WTW and The Nature Conservancy launch first US coral reef insurance policy

The US’s first ever coral reef insurance policy has been launched by WTW and The Nature Conservancy (TNC). It will provide money for rapid coral reef repair and restoration across Hawaii, immediately following hurricane or tropical storm damage. The policy is provided by Munich Re and is triggered at windspeeds of 50 knots (57mph) if sufficiently close to reefs and provides payouts up to $2m within days to allow rapid reef repair and restoration after storm damage, and to facilitate emergency care, said WTW. The Hawaii policy, supported by funders including the Bank of America Foundation and Howden Group Foundation, covered the latter part of the 2022 hurricane season and will be in place during the entire 2023 season. “The Nature Conservancy is thrilled to pilot the first coral reef insurance policy in the United States,” said Ulalia Woodside Lee, executive director, TNC, Hawaii and Palmyra. “In Hawaii, we are rooted in the environment; the health of our coastlines and communities is directly tied to the health of the coral reefs surrounding our islands. By investing in nature, our insurance and finance partners are demonstrating its value as a critical natural, cultural and economic resource.” When a hurricane or tropical storm triggers a cash payout, TNC will activate an advisory committee in coordination with the State of Hawaii’s Division of Aquatic Resources (DAR) and other local partners, to guide the use and distribution of the funds for reef repair and restoration, said WTW. It added that TNC, DAR and other partners will convene in early 2023 to develop a response plan to guide first responders and reef managers to rapidly and effectively address impacts from storms, including reattaching broken corals and debris cleanup. “Helping to design the first pre-arranged, trigger-based insurance policy for coral reefs in the US has been very exciting,” said Simon Young, senior director, climate and resilience hub, WTW. “With climate change-related natural hazards increasing in scale and frequency, this type of groundbreaking solution enables the rapid deployment of resources to help repair critical ecosystems and restore services following a major event like a hurricane.” The policy builds on the world’s first reef insurance policy covering hurricane damage in Mexico back in 2019, implemented by TNC and partners to protect against hurricane damage in Quintana Roo, Mexico. A cash payout from that policy was used to repair damage from hurricane Delta. Since then, the Mesoamerican Reef Fund, working in collaboration with WTW’s climate and resilience hub, has designed a groundbreaking, bespoke parametric insurance programme across the full extent of the Mesoamerican Reef, from southern Mexico through Belize, Guatemala and Honduras. “Managing natural resources is a costly endeavour and more investment is always needed,” said Brian Nielson, administrator, DAR, State of Hawaii Division of Land and Natural Resources. “TNC has been an excellent partner in restoring the reefs and fisheries of Hawaii and we are grateful for its leadership in securing this insurance. It is a step forward in coral reef conservation and will provide vital funding to repair reefs when it is urgently needed.” “Coral reefs are vital to our people, culture, lifestyle and economy; reef insurance will help us care for them,” added Ekolu Lindsey of local community partner Kīpuka Olowalu. “In Hawaiian culture, the coral polyp is the origin of all life. We have a kuleana (responsibility) to maintain the integrity and rejuvenation of our coral reef systems. We look forward to working with TNC and other partners to develop response plans to mālama (care for) our ko‘a (corals), and to ensure that reef insurance funds are applied fairly.”

WTW and The Nature Conservancy launch first US coral reef insurance policy

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