Resilience Bond - What is it and what can it do for your community?

A Resilience Bond is a new insurance instrument designed to help cashstrapped governments increase both physical protection and financial insurance against disasters.

These bonds link insurance coverage that public sector entities can already purchase (including parametric insurance policies and catastrophe bonds) with capital investments in resilience projects (such as, flood barriers and building retrofits) that reduce expected losses from disasters. *This connection between insurance and infrastructure is important, because just as life insurance doesn’t actually make you physically healthier, catastrophe bonds do not reduce physical risks and only payout when disasters strike. 

There are three main drivers for interested Resilience Bond sponsors: increased need for insurance coverage, demand for new resilience project finance, and growing concerns about a major peril. These are not mutually exclusive, but depending on which of these drivers is the primary motivation, a potential public-sector Resilience Bond sponsor will have different priorities for bond design. Because Resilience Bonds are one of the only financial instruments that link catastrophe insurance with project finance, they offer some unique opportunities for public sector leaders to meet multiple objectives with an integrated financial strategy.

Resilience Bonds can help public sector leaders take steps to both protect against future risks and invest in resilient economic development that will pay off in the future. To learn more - contact us, Kristin Carter - Owner, Grant Management Associates kcarter@grantmanagementassoc.com