The provision is part of a larger, historic $1.36 billion USD bond that covers seismic risk for all four of the Pacific Alliance nations. While the bond includes certain triggers about the exact magnitude and location of the earthquake, Chile is also covered for some $500 million USD, Mexico for $260 million USD, and Peru for $200 million USD.

“Each class has different terms and all are designed to cover earthquake risks,” stated the World Bank. “The triggers are parametric and depend on data provided by the US Geological Survey. The classes for Chile, Colombia and Peru will provide coverage for three years. The classes for Mexico will provide coverage for two years.”

The nation’s finance minister, Mauricio Cárdenas, said in a statement that, in Colombia, the bond’s catastrophic earthquake risk exposure “covers the regions of the country where 96% of the population lives.”

According to the World Bank, the bond was met with “very strong demand” among investors looking to diversify their portfolio with assets that are not correlated to any stock market or economy, the largest selling point in the world of catastrophe bonds. The final transaction included 45 global investors and is now “the second largest issuance in the history” of cat bonds, per the World Bank.

READ MORE: AIR Worldwide’s Earthquake Model Approved by Colombian Regulators

Financial services industry giants Swiss Re, Aon, and Citi were the joint leads on the transaction, with AIR Worldwide, a Boston-based catastrophe modeling company, serving as the modeling agent.

“By working together to manage their financial exposure to earthquake, the leaders of Chile, Colombia, Peru, and Mexico are making a powerful commitment to their people to promote long-term economic development,” stated Martyn Parker, chairman of global partnerships of Swiss Re. “We are privileged to have been part of this landmark transaction.”