Jamaica’s World Bank catastrophe bond could upsize to $185m

The first catastrophe bond for Jamaica, which as we were first to report ten days ago launched as a $175 million IBRD CAR 130 transaction with the support of the World Bank, is now said by our sources to have a chance of closing a little larger, at $185 million in size.

The $175 million or greater catastrophe bond seeks a capital markets backed source of named tropical storm and hurricane disaster insurance protection for the government of Jamaica, on a parametric trigger basis.

As we’d also reported recently, important grant agreements had been signed and as a result the first catastrophe bond for Jamaica was expected imminently.

That proved correct, when our sources told us the deal had been launched to investors ten days ago and we reported on the structure being offered and the protection it will afford to Jamaica’s government.

FULL ORIGINAL PUBLICATION HERE

China’s government supportive of Hong Kong’s ILS strategy: ILS Asia 2021

As options to issue insurance-linked securities (ILS) and catastrophe bonds expand in Asia, with the introduction of Hong Kong as a regulated ILS platform, attendees at our virtual ILS Asia 2021 conference this morning heard of the support China’s government is offering to the initiative.

Our virtual ILS Asia 2021 conference, held in association with headline sponsor AM RE Syndicate Inc., began today with a keynote interview with Mr. Simon Lam, Executive Director, General Business at the Hong Kong Insurance Authority.

This interview can now be viewed on-demand here.

Hong Kong already has an established insurance and reinsurance market, while its legislative preparations for ILS were completed at the beginning of 2021.

FULL ORIGINAL PUBLICATION HERE

UZBEKISTAN: UNDP helps develop the insurance sector in Uzbekistan

UNDP, together with the Agency for the Insurance Market Development at the Uzbek Ministry of Finance, organized a seminar on June 24, 2021, during which the results of the diagnostics of the development of inclusive insurance and risk financing in Uzbekistan were presented, UzDaily.uz reports.

It was noted that due to the vulnerability of Uzbekistan to natural disasters, which can bring devastating consequences for the economy and the population, as well as the insufficient development of the insurance market and the lack of tools for inclusive insurance and risk financing, the government, enterprises, and households of the country suffer financial losses amounting to millions of USD.

UNDP established a special Risk Insurance and Financing Fund (Mechanism) to provide technical assistance to countries participating in the climate risk insurance program, including Uzbekistan, to develop inclusive insurance, financing sovereign risks, and integrate insurance into development planning and financing processes. At the first stage, the task was set to diagnose the insurance industry in the country, and the results of this study, as well as the recommendations of experts on the development of this sector, were discussed during the seminar.

FULL PUBLICATION HERE

Kazakhstan: Almaty nonchalant over earthquake fears

As Kazakhstan awaits the Big One, its seismologists are underfunded while ever-taller buildings rise in the earthquake-prone commercial capital.

Nur-Sultan may be cold and windy, but at least earthquakes aren’t a concern.

That was Andrei Krasilnikov’s thought when he moved to the capital from Kazakhstan’s mountain-fringed business metropolis, Almaty.

“It was a shame to have to leave our hometown. We have beautiful mountains there, which we don’t have here,” Krasilnikov, an activist opposed to the rapid spread of high-rise construction, told Eurasianet. “But Almaty is in a seismic zone, and I want to live in peace and not have to worry about my family.”

By way of an example, Krasilnikov points to a recently unveiled project to build several dozen 17-story apartment blocks in a tightly packed residential area of Almaty.

“These kinds of ghettos will become a mass grave if there is a powerful earthquake, since rescue equipment will not even be able to drive up through the rubble,” the activist said.

The fears are not without basis. Almaty is in a seismically active region. Mild tremors are fairly common. And seismologists are predicting that a powerful tremor could occur within the coming decade.

FULL ORIGINAL PUBLICATION HERE

Jamaica catastrophe bond grant agreements signed, deal imminent

The project to issue a first catastrophe bond to benefit Jamaica has made further progress this month, with an important grant approval now received and the World Bank facilitated cat bond deal launch now imminent.

