Cat bond triggered

Information Minister Dr Dana Morris Dixon has confirmed that Jamaica’s catastrophe bond has been triggered following the devastation caused by Hurricane Melissa. The Government is expected to announce today whether there will be a full payout of US$150 million (J$24 billion) to aid recovery efforts.

The catastrophe bond, which covers the 2024–2027 hurricane seasons, is designed to release funds when specific weather parameters – such as central atmospheric pressure – indicate a major storm impact. Hurricane Melissa, a Category Five system, packed winds of 185mph when it made landfall near New Hope, Westmoreland, on Tuesday.

Former Finance Minister Dr Nigel Clarke, in a 2024 Gleaner column, described the bond as a mechanism that transfers catastrophic natural disaster risk from Jamaica to international investors. Jamaica’s instrument pioneered the “cat-in-a-grid” model, which overlays the island and surrounding waters with grids, each assigned an air-pressure threshold. If a storm passes through a grid and the pressure drops below that threshold, a payout is automatically triggered based on data from the US National Hurricane Centre.

Financial buffers

At a special press briefing at Jamaica House yesterday, Finance Minister Fayval Williams said the Government had implemented a comprehensive disaster risk financing framework to ensure quick access to funds in times of crisis.

She outlined several financial buffers available to the State, including a $5.3 billion Contingency Fund and a $1 billion National Natural Disaster Reserve Fund. In addition, Jamaica holds two insurance policies with the Caribbean Catastrophe Risk Insurance Facility (CCRIF), providing US$91.6 million in tropical cyclone coverage and US$37.3 million for excess rainfall. Williams said officials are reviewing data to determine whether those policies will also trigger payouts.

Meanwhile, regional and international partners have begun extending aid. Cayman Islands Premier Andre Ebanks, who arrived in Jamaica on one of the first post-storm flights, announced an initial donation of US$200,000 in essential supplies, with total assistance valued at US$1.2 million.

“We have had our own experience with Hurricane Ivan, and Jamaica was there for Cayman. So we pushed aside our usual state business and got on the first flight that we could to pledge our support,” Ebanks said.

Morris Dixon reported that pledges of support were also made by the United Kingdom, the European Union, the United States, and many countries across the Caribbean.

She said the Government, through Entertainment Minister Olivia Grange, is also mobilising support from the entertainment industry.

“Many other entities around the world have pledged their support, and we are so grateful to all of them,” Morris Dixon said.

As recovery continues, Dixon confirmed that the death toll from Hurricane Melissa has risen to 19 – with eight bodies recovered in St Elizabeth, two in St James, including a child, and nine in Westmoreland.

Search and rescue teams are still trying to reach areas in the hardest hit communities in eastern Westmoreland and Hanover.

edmond.campbell@gleanerjm.com