resilient bond

A resilient bond, also referred to as a resilience bond, is a financing instrument that links catastrophe bond risk transfer with funding for projects that reduce disaster risk. It allows governments, utilities, insurers, or other sponsors to transfer defined catastrophe exposure to investors. It does so by using savings from reduced expected losses to help finance infrastructure or mitigation projects. This is referred to as a resilience rebate. The principal is encouraging investment in resilience while providing financial protection for other remaining catastrophic exposure. Examples include seawalls, flood barriers, retrofits, and other safety measures.