No impact to Mexico cat bond expected from Hurricane Erick: Twelve Securis

By Henry Gale

June 20 - (The Insurer) - Hurricane Erick is not expected to have triggered any payout on the government of Mexico's parametric catastrophe bond, ILS investment manager Twelve Securis said in a LinkedIn post.

Hurricane Erick made landfall as a category three hurricane on Mexico's Pacific coast on Thursday morning. Reuters reported damage to roads, boats and buildings.

The World Bank issued a parametric catastrophe bond for Mexico in 2024 covering $175 million of Pacific hurricane risks, after it separately secured protection against Atlantic hurricane and earthquake risks in a separate bond.

Icosa Investments had said ahead of the storm's landfall that a payout on the bond was "within the realms of possibility as the latest reported pressure is only marginally above the payout threshold".

However, later updates from the National Hurricane Center recorded higher minimum central pressure figures for Erick, suggesting the trigger would not be met.

"Based on the latest pressure estimates from the designated reporting agent, we do not expect any impact to this bond," Twelve Securis said in a LinkedIn post on Friday.

The investment manager added that it did not expect the hurricane to affect any private ILS positions it manages.