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How Catastrophe Bonds Can and Cannot Assist Jamaica After Hurricane Melissa

Hurricane Melissa has made history as the most severe hurricane of the year and is notable for being the first Category 5 storm to strike Jamaica. The storm has since progressed to Cuba, where it is being classified as an «extremely dangerous storm.» Although it will take some time to assess the total damage caused by Melissa, initial reports indicate significant flooding, landslides, and widespread disruption across affected areas.

In the wake of such catastrophic events, catastrophe bonds emerge as a potential financial tool to aid recovery efforts. These bonds are designed to provide quick funding to governments and organizations in the aftermath of natural disasters, allowing for immediate response and rebuilding efforts. However, while catastrophe bonds can offer substantial benefits, they also come with limitations that need to be carefully considered.

This article explores the role of catastrophe bonds in Jamaica’s recovery from Hurricane Melissa, examining both their advantages and drawbacks in the context of the ongoing crisis.

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Source: Original