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Catastrophe bonds continue to gain traction as a potential capital structure for delivering post-disaster financing or funding for international humanitarian and development organisations, with the United Nations agency UNICEF among the latest to explore insurance-linked securities (ILS).
Forward-looking agencies and humanitarian organisations are exploring the cat bond as a way to deliver new sources of funding linked to climate and disaster related experience, in the hope of closing existing funding gaps and also identifying ways to disburse capital much more rapidly after humanitarian crises occur.
Often reliant on donor funding and cash from parent organisations, humanitarian and international development organisations have struggled in the past to get the capital into disaster zones quickly enough. It’s thought that the faster the cash can be distributed to people, governments and non-governmental organisations on the ground, the greater its impact can be.