Insurance giants AXA and WTW actively respond to climate risk challenges
The Caribbean Catastrophe Risk Insurance Facility (CCRIF) has taken on the role of Insurance Capacity Provider for a parametric insurance programme designed to protect the coral reefs of Colombia's San Andrés, Providencia, and Santa Catalina islands. This initiative is a critical part of the MAR Fund's Reef Rescue Initiative.
The MAR Insurance Programme, a collaboration between technical, financial, and local actors, is a parametric solution that automatically activates and releases funds when predefined triggers, such as wind speed thresholds, are met. The programme is supported by the Ocean Risk and Resilience Action Alliance (ORRAA) and the MAR Fund, with funding provided by the Blue Action Fund.
The Archipelago of San Andrés, Providencia, and Santa Catalina is a significant nature and climate refuge, part of a UNESCO World Heritage Site and Biosphere Reserve, and covers nearly 10% of the Caribbean Sea. It is home to over 250 species of fish and nearly 60 coral species, making it the second-largest reef system in the Caribbean and a key place for conservation.
Hurricanes Eta and Iota, which struck the islands in late 2020, damaged over 70% of the reefs, revealing an urgent need for rapid, dedicated financing for ecological restoration. The MAR Insurance Programme uses fast-paying parametric hurricane insurance to enable reef restoration.
A local response Committee has been established to ensure transparent governance and swift resource mobilisation, and a participatory approach was built into the programme from the outset, securing community ownership and long-term sustainability. To this end, 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.
AXA Climate has been appointed as the insurance capacity provider for the MAR Insurance Programme. They have jointly designed the programme with AXA COLPATRIA, Fondo Acción, and WTW Alternative Risk Transfer, with the aim of providing fast and transparent payouts, providing support when it is needed most.
The reef insurance model, designed for vulnerable coastal regions, could contribute to a global shift toward nature-based climate adaptation. This model is designed to be replicable in other vulnerable coastal regions, offering hope for the protection and preservation of valuable marine ecosystems worldwide.
The Mesoamerican Reef (MAR) Insurance Programme has made its first-ever payout on coral reef damage, marking a significant step forward in the protection and restoration of these vital ecosystems. This payout will help ensure a thriving future for the coastal communities that rely on these reefs for their livelihoods and for the continued health of the Caribbean Sea.
