Hong Kong Exchanges and Clearing (HKEX) has listed its first ever catastrophe bond, a US$350 million issuance by the World Bank. The bond offers protection against losses related to earthquake risks in Chile over the next three years. It is part of a US$630 million aggregate earthquake risk coverage transaction for Chile that also includes US$280 million of catastrophe swaps, the World Bank said in a statement. The Hong Kong government has previously committed to supporting the insurance sector in offering a greater variety of products and solutions to assist market participants in managing the risks of catastrophic events caused by climate change. The catastrophe bond is supported by the Hong Kong Insurance Authority, which administers a grant scheme established in 2021 to encourage the development of the insurance-linked securities market in Hong Kong. HKEX CEO Nicolas Aguzin welcomed the listing, saying that it reflects Hong Kong’s growing attractiveness as a platform for international issuers looking to access the region’s deep and diverse funding pool. “This is also a particularly celebratory first, as the catastrophe bond helps to bring impactful change to communities by helping them better prepare for adversities brought about by natural disasters,” he said.
The $350mn catastrophe bond offers protection against losses related to earthquake risks in Chile over the next three years. @HKEXGroup https://t.co/Fgwt3sSaHq
— Regulation Asia (@RegulationAsia) April 4, 2023