Japanese ICMIF member Zenkyoren (National Mutual Insurance Federation of Agricultural Cooperatives) has announced the issuance of a new catastrophe bond, “Nakama Re Series 2026-1 Class 1”, designed to strengthen its resilience against major earthquake risks while incorporating an innovative environmental component.
Issued on 7 April 2026, the USD 100 million (approximately JPY 16 billion) bond has a five-year maturity running through to April 2031. It has been issued via Nakama Re Pte. Ltd., a Singapore-based special purpose reinsurance vehicle, and placed with qualified institutional investors.
The catastrophe bond will provide Zenkyoren with coverage in the event of large-scale earthquakes in Japan. If an event exceeds predefined loss thresholds, the organisation can recover reinsurance claims from Nakama Re, using part or all of the bond’s principal to pay policyholder claims.
Nakama Re 2026-1 is notable for being the first catastrophe bond in Japan to incorporate a carbon offset mechanism. Under this structure, if a qualifying earthquake occurs, Nakama Re has committed to purchasing carbon credits to offset CO₂ emissions generated during post-disaster reconstruction.
These credits will support projects such as renewable energy development and forest conservation, helping to mitigate the environmental impact of rebuilding efforts following a major catastrophe.
Zenkyoren says the issuance reflects its continued focus on both financial resilience and environmental responsibility, aligning disaster risk financing with broader sustainability objectives.
The bond builds on Zenkyoren’s previous catastrophe bond initiatives, which have incorporated environmental, social and governance (ESG) elements. Earlier issuances saw funds invested in bonds from multilateral development banks, including the European Bank for Reconstruction and Development, the International Bank for Reconstruction and Development, and the Asian Development Bank, supporting green projects, sustainable development, and poverty reduction initiatives.
Zenkyoren says it will continue to pursue sound management practices to meet the trust and expectations of its members, while contributing to the long-term resilience of agriculture, local communities, and society.
