Mexico IBRD catastrophe bonds (Otis, Polo) and FONDEN abolition
- The record does not name which of my species, waters, soils or forests were harmed.
Mexico buys storm protection through catastrophe bonds issued by the World Bank's IBRD. The bond paid part of the cover after Hurricane Otis in 2023 and paid nothing after Hurricane Polo in 2026.
Of USD 595 million total cover in 2024, per Insurance Insider ILS (May 2024).
Status As of September 2026: the Pacific tranche of the IBRD bond did not pay after Hurricane Polo; the Otis payout was reported as partial in 2023.
- Not stated in the sources reviewed — No source reviewed names who gained.
- Some municipalities — Would not receive funds for infrastructure repair, per El Financiero. El Financiero
What happened
Mexico's public disaster fund, FONDEN, was abolished in 2021. El Financiero reported in October 2023 that the catastrophe bond was no longer linked to it and that some municipalities would not receive funds for infrastructure repairs.
After Hurricane Otis in 2023, the Pacific tranche of Mexico's bond issued through the IBRD was partly triggered. Expansión reported in November 2023 that the Finance Ministry (Hacienda) expected about USD 60 million, and that the previous payout had taken about four months.
In 2024 Mexico secured USD 175 million of Pacific named-storm cover with an IBRD bond, within total 2024 cover of USD 595 million. Insurance Insider ILS reported a spread of 1,200 basis points to investors and a multiple of 2.9x.
In September 2026 Hurricane Polo made landfall in Baja California Sur. Artemis reported that its centre did not pass through any trigger zone and that the IBRD bond did not pay.
- 2021FONDEN, Mexico's public disaster fund, abolished
- 2023Hurricane Otis partly triggers the Pacific tranche; Hacienda expects about USD 60 million (Nov)
- 2024USD 175 million of Pacific named-storm cover secured within USD 595 million total (May)
- 2026Hurricane Polo makes landfall in Baja California Sur; bond does not pay (Sep)
How it looked
Shown
Recorded
- Otis: the Pacific tranche of the bond was partly triggered; Hacienda expected about USD 60 million; the previous payout took about four months.
- FONDEN was abolished in 2021; the bond is no longer linked to it; some municipalities will not receive funds for infrastructure repair.
- 2024 Pacific tranche: USD 175 million; investor spread 1,200 basis points; multiple 2.9x; total 2024 cover USD 595 million.
- Polo (2026): centre did not pass through any trigger zone; the bond did not pay.
Who gained
Reached nature or the ground
Gained elsewhere
Responses on record
- mexico-gov (November 2023): Hacienda estimated that about USD 60 million would arrive from the catastrophe bond after Otis. · Expansión
In court and with insurers
Lawsuits and rulings
Insurers
- 2023Partly paidIBRD catastrophe bond, Pacific tranche (investors) → Government of MexicoStated reason: Hurricane Otis partly triggered the tranche.
Expansión reported that the Treasury expected about USD 60 million after Otis and that the previous payout had taken about four months. Expansión
- 2026Claim refusedIBRD catastrophe bond, Pacific tranche (investors) → Government of MexicoStated reason: Parametric trigger not met: the centre of Hurricane Polo did not pass through any trigger zone.
Artemis reported that Polo made landfall in Baja California Sur and that the bond did not pay. Artemis
What nature saw
Nature's report opens this page. Below: further outcomes measured on the ground.
What we don't know
Nature
- Not measured Harm to nature: No independent ecological evaluation is on record.
Court
- None on record No court case on record.
Record
- None on record How much of the roughly USD 60 million expected after Otis was received and by whom it was spent: not stated in the sources reviewed.
- Unclear Whether municipalities left without FONDEN funds received repair money from another source: not stated in the sources reviewed.
- Insufficient Reported but not independently verified: the annual premium for the Pacific tranche, an expected loss of 4.09% for 2024–2028 and comparisons with other catastrophe bonds come from a secondary calculation and are not stated here as fact.
Did the harm stop?
Not on record.
Who paid?
Not on record in the sources reviewed; they say only that some municipalities would not receive funds for infrastructure repair.
Sources
Press and investigations
- Hacienda estima que llegarán 60 mdd por bono catastróficoExpansión · 2023-11-15
- Huracán Otis: ¿De cuánto es el bono catastrófico para la cobertura de desastres naturales?El Financiero · 2023-10-25
- Mexico secures 175mn of Pacific named storm coverage with IBRD bondInsurance Insider ILS · 2024-05
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