Distributive policy

WTW and The Nature Conservancy Launch First-Ever Coral Reef Insurance Policy in the United States – InsuranceNewsNet

said Simon Young|Senior Director, Climate and Resilience Hub, at WTW.

Nature conservation is excited to pilot the first coral reef insurance policy in United States,” said Ulalia Woodside LeeExecutive Director, Nature conservation, Hawaii and Palmyra. “In Hawai’i, we are grounded in the environment; the health of our coasts and communities is directly linked to the health of the coral reefs that surround our islands. By investing in nature, our insurance and funding demonstrate its value as an essential natural, cultural and economic resource.

“Contributing to the design of the first pre-arranged, trigger-based insurance policy for coral reefs in the WE has been very exciting,” said Simon Young, Senior Director, Climate and Resilience Hub, WTW. “With the increasing scale and frequency of natural hazards related to climate change, this type of game-changing solution enables the rapid deployment of resources to help repair critical ecosystems and restore services following a major event such as a hurricane.”

Coral reefs are a vital natural asset to the people, culture, and economy of Hawaii, but they are increasingly under threat due to climate change and other human impacts. Reefs provide coastal flood protection to thousands of people and properties, and contribute more than $1.2 billion to the state economy through tourism. Hawaii’s reefs are also home to the endangered green sea turtle and Hawaii official state fish, the Humuhumunukunukuapua’a.

Tropical storms and hurricanes, which are increasing in intensity due to climate change, pose a major short-term threat to coral reefs. Research shows that severe hurricanes can lead to a loss of 50% or more of living coral cover, and the loss of just one meter of reef height could result in a double cost of damage to coastal communities. Healthy, intact reefs can reduce wave energy by up to 97% and are an island’s first line of defense during storms; protecting them is vital.

“Natural resource management is an expensive business, and more investment is always needed,” says Brian Nielsonadministrator, Aquatic Resources Division (DAR), State of Hawaii Lands and Natural Resources Division. “TNC has been an excellent partner in restoring Hawaii’s reefs and fisheries, and we are grateful for their leadership in securing this assurance. This is a step forward in coral reef conservation and will provide a vital funding to repair the reefs when they are urgently needed.”

When a hurricane or tropical storm triggers a cash payment, TNC will activate an advisory committee in coordination with the Aquatic Resources Division and other local partners to guide the use and distribution of funds for reef repair and restoration. TNC, DAR and other partners will meet in early 2023 to develop a response plan to guide first responders and reef managers to quickly and effectively deal with storm impacts, including reattaching broken corals and cleaning up debris.

“Coral reefs are vital to our people, our culture, our way of life and our economy; reef insurance will help us take care of them,” says Ekolu Lindsey of local community partner Kīpuka Olowalu. “In Hawaiian culture, the coral polyp is the origin of all life. We have a kuleana (responsibility) to maintain the integrity and rejuvenation of our coral reef systems. We look forward to working with TNC and other partners to develop response plans to mālama (care for) our ko’a (corals) and ensure reef insurance funds are applied equitably.”

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About the Climate and Resilience Hub

The Climate and Resilience Hub (CRH) is the focal point of WTW’s climate expertise and capabilities, bringing together knowledge from our teams, risk and capital activities and collaborations to deliver climate and resilience solutions in response to a range of regulatory, investor, consumer, employee and operational pressures. Under the Climate Quantified™ brand, we provide analysis, advice and transactions to enable business, finance and public sector institutions to embrace the coming climate decade.