Insurance Authority welcomes World Bank’s second issuance and listing of catastrophe bond in Hong Kong

Insurance Authority welcomes World Bank's second issuance and listing of catastrophe bond in Hong Kong

6 May 2024

The Insurance Authority (IA) today (6 May 2024) welcomed the issuance and listing of a catastrophe bond at an amount of US$150 million (equivalent to about HK$1.17 billion) in Hong Kong by the International Bank for Reconstruction and Development of the World Bank Group, offering protection against storm risks in Jamaica over the next four hurricane seasons.

"The citizens in Hong Kong are no stranger to the devasting impact of tropical cyclones. This issuance of insurance-linked securities (ILS) shows clearly that we care for and are willing to support economies in mitigating the risks arising from natural disasters," said Mr Clement Cheung, Chief Executive Officer of the IA. "Going forward, we will dedicate efforts to forging an ecosystem that nourishes institutional investors, data modelling capabilities and professional talents," he added.

"We are pleased to support the Government of Jamaica in their financial preparation for responding to future hurricane events. This catastrophe bond serves as another example of how developing countries can mitigate disruptive economic impacts brought by natural disasters," said Mr Jorge Familiar, Vice President and Treasurer of the World Bank. "We are proud to have partnered with the IA on this transaction and in further developing the ILS market for our clients."

The five ILS issuances that took place in Hong Kong since the bespoke regulatory regime and pilot grant scheme were introduced in 2021 involve a total sum of US$713 million (equivalent to about HK$5.59 billion).

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