DFID & Global Parametrics to support Red Cross volcano cat bond
By Matt Sheehan
The UK Government’s Department for International Development (DFID) and Global Parametrics have agreed in principal to support the world’s first pure-volcano catastrophe bond, launched by the Danish Red Cross.
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By issuing a privately placed catastrophe bond, the Danish Red Cross, with support from the British Red Cross, is aiming to tap into investor appetites for insurance-linked securities (ILS) to secure contingent financing to support its work around the world.
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“Cat bonds are steadily proving their position as alternative investment strategies and an innovation such as the new volcano catastrophe bond will not only support asset class diversification, but enable investors to demonstrate their commitment to ESG-led investments by supporting the resilience of communities that are vulnerable to the effects of volcanic eruptions,” said Hector Ibarra, CEO of Global Parametrics and the Portfolio Manager of the NDF.
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“With this cat bond, we’ve leveraged the funding attributes of insurance with the benefits of early action protocols – the world’s first blended cat bond,” [said Adam Bornstein, Global Innovative Finance Delegate for Danish Red Cross.]
Finally, Rachel Turner, Director Economic Development at DFID, said: “This is an innovative programme that takes a huge step in the shift to preparedness which is vital to building resilient communities.
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