Jamaica's Catastrophe Bond Poised For Big Payout Within Weeks After Hurricane Melissa's Insane Strength

Hurricane Melissa, the strongest storm to hit Jamaica in over 170 years, caused widespread destruction with 185 mph winds. Jamaica's $150 million catastrophe bond, structured by Aon, may be triggered due to the storm's intensity. The bond requires a central pressure below 900 millibars, which early data suggests Melissa met upon landfall. If triggered, Jamaica could receive funds within a month, much faster than traditional insurance. Jamaica is the first Caribbean island to use a catastrophe bond for disaster relief. While verification is pending, Aon believes the bond is functioning as intended to provide rapid funding. The storm heavily damaged Montego Bay, Black River, and surrounding areas, impacting buildings and infrastructure. Power outages affect a majority of customers, and many communities are isolated. At least 19 people died, with economic losses estimated at $8 billion, a significant portion of Jamaica's GDP. The cat bond's potential payout could encourage other Caribbean nations to explore similar risk transfer mechanisms.