Willis Tower Watson (NASDAQ: WLTW), a leading global advisory,
broking, and solutions company, today announced the launch of a
multinational partnership project with the Mesoamerican Reef Fund
to develop and implement insurance solutions that help protect and
restore the 1,000km reef system along the Caribbean coast.
The goal of the Mesoamerican Reef Insurance
Programme is the first multinational collaboration that will design
and implement parametric insurance covering hurricane risk to the
Mesoamerican Reef (MAR) and the communities that depend on it for
protection, food security, and livelihoods. Pilot coverage for key
reef sites in Mexico, Belize, Guatemala, and Honduras will enhance
the climate resilience of almost 2 million beneficiaries.
The Mesoamerican Barrier Reef System is listed
as critically endangered by the IUCN Red List of Ecosystems and is
home to 65 species of coral and more than 500 species of fish, as
well as many other protected marine species. Coastal wetlands,
lagoons, mangrove forests, and seagrass beds also protect against
storms and coastal erosion.
As the effects of climate change and other
stressors exert increasing pressure on the reef, the risk of a
hurricane impact leading to irreversible coral degradation and
mortality has grown. Early action to clean up the reef and
jump-start regeneration and recovery is critical to reducing the
overall impact of lost ecosystem services—in both social and
economic terms. However, the restoration of natural ecosystems is
often not a priority in the aftermath of extreme events, as
resources are focused mainly on grey infrastructure and
property.
The project is being co-funded and implemented
by Willis Towers Watson and the Mesoamerican Reef Fund (MAR Fund),
the regional financing mechanism for large-scale maintenance,
conservation, and restoration of the reef system. MAR Fund will be
the policyholder of the insurance programme.
John Haley, chief executive officer of Willis
Towers Watson, said: “In 2018, we launched the Global Ecosystem
Resilience Facility at the World Ocean Summit in Cancun. We are
delighted to be back in central America, partnering with the MAR
Fund and supported by the InsuResilience Solutions Fund, to build
resilience of the Mesoamerican reef and its communities. Marine
ecosystems may be ‘free’ public goods, but their active maintenance
is essential in sustaining their health and value. This program
help us learn how insurance can provide a unique shared governance
framework to manage reefs and other vulnerable natural
ecosystems”
María José González, executive director of MAR
Fund said: “This collaboration is a great opportunity for the MAR
region. We see the insurance model as a risk management tool that
will provide immediate funds for reef restoration, thereby
contributing to strengthening coastal resilience, and to the
recovery of the MAR and the environmental services it provides. MAR
Fund will be the policyholder and will manage the pay-outs. We will
work closely with national governments and other partners and
stakeholders to build the needed capacities for emergency response
and preparedness.”
The InsuResilience Solutions Fund (ISF), managed
by Frankfurt School of Finance and Management and funded by KfW
Development Bank, has signed the grant funding agreement for the
insurance programme.
Annette Detken, director of the ISF, said: “This
partnership combines the expertise of local partners and the
insurance sector, ensuring that products are developed according to
the needs of the vulnerable population. Our grant will co-fund the
development and implementation of this innovative insurance product
insuring coastal ecosystems that provide much needed services for
local communities. We believe this insurance solution could serve
as a model for other countries seeking to protect important natural
assets, like coral reefs.”
The Ocean Risk and Resilience Action Alliance,
with funding from Global Affairs Canada, supported the preliminary
design of the insurance mechanism. Pay-outs will be triggered by
the intensity of a hurricane, converted to an estimate of the
extent of damage to the reef through a novel reef risk model. A
group policy will cover the pilot reef sites, with a bespoke
pay-out structure reflecting the cost of response at each reef site
at different damage levels.
Simon Young, a senior director in the Climate
and Resilience Hub at Willis Towers Watson added “We are grateful
to the ISF for supporting the design of the MAR Insurance
Programme, and most importantly, funding its implementation.
Tangible examples like this demonstrate the possibilities for
innovative financing to support practical action to build the
resilience of crucial ecosystems and the communities, livelihoods,
and biodiversity they support, and to unlock large-scale
investments in natural assets which are critical to address loss of
biodiversity and increasing impacts of climate change.”
About the Climate and Resilience
Hub
The Climate and Resilience Hub (CRH) is the
focal point for Willis Towers Watson’s climate expertise and
capabilities, pooling knowledge from across our people, risk, and
capital businesses and from our collaborations to deliver climate
and resilience solutions in response to a range of regulatory,
investor, consumer, employee, and operating pressures. Under the
Climate Quantified™ brand, we deliver analytics, advice, and
transactions to enable corporate, finance, and public sector
institutions to embrace the climate decade ahead.
About Willis Towers Watson
Willis Towers Watson (NASDAQ: WLTW) is a leading
global advisory, broking, and solutions company that helps clients
around the world turn risk into a path for growth. With roots
dating to 1828, Willis Towers Watson has 45,000 employees serving
more than 140 countries and markets. We design and deliver
solutions that manage risk, optimise benefits, cultivate talent,
and expand the power of capital to protect and strengthen
institutions and individuals. Our unique perspective allows us to
see the critical intersections between talent, assets, and ideas —
the dynamic formula that drives business performance. Together, we
unlock potential. Learn more at willistowerswatson.com.
Media contact
Andrew Collis +44 (0) 7932 725267 |
andrew@acolliscommunications.com
Miles Russell +44 (0) 7903 262118 |
Miles.Russell@WillisTowersWatson.com
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