First ever coral reef insurance policy

Hurricane Delta in October 2020, which hit the coast of Quintana Roo, Mexico, officially triggered the world’s first-ever coral reef insurance policy. The resulting payout amount to USD 800,000 will be used to offset the costs of repairing the insured reefs.

Nowadays, insurers diversify offerings with insurance products against climate change impacts such as storm surges, floods, and droughts. Cutting-edge parametric insurances are increasingly used to cover the inevitable loss and damage due to those extreme climate events. The advance of monitoring technology and risk modeling and scenario analysis has enabled such innovative products. For the sustainable use of ecosystems to benefit communities, insurance products to address climate change could be one convincing solution. The rapid recovery of corals and other important ecosystems is key to the sustainability of the economic value of biodiversity. The world's first coral insurance policy is an inspiring example of such a path-breaking tool.