Melissa is the worst hurricane this year and the first Category 5 storm on record to make landfall in Jamaica. It has now hit Cuba as an “extremely dangerous storm.” Though it will take days to know the full extent of damage, early reports already show flooding, landslides and chaos.
Melissa is almost certain to trigger a full payout from Jamaica’s catastrophe bond, showing that capital markets can help provide valuable financial backing when disaster strikes. Today’s newsletter offers some insight and context on the workings of the cat bond market, and shows how a niche investment product is playing an ever larger role in addressing the cost of climate change.