What is a Resilience Bond?
A cat bond structure that links risk transfer to pre-event mitigation investments, combining insurance with climate resilience.
Resilience Bond
A cat bond structure that links risk transfer to pre-event mitigation investments, combining insurance with climate resilience.
How it works in practice
A coastal municipality sponsors a resilience bond tied to hurricane storm surge risk. Part of the annual premium savings, compared to traditional reinsurance, is directed into a fund that finances the construction of sea walls and wetland restoration. As the protective infrastructure is completed, the catastrophe model is updated to reflect the reduced risk, which lowers the premium at the next renewal cycle.
Related glossary entries
A
B
C
D
E
G
H
I
L
M
N
O
P
R
S
T
V
W
Z
Learn ILS properly with ILS101
Move from definitions into structures, pricing, triggers, reinsurance applications, and specialist risk topics.
Start Learning