Catastrophe Bond Investors Dodge Losses After Beryl Hits Jamaica.

Investors in Jamaica's catastrophe bond, which was intended to cover the costs of natural disasters, will not be affected by the damage caused by Hurricane Beryl. The bond, arranged by the World Bank, has specific terms that shield investors from financial losses. While this is fortunate for investors, it poses a challenge for Jamaica as it now has to clean up after the hurricane. Catastrophe bonds allow issuers to transfer risk to capital markets, and Jamaica became the first small island state to independently sponsor a cat bond in 2021. The bond was renewed in April for $150 million in insurance cover for named storms. [Extracted from the article]