Insurance giants AXA and WTW step up efforts against climate risk
The islands of San Andrés, Providencia, and Santa Catalina, home to over 250 species of fish and nearly 60 coral species, have been hit hard by hurricanes Eta and Iota late last year. The storms caused significant damage to over 70% of the reefs, revealing an urgent need for rapid, dedicated financing for ecological restoration.
To address this need, a coalition of partners - AXA COLPATRIA, AXA Climate, Fondo Acción, and WTW Alternative Risk Transfer - have jointly designed a parametric insurance programme to protect the marine life in the Archipelago. The MAR Insurance Programme, supported by the InsuResilience Solutions Fund and Willis Towers Watson, is a critical pillar of MAR Fund's Reef Rescue Initiative.
The reef insurance model, designed for the Mesoamerican Reef, is replicable in other vulnerable coastal regions, contributing to a global shift toward nature-based climate adaptation. This innovative programme uses fast-paying parametric hurricane insurance to enable reef restoration.
The parametric insurance programme is designed to automatically release funds for reef restoration when predefined triggers, such as wind speed thresholds, are met. AXA Climate has been appointed as the insurance capacity provider for the MAR Insurance Programme.
The programme is grounded in local engagement, with 45 members of local brigades trained to respond effectively in the wake of natural disasters. The Archipelago, part of a UNESCO World Heritage Site and Biosphere Reserve, covering nearly 10% of the Caribbean Sea, benefits from this local response committee that ensures transparent governance and swift resource mobilisation.
The MAR Fund and Willis Towers Watson work together to repair some of the damage done by hurricanes. The first ever pay-out by the Mesoamerican Reef (MAR) Insurance Programme was triggered on 2 November.
The reef insurance model aims to provide coverage for biodiversity in ways that traditional indemnity insurance can't, and plays a key role in closing the coverage gap. The MAR Insurance Programme is supported by the Ocean Risk and Resilience Action Alliance (ORRAA) and the MAR Fund, with funding provided by the Blue Action Fund. This collaborative effort is paving the way for a more resilient future for the Mesoamerican Reef and similar ecosystems worldwide.
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