In June we wrote about the launch of a project to develop an innovative parametric insurance program to protect the Mesoamerican Reef system and the communities that rely on it against impacts from hurricanes.
Now, it’s been announced that the insurance carrier sitting behind the parametric reef insurance policy is AXA Climate, the parametric and climate risk transfer focused unit of global insurance and reinsurance carrier AXA Group.
The Mesoamerican Reef system which lies in the Caribbean Sea, touching the coasts of Mexico, Belize, Guatemala and Honduras and this new insurance program was dubbed a “world-first post-hurricane insurance protection”, with the parametric insurance product set up to payout when triggered by hurricane intensity.
This week, the partners on the project, the Mesoamerican Reef Fund (MAR Fund), InsuResilience Solutions Fund, and insurance and reinsurance broker Willis Towers Watson announced the appointment of AXA Climate as the insurance carrier that will support the MAR Insurance Programme.
The choice was made following a competitive placement process undertaken by Willis Towers Watson’s parametric broking specialists within its Climate and Resilience Hub and Alternative Risk Transfer team, with AXA Climate on behalf of AXA XL selected as the capacity provider.
Antoine Denoix, CEO of AXA Climate, commented on the win, “AXA Climate’s mission is to support the transition to a sustainable and more resilient world. Protecting coral reefs is essential for the balance of the oceans and the millions of people who depend on them. We are very proud to support this innovative programme. It demonstrates the key role insurance plays in incentivising preparedness and providing rapid finance to mitigate ocean related risks and restore corals as quickly and efficiently as possible.”
Dr Simon Young, a senior director of the Climate and Resilience Hub at Willis Towers Watson, added, “This ground-breaking programme demonstrates how novel approaches to risk financing can incentivise and deliver the rapid action which is so beneficial to building reef resilience in the face of the increasing impacts of climate change, from warming oceans to severe weather events. We are delighted to have AXA Climate on board and look forward to working closely with their team, while also acknowledging the keen interest and commitment of the broader reinsurance market demonstrated in part by such strong pricing competition.”
María José González, executive director of MAR Fund, also said, “Emergency response groups that integrate local communities and are trained to act immediately after a storm retreats, are critical to connecting sustainable finance with concrete reef resilience outcomes. Bringing together human capacity and financial sustainability is vital to securing reef recovery and resilience.”
Dr Annette Detken, Head of the InsuResilience Solutions Fund, stated, “Climate risk insurance enables vulnerable countries to respond more quickly and effectively. To address these issues and strengthen the resilience of poor and vulnerable people in developing countries, the InsuResilience Global Partnership aims to scale-up climate and disaster risk finance and insurance approaches for poor and vulnerable countries. We look forward to seeing this innovative approach being replicated in other countries.”