hurricane seasons – 2024, 2025, 2026 and 2027. I dare say that is something that we should do [continuously], just to make sure that we are not set back by such an occurrence,” Dr. Clarke said.

He noted that Jamaica is very vulnerable to natural disasters, which can have a deleterious impact on the country’s fiscal trajectory.

“We can’t avoid economic shocks. Most of them are outside of our control. They’re global in their sources and natural disasters are clearly outside of our control. But what we aim to do is to be in a position where we can bounce back, and bounce back quickly. Hence, we need to be in a position where fiscal resources become available in the event of a major natural disaster shock,” Dr. Clarke maintained.