Parametric policy triggered by cyclone wind speed, funding emergency repair of a coral reef rather than compensating a conventional property owner.
Parametric reef insurance covers the risk of damage to a coral reef caused by a cyclone or tropical storm, using a parametric trigger based on wind speed recorded in a defined zone, rather than a post-loss damage assessment. The principle mirrors other parametric covers, fast payout and no dispute over the amount of damage, but the insured object changes radically: what is covered is not a conventional asset in the ownership sense, but an ecosystem whose economic value lies in indirect services, coastal protection against erosion and flooding, support for fishing and tourism. The policyholder is typically not a private owner, since no ownership title applies to a reef, but a public body or environmental organization that receives the funds to finance a rapid repair intervention, stabilizing broken coral colonies before they die, within the weeks following the storm, a period considered critical to the reef's survival. This model illustrates the extension of the insurable perimeter to natural infrastructure recognized for its economic function, rather than a strict choice between conventional insurable property and no cover at all.
Launched in 2018 in the Mexican state of Quintana Roo, funded by a local hotel tax and held by the MAR fund managed with The Nature Conservancy, the world's first parametric coral reef policy triggers at a defined wind-speed threshold and funds a team of divers to repair broken corals within days of a hurricane.
reef insurance, assurance récif corallien, parametric reef insurance