WTW further expands insurance program to safeguard coral reef

WTW and the Mesoamerican Reef Fund (MAR Fund) announced the third annual placement of the MAR Insurance Program, with AXA Climate serving as the insurance capacity provider.

The program, a key component of the MAR Fund’s Reef Rescue Initiative, uses parametric insurance to quickly deploy funds for community-led response activities to repair reef damage after hurricanes.

The initiative operates across a 1,000 km Mesoamerican reef, covering Mexico, Belize, Guatemala, and Honduras. With more than 65 species of coral and more than 500 species of fish, the reef supports the livelihoods, nutrition, and coastal protection of more than two million people.

WTW’s involvement came in 2021 after it developed a model that captured the link between hurricane strength and reef damage.

With funding from the InsuResilience Solutions Fund (ISF), WTW initially deployed the program at four sites, with two in Mexico and another two in Belize. After a successful first year, the program was renewed and expanded to include two sites in Honduras and one in Guatemala.

This year’s renewal received financial support from the ISF and the United Nations Development Program (UNDP), building on previous assistance from the Ocean Risk and Resilience Action Alliance (ORRAA). In addition, the incumbent AXA Climate was selected as the insurance capacity provider, following the WTW’s competitive positioning process.

For its third year, the program will now include two additional sites in Honduras, plus two more in Belize through a partnership with the Wildlife Conservation Society (WCS). This expansion will bring the total number of reef sites covered by the program to 11 in the entire MAR region.

“Entering the third year of this program shows how the combined powers of collaboration, trusted partnerships and pre-arranged finance can move the needle on coastal protection and ecosystem stability,” said Simon Young, co-lead of the disaster risk finance and parametrics team at the Climate and Resilience Hub at WTW.

The program of action

In a press release, WTW detailed the role played in the restoration program at Turneffe Atoll Marine Reserve in Belize after it was damaged by category 1 Hurricane Lisa in November.

According to the release, WTW calculations confirmed that the wind speed reached 70 knots. This resulted in a US$175,000 payout received by the MAR Fund in its entirety within just two weeks of the event.

Soon after, the MAR Fund disbursed this payout to the brigades coordinated by the Turneffe Atoll Sustainability Association (TASA). Brigades were later sent to assess the damage to the reef and carry out initial response activities, including the stabilization and repositioning of nearly 200 pieces of coral.

María José González, executive director of the MAR Fund, emphasized the new nature of the program as an instrument for risk management and emergency response.

“Through this program, the MAR Fund and its partners, including the governments of the four MAR countries, contribute to the stability and recovery of the Mesoamerican Reef,” said González.

Similarly, Dr Annette Detken, head of the InsuResilience Solutions Fund, praised the MAR Insurance Program for its contributions to nature-based solutions against climate risks.

“ISF is proud to co-fund this new insurance program that protects a unique natural resource and provides livelihoods for vulnerable people in the MAR region,” he said.

Antoine Denoix, CEO of AXA Climate, also emphasized the importance of environmental protection as a long-term mechanism in the face of increasing climate-related disasters.

“As a pioneer in impact insurance, our Third Amendment team has demonstrated the consistency of its commitment to ocean conservation,” said Denoix. “AXA Climate is very proud to remain a key partner in MAR’s resilience and to contribute to its transformation in the wake of Hurricane Lisa.”

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