Jamaica to get $150 million from “catastrophe” bond

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  It's official.

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  Jamaica's catastrophe bond is paying out in full.

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  It's world business expressed from the BBC World Service.

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  I'm Liana Byrne.

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  Elon Musk just secured a trillion dollar pay offer from Tesla.

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  We meet a US tax lawyer who's now running at hot dog stand during the government shutdown.

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  Today,

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  the World Bank has confirmed that Jamaica will receive a full $150 million payout from its catastrophe bond that's the maximum amount possible after Hurricane Melissa met the pre-agreed trigger conditions.

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  It's the first time Jamaica's insurance sales bond has played out in full and the money should reach the government within days.

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  A catastrophe bond or a cap bond is essentially an insurance policy funded by investors.

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  Countries like Jamaica pay interest to investors each year and

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  if a disaster severe as a category five hurricane hits,

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  those investors lose some or all of their money and the funds go straight to the government for recovery.

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  In an exclusive interview, Jorge Familiar, the World Bank's vice president and treasurer,

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  told me the financial markets will play more of a role in disaster relief.

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  When you think about disaster risk management from a financial point of view,

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  countries that are well prepared,

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  and that is the case of Jamaica,

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  have different layers of protection to cover different types of risk.

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  Catastrophic bonds usually are at the very top of the pyramid,

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