AXA COLPATRIA, AXA Climate, Fondo Acción, and WTW Alternative Risk Transfer have partnered to announce a collaborative parametric insurance programme intended to safeguard coral reefs in the Colombian Archipelago of San Andrés, Providencia, and Santa Catalina.
The programme is designed to “protect crucial marine life” in the Caribbean’s second largest coral reef from hurricanes, while simultaneously “securing a future for its coastal communities”.
The collective effort is supported by the Ocean Risk and Resilience Action Alliance (ORRAA) and the MAR Fund, with the Blue Action Fund providing monetary support.
The Archipelago is a nature and climate refuge with a marine area covering roughly 10 per cent of the Caribbean Sea and, according to the San Andrés and Providencia government, is home to over 250 species of fish and nearly 60 coral species — making it crucial for conservation.
According to the firms, the escalating intensity of extreme weather events is placing the ecosystem under stress. Late 2020 saw Hurricanes Eta and Iota strike the islands, damaging over 70 per cent of the reefs, as reported by the Colombian Bulletin of Marine and Coastal Research.
Through the initiative, when predefined triggers — such as wind speed thresholds — are met, insurance is automatically activated, with funds being released shortly thereafter.
Virgil Salmon, senior parametric underwriter at AXA Climate, believes that: “This model could, for instance, trigger an automatic payout of 80 per cent of the insured value in a scenario similar to Hurricane Iota, with funds used directly for reef restoration.”
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