ABOUT
CITIES ACROSS THE UNITED STATES AND AROUND THE WORLD ARE FACING INCREASINGLY FREQUENT SEVERE WEATHER EVENTS.
Many local governments and public utilities are overexposed and underinsured for these risks. They are also coping with aging and failing infrastructure systems that increase the potential for catastrophic losses.
RE.bound is an innovative finance program designed by re:focus and launched in April 2015 in collaboration with Goldman Sachs, RMS, and Swiss Re with the generous support of the Rockefeller Foundation to help communities around the world better protect themselves against the physical and financial risks of disaster. The aim of the program is to create a new type of insurance product called a Resilience Bond that systematically links existing Catastrophe Bonds with traditional project finance to support the implementation of large-scale resilient infrastructure projects. Similar to a life insurance policy that includes a reduction in premiums for interventions that reduce overall risk, like quitting smoking or exercising regularly, a Resilience Bond applies the insurance mechanism of a Catastrophe Bond for a city or public utility, and generates savings in the form of a rebate that can apply to projects, like seawalls or flood barriers, that reduce economic losses from disasters.
PARTNERS
Through RE.bound, a team of private sector leaders is taking steps to design a new catastrophe bond-like product that can promote project-based risk reduction solutions. These new types of instruments would realize the potential insurance benefits from infrastructure improvements and monetize the physical and financial risk reductions associated with investments in resilient systems.
“At The Rockefeller Foundation we recognize that in order to solve today’s challenges, communities need innovative tools, such as these new bonds, that have the potential to transform how they think and operate through a resilience lens,”
“RE.bound will use the expertise of leaders in investment banking, reinsurance, infrastructure, and climate risk analysis. We are confident that well-structured risk transfer mechanisms can both help communities recover more quickly from severe shocks and make them more resilient ahead of potential disasters.”
Judith Rodin
President of The Rockefeller Foundation
“Goldman Sachs has been involved in structuring catastrophe bond transactions for a variety of clients to provide efficient risk reduction,”
“This program would use catastrophe bond technology to ultimately reduce site-specific insurance costs and promote investments in resiliency measures. We are proud to be collaborating on the program to explore this innovative direction.”
Ali Al-Ali
Managing Director and Co-Head of Insurance Structured Finance at Goldman Sachs
REPORTS
Resilient infrastructure finance is complex. The benefits of projects, like seawalls and green flood management systems, are often diffuse and realized far into the future. Read our RE.bound reports below to learn more about how Resilience Bonds can help communities bridge the gap between infrastructure and insurance, and explore our Sponsorship Flowchart to see if a Resilience Bond is a good fit for your needs.
Resilience Bonds: a business-model for resilient infrastructure
When natural disasters occur, governments are often considered as “insurers [...]
Houston Eyes Designer Bonds to Pay for $15 Billion Ike Dike
A massive dike to hold back storm-driven floods surging in [...]
How the Insurance Industry Can Push Us to Prepare for Climate Change
Climate change risk is rising, and yet behavioral economics research [...]
Rewarding Resilience
A new bond framework can provide dividends for completing infrastructure [...]
Resilience Bonds: a business-model for resilient infrastructure
When natural disasters occur, governments are often considered as “insurers [...]
Houston Eyes Designer Bonds to Pay for $15 Billion Ike Dike
A massive dike to hold back storm-driven floods surging in [...]
How the Insurance Industry Can Push Us to Prepare for Climate Change
Climate change risk is rising, and yet behavioral economics research [...]
Rewarding Resilience
A new bond framework can provide dividends for completing infrastructure [...]