Global lenders line up $6.1bn recovery package for Jamaica
Reinsurance companies, many of them operating from or through Bermuda, are likely to absorb most of the multibillion-dollar bill for insured Jamaica relief because of the heavy reliance on reinsurance support by Caribbean carriers.
This was the observation of analysts at AM Best, who also noted that the insured losses in Jamaica are expected to be low, owing to limited insurance penetration.
The agency said catastrophic perils such as hurricanes remain the greatest threat to property insurers in the region, making reinsurance partnerships “the cornerstone” of Caribbean capacity.
International financial institutions have pledged up to $6.1 billion to support Jamaica’s recovery after Hurricane Melissa, in what officials described as an unprecedented, co-ordinated response to a Caribbean disaster.
The package — assembled at the request of Andrew Holness, the Prime Minister of Jamaica — brings together CAF-Development Bank of Latin America and the Caribbean, the Caribbean Development Bank, the Inter-American Development Bank, the International Monetary Fund and the World Bank Group. It combines emergency liquidity, sovereign financing, technical support and private-sector mobilisation over the next three years.
Jamaica’s disaster-risk financing system triggered an immediate $662 million in liquidity, including $91 million from CCRIF, $150 million from a World Bank catastrophe bond, $300 million under the IDB’s contingent credit line and funding from the Government’s own reserves. Damages from the storm are estimated at $8.8 billion.
To meet longer-term reconstruction needs, the lenders said as much as $3.6 billion could be made available for government-led recovery projects. That includes up to $1 billion each from CAF, the IDB and the World Bank, $200 million from the CDB, and up to $415 million from the IMF through its large natural-disaster window.
The institutions have also provided $12 million in grants for technical assistance and policy support, with more grant funding expected.
Alongside public financing, the IDB Group and the World Bank Group — through the International Finance Corporation and Multilateral Investment Guarantee Agency — are moving to mobilise roughly $1.9 billion in private investment for resilient infrastructure and reconstruction.
In a joint statement, the organisations said the goal is not only to restore damaged assets, but to “build forward better” and strengthen Jamaica’s ability to withstand future climate shocks.
A new parametric microinsurance product aimed at protecting the most vulnerable workers in the Caribbean and surrounding regions has been launched this week, as communities continue to recover from Hurricane Melissa.
The Livelihood Protection Policy is designed for low-income groups such as small farmers, fisherfolk, market vendors, day labourers and seasonal tourism workers — many of whom were left without income or assets after storms.
The product offers fast cash payouts within 14 days of extreme rainfall or wind events, allowing households to replant crops, repair equipment and restart small businesses without waiting for traditional claims assessments.
First piloted under the Climate Risk Adaptation and Insurance in the Caribbean project, the LPP has been tested and refined across five countries since 2011.
In Jamaica, it will be sold through Guardian General Insurance Jamaica Ltd, with distribution supported by credit unions and co-operatives. The policy is expected to expand to Belize, Grenada and Saint Lucia in 2026.
CCRIF chief executive Isaac Anthony stated: “Too often, the backbone of our economy — the low-income farmers, fishers, vendors, micro-entrepreneurs — are least able to recover after a disaster. Our promise to you in this journey is: ‘We are here to provide the technical guidelines, training and support you need to make this a success’.”
The LPP was also lauded for its rapid-response mechanism; as Heather Timothy, CCRIF project co-ordinator, clarified: “If the trigger is met, payouts are automatic within days.”
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