UPDATE: In the cat bond recitation after the jump I implied that there were bonds extant. I forgot that because of the awful performance of the pandemic bonds and their administration the World Bank canceled the planned second issuance of bonds. My bad. Regret the error. Rest is fine, etc.
Following on May 16's "Democratic Republic of Congo declares Ebola outbreak; 65 people killed".
From the Associated Press, May 17:
WHO declares global health emergency over Ebola outbreak in Congo and Uganda
The World Health Organization declared the Ebola disease outbreak caused by a rare virus in Congo and neighboring Uganda a public health emergency of international concern on Sunday, after more than 300 suspected cases and 88 deaths.
WHO said the outbreak doesn’t meet the criteria of a pandemic emergency like COVID-19, and advised against the closure of international borders.
WHO said on X that a laboratory-confirmed case has also been reported in Congo’s capital, Kinshasa, which is about 1,000 kilometers (620 miles) from the outbreak’s epicenter in the eastern province of Ituri, suggesting a possible wider spread. It said the patient had visited Ituri and that other suspected cases have also been reported in North Kivu province, which is one of Congo’s most populous and borders Ituri.
On Sunday, the rebel government of Goma, eastern Congo’s largest city, said in a statement that the first confirmed case of Ebola was detected in the city. The infected person traveled from Ituri province and was currently under isolation, the statement said. Goma was the site of a rapid rebel offensive in early 2025, and the conflict between the Congolese armed forces and the Rwanda-backed M23 rebel paramilitary group has displaced hundreds of thousands....
....MUCH MORE
Now up to 88 deaths reported and it's crossed a border. That may be close to a parametric trigger for a cat bond payout.
Of course, if 2018/2019 is any example, the insurers are very reluctant to disburse the money.
November 2018 - Congo's Ebola Crisis May Trigger World Bank's Catastrophe Bond
December 2018 - Catastrophe Bonds: "Ebola deaths pass pandemic cat bond trigger, but no payout till it spreads"
February 2019 - DR Congo Ebola Cases Pass 800; Deaths Over 500; No Cat Bond Trigger Yet
June 2019 - UPDATED—Insurance: Ebola Crosses Border to Uganda, Should Trigger Cat Bond Payout
We've been following the World Bank's Pandemic Emergency Facility for the last couple years and have pointed out the $320 million July 2017 Cat bond issue has two triggers: 1) a minimum 250 victims and 2) the crossing of an international border.
The current epidemic in DR Congo passed the victim threshold when the World Health Organisation reported 296 deaths in December 2018 (current counts over 2000 cases, over 1300 deaths....July 2019 - WHO Declares Ebola a GLOBAL Health Emergency
February 2020 - World Bank Pandemic Catastrophe Bond Under Pressure As Coronavirus Spreads
I have become convinced these things were designed to NOT pay.Related June 2025:
As noted previously:
Reinsurance: "No coronavirus price response from World Bank’s pandemic cat bond yet"
We saw with Ebola that, even after both triggers—1) a minimum 250 victims and 2) the crossing of an international border—were reached, the World Bank's Pandemic Emergency Facility was very reluctant to declare the payout, eliciting some snark from yours truly:
"And if the cross-border contagion is reported on a day ending in a 'Y' all contracts will be null-and-void and coverage denied."
"Hedge fund strategy built on catastrophes taps a hot new trend"
Parametrics can result is some odd-looking payouts and are susceptible to gaming by those offering the product. More after the jump...
