The Mesoamerican Reef Fund (MAR Fund) and Willis, a WTW business (NASDAQ: WTW), recently announced the appointment of AXA Climate as the insurance solutions designer for the fifth annual placement of the MAR Insurance Programme — a pioneering nature insurance solution advancing climate resilience and ecosystem protection. This year’s renewal has been made possible with financial support from the InsuResilience Solutions Fund (ISF), a key partner of the program since its first placement in 2021.
Insurance for Nature Protection and Restoration
The MAR Region provides over US$4.5 billion in environmental services annually [1]. As a vital natural infrastructure, it plays a key role in protecting more than 5 million people living within 50 km of the coast throughout the MAR region. The MAR Insurance Programme, a cornerstone of MAR Fund’s Reef Rescue Initiative, is a regional financial mechanism that utilises parametric insurance to quickly deploy funds for community-led response efforts aimed at repairing reef damage caused by hurricanes. Covering 11 protected reef sites, the insurance supports response actions that strengthen the resilience of coral reef ecosystems and the coastal communities that depend on them, along the 1,000 km stretch of the Mesoamerican Reef (MAR) across Mexico, Belize, Guatemala, and Honduras [2].
María José González, executive director of MAR Fund, said: “The MAR Insurance Programme is an effective mechanism that encompasses not only the insurance product itself, but also the response capacities. Through this programme, MAR Fund, its partners, and the governments of the region have built a network of reef guardians, ready to respond immediately after a hurricane impacts the coral reefs.”
Proven Nature-Based Insurance in Action
The programme demonstrated its value when Hurricane Lisa, a Category 1 storm, triggered a payout for the Turneffe Atoll National Marine Reserve in Belize in November 2022. This marked the first payout of the MAR Insurance Programme. Willis, serving as the calculation agent, confirmed that wind speeds reached 70 knots, activating the payout, which MAR Fund received within two weeks. Funds were delivered to MAR Fund´s Emergency Fund, another pillar of the Reef Rescue Initiative, and were quickly distributed to Turneffe Atoll Sustainability Association (TASA), which coordinated the response. Within 15 days of the hurricane, brigades assessed the reef damage and stabilised nearly 200 coral fragments.
Juanita Blanco, Director, Alternative Risk Transfer Solutions at Willis, said: “Willis is proud to be a part of the team that continues to deliver this ground-breaking initiative to the MAR region. The MAR Insurance Programme demonstrates how novel approaches to risk financing can play a critical role in ecosystem resilience, conservation financing and strengthening the economic opportunities of local communities in the face of the increasing impacts of climate change.”
Innovative Insurance Driving Marine Protection at Scale
Now entering its fifth year of operation, the portfolio has expanded from 4 sites in 2021 to 11 reef sites across the MAR region since 2023. This has been possible thanks to the generous premium support from ISF. During its implementation, the programme has been supported by partners, such as the Ocean Risk and Resilience Action Alliance (ORRAA) and the Adaptation Fund Climate Innovation Accelerator (AFCIA/UNDP).
The Wildlife Conservation Society (WCS) has joined this effort, strengthening the coverage and capacities at two sites in southern Belize. Willis’ Alternative Risk Transfer team has placed the product competitively in markets, and for this year, AXA Climate is the insurance provider.
Antoine Denoix, CEO of AXA Climate, said: “At AXA Climate, we are proud to put our expertise in parametric nature insurance at the service of the MAR Insurance Programme. The mechanism has already demonstrated its usefulness by providing rapid financing for reef restoration after hurricane impacts. By combining science, insurance, and local action, it helps protect vital ecosystems and strengthen the resilience of the millions of people who depend on the Mesoamerican Reef.”
In the face of climate change, this innovative solution unlocks disaster response financing for the coral reefs of the MAR by using parametric insurance to provide timely and reliable funding for immediate response actions following a hurricane. This regional approach also strengthens collaboration across the region, resulting in a network of partners committed to exploring the replication and scaling of the model to other sites, risks, and assets.
Dr Annette Detken, head of the InsuResilience Solutions Fund, said: “The MAR Insurance Programme is paving the way for nature-based solutions against climate risks. The ISF is proud to continue supporting this innovative insurance programme protecting a unique natural treasure and providing livelihoods for vulnerable people in the MAR region.”
