Mechanics are important here. Jamaica’s bonds feature a parametric, per-occurrence design that references central pressure and storm locations within a grid around the island, with AIR Worldwide serving as the calculation agent using data from the U.S. National Hurricane Center. This structure accelerates financing at the expense of basis risk trade-offs. Hurricane Beryl hit Jamaica a year ago but did not trigger the bonds because the pressure thresholds in the relevant grid cells did not breach – even though the government declared a disaster. In contrast, Melissa decisively cleared the way.
