RE.BOUND PROGRAM

ABOUT

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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 to learn more about how Resilience Bonds can help communities bridge the gap between infrastructure and insurance.

LEVERAGING CATASTROPHE BONDS AS A MECHANISM FOR RESILIENT INFRASTRUCTURE PROJECT FINANCE →
PHASE 2 REPORT COMING IN FALL 2017 →

MEDIA HIGHLIGHTS

“Cat bonds can be powerful tools to encourage risk mitigation efforts, facilitate rebuilding after a disaster and create a more resilient society. We are excited to work with RE.bound to extend their use into new areas.” — Ben Brookes, Vice President, Capital Markets at RMS.

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