Partnership agreement between MAR Fund and Willis Towers Watson to develop an insurance model for reefs

James Vickers and Lorenzo Rosenzweig

Press Release

Berlin, Germany. Today, 11^th July, 2018, Willis Towers Watson, through its Global Ecosystem Resilience Facility (GERF), and the Mesoamerican Reef Fund (MAR Fund) signed a letter of agreement to collaborate on formulating, submitting for funding and, if successful, executing the project: Development and implementation of an insurance model for reefs in the four countries of the Mesoamerican Reef Region (MAR). A Concept Idea for the project was submitted yesterday to the InsuResilience Solutions Fund, announced as part of the InsuResilience Global Partnership and managed by KfW, the German government-owned development bank.

Through the proposed project, GERF and MAR Fund will develop an insurance model for reefs to support early response and restoration actions after a climate event, to reduce long-term damage and speed up recovery, and to improve resilience and the creation of natural capital value in the Mesoamerican Reef. Overall, the parametric reef insurance is to be developed and implemented at approximately seven sites distributed in the four countries of the MAR Region: Mexico, Belize, Guatemala and Honduras.

The proposed project is part of the Mesoamerican Reef Rescue Initiative (RRI), a 5-year project implemented by MAR Fund and supported by KfW through an endowment fund. The RRI will support the long-term ecologic and economic viability of the Mesoamerican Reef and the environmental services it provides by helping to develop the human capacity, regulatory environment, local economic incentives and financial sustainability required to carry out sound, effective and timely science-based coral reef conservation and restoration. The RRI is carried out by the MAR Fund and the Central American Commission on Environment and Development (CCAD), with the participation of the four countries that share the Mesoamerican Reef.

Reefs provide critical and important ecological and economic services. They are at risk worldwide due to increasing weather events that are severely diminishing the environmental services they provide, such as food security, biodiversity, tourism and coastal infrastructure. The risk, however, is insurable. The challenge and innovation are to develop insurance for natural assets – similar to current parametric insurance for crops and cattle. Insurance for reefs is an innovative financial mechanism that can contribute to reef restoration and recovery.

About the organisations:

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has over 40,000 employees serving in more than 140 countries. We design and deliver solutions that manage risk, optimise benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.

Willis Towers Watson’s Capital, Science and Policy team develops opportunities to ground public policy decisions and practices in precise, accurate, and robust data; inform the business case for investments in sustainability and resilience; attract private investment in strong communities; and ultimately reduce potential legal liabilities associated with extreme weather and other effects of climate change.

The GERF focuses on the growing application of insurance and insurance related capabilities to support investment in, and resilience of, marine and terrestrial ecosystems, protecting exposed communities and assets and fulfilling public policy objectives and regulatory requirements.

The MAR Fund is a private regional environmental fund whose primary goal is to protect the Mesoamerican Reef Ecoregion. Its mission is to enable innovative, transnational solutions to critical MAR issues through providing meaningful, long-term financial support and trustworthy reef management advice so that future generations can enjoy and benefit from a thriving reef system.