Of course, any regular Artemis readers will know that this World Bank project to issue a sovereign catastrophe bond for Jamaica has been underway for a number of years.

In fact, we first wrote about formalised work that had begun between the World Bank and the Jamaican government on a possible catastrophe bond issuance almost three years ago.

FULL ORIGINAL PUBLICATION HERE

Greater Bay Re registered for China Re cat bond in Hong Kong

We’ve learned that the first company destined to be an insurance-linked securities (ILS) special purpose vehicle has already been registered in Hong Kong, with Greater Bay Re Limited established to issue a catastrophe bond on behalf of China Re, sources told us.

It’s an important sign of the state of readiness of Hong Kong’s legislative and regulatory framework for insurance-linked securities (ILS), showing that the Special Administrative Region is now ready for ILS activity and to become a domicile for catastrophe bonds.

The sponsor is also particularly noteworthy, as we’re told it will be China Property and Casualty Reinsurance Company Ltd. (China Re P&C), part of China Reinsurance Corporation, one of the largest insurance and reinsurance companies in China, but also with a global footprint thanks to operations in Lloyd’s of London and Singapore, as well as offices in Hong Kong and New York.

FULL ORIGINAL PUBLICATION HERE

Weather disasters displace more people than any other factor globally in 2020

A new report shows that weather related disasters were the primary driver of displaced people in 2020, with almost three-quarters of people internally displaced affected by weather, with storms and flooding the primary peril drivers of this.

In 2020 alone, some 40.5 million people were internally displaced within their own countries, with conflict and violence the cause of just over one-quarter and weather the rest.

Geophysical natural disasters were also a cause of displacement, with 655,000 people internally displaced by earthquakes and volcanic eruptions during the year.

FULL ORIGINAL PUBLICATION HERE

World Bank climate change plan highlights cat bonds & risk transfer

This week, the World Bank Group announced its new Climate Change Action Plan, with a range of commitments to ramp up and deliver record levels of climate finance, while catastrophe bonds, disaster risk financing and insurance against climate risk are also mentioned

Through its new Climate Change Action Plan, the World Bank is targeting the delivery of record levels of climate financing to developing countries.

At the same time the World Bank aims to work to reduce emissions, strengthen adaptation and align financial flows within the work it does with the goals of the Paris Agreement on climate change.

FULL ORIGINAL PUBLICATION HERE

Global insurance protection gap hit $1.4 trillion high in 2020: Swiss Re

The global insurance protection gap, or the gap between economic losses and those that are insured, widened in 2020 as pandemic related effects drove global macroeconomic resilience to decline by 18%, according to a measure by reinsurance firm Swiss Re.

Swiss Re Institute has published its Resilience Index, which shows that the COVID-19 pandemic reduced global macroeconomic resilience by close to a fifth in 2020.

Global economic growth is expected to recover strongly in 2021, after the pandemic-induced recession in 2020, thee reinsurance firm said, which it expects will help to build macroeconomic resilience again.

However, Swiss Re warns that “there will not be a return to pre-COVID-19 levels of resilience in 2021.”

FULL ORIGINAL PUBLICATION HERE

The only asset class that helps people rebuild after natural disasters

A core reason that insurance-linked securities (ILS), such as catastrophe bonds and other reinsurance linked investments, are considered as socially responsible investments by many allocators is the fact they deploy their capital into natural disaster recovery and rebuilding.

While ESG, environment, social and governance factors, are now seen as becoming critical for insurance-linked securities (ILS) strategies future popularity, the truth is that at least the S (social) aspect of ESG has been firmly embedded in the majority of ILS right from the start.

We first wrote about the importance of ESG for the catastrophe bond and broader ILS market back in 2009, when for the first time we learned of a pension fund citing ESG as an important criteria for its consideration of investing in a cat bond fund.

FULL ORIGINAL PUBLICATION HERE