In response to the growing threats that hurricanes pose to coral reefs in the Colombian Archipelago of San Andrés, Providencia and Santa Catalina, a coalition of partners — AXA COLPATRIA, AXA Climate, Fondo Acción, and WTW Alternative Risk Transfer — has jointly designed a pioneering parametric insurance programme to protect crucial marine life and secure a thriving future for its coastal communities. Their efforts are supported by the Ocean Risk and Resilience Action Alliance (ORRAA) and the MAR Fund, with funding provided by the Blue Action Fund.
A Collaborative Effort that Targets One of the Caribbean’s Largest and Most Biodiverse Reef Systems
Part of a UNESCO World Heritage Site and Biosphere Reserve, this Archipelago is a nature and climate refuge of global significance with a marine area covering nearly 10% of the Caribbean Sea. It is home to over 250 species of fish and nearly 60 coral species[1], making it the second-largest reef system in the Caribbean—and a key place for conservation.
Coral reefs are essential in protecting coastlines from erosion, maintaining the health of marine ecosystems, and supporting the livelihoods of local communities. However, the escalating intensity of extreme weather events is placing this ecosystem under severe stress. In late 2020, Hurricanes Eta and Iota struck the islands just weeks apart, damaging over 70%[2] of the reefs and revealing an urgent need for rapid, dedicated financing for ecological restoration.
An Innovative Insurance Programme
Through this joint initiative, the partners have co-developed a cutting-edge parametric insurance solution. The concept is simple: when predefined triggers—such as wind speed thresholds—are met, the insurance is automatically activated, and funds are released shortly after. This mechanism enables fast and transparent payouts, providing support when it is needed most.
“This model could, for instance, trigger an automatic payout of 80% of the insured value in a scenario similar to Hurricane Iota, with funds used directly for reef restoration,” explains Virgil Salmon, Senior Parametric Underwriter at AXA Climate.
Juanita Blanco, Director Latam/CAC Alternative Risk Transfer Solutions at WTW, adds: “This solution is providing coverage for biodiversity in ways that traditional indemnity insurance simply can’t. Parametric insurance plays a key role in closing that coverage gap. We’re proud to have created and developed this program for San Andrés, Providencia and Santa Catalina, helping to preserve the ecosystem—especially the coral reefs—that support the island’s life, tourism, and economy”.
“This partnership shows that innovative finance can help us respond swiftly to climate impacts while strengthening the resilience of ecosystems and communities,” said Natalia Arango, Executive Director of Fondo Acción.
The Reef Protection Programme Is Grounded in Local Engagement
45 members of local brigades—including fishers, divers, community leaders, and representatives of local authorities—have been trained to respond effectively in the wake of natural disasters. A local response Committee has been established to ensure transparent governance and swift resource mobilisation. A participatory approach was built into the programme from the outset, securing community ownership and long-term sustainability.
“This project demonstrates how climate insurance can serve as a powerful lever for both ecological and community resilience. It’s not just about protecting reefs—it’s about strengthening local capacity to cope with future climate impacts,” notes Markus Knigge, Executive Director of Blue Action Fund.
A Scalable Model for Climate Adaptation
This initiative illustrates how collaboration between technical, financial, and local actors can unlock impactful solutions. The reef insurance model is designed to be replicable in other vulnerable coastal regions, contributing to a global shift toward nature-based climate adaptation.
