Insurance for Nemo & Co.


The colorful variety of coral reefs is at risk.

Coral reefs are true miracles of nature. In addition to a great number of fish species, sea shells, sea urchins, and sea turtles have all found a home in them. But this colorful variety is at risk – tourism, plastic trash, and not least climate change contributed to the fact that already 25 to 50 % of all living corals have died off (according to UNESCO estimates).1 A reef off the coast of Mexico will become a test object. The idea: insurance to protect the underwater world.

Every year, about 12 million visitors come to the coast of Mexico to admire the Belize Barrier Reef. But the coral reef is more than just a tourist magnet. As an essential part of the marine ecology, it is home to thousands of animal and plant species and, as a natural barrier, protects the coast from severe storms. Healthy reefs are capable of reducing the energy of waves by up to 97 %. This protects coastal communities and reduces beach erosion.2

Insurance coverage for the Belize Barrier Reef

The insurance policy for the Belize Barrier Reef is an initiative of the US environmental protection organization "The Nature Conservancy", in cooperation with the insurance company Swiss Re. The insurance premiums are paid by local businesses that depend on tourism. Should the reef be hit by a severe storm and damaged, the insurance could pay sums between 25 and 70 million Dollars per year. A 60 km section of the reef is constantly monitored to be able to assess the damage. The insurance benefits are then used to restore the coral reef. For instance using an artificial scaffold that helps the reef grow. An alternative method, removes coral from the reef temporarily so it can recover for a few weeks or even months. Then it is reintroduced into its natural habitat, which helps promote the regeneration of the entire reef. Many hotels, restaurants, and other businesses have committed to the innovative policy, which is also partly covered by the Mexican government.

An idea with a future

The Mexican coral reef insurance is the first of its kind in the world. The idea of combining environmental protection with the costs and benefits of individual businesses could become a model for a number of future projects. According to experts, this type of insurance is a scalable solution for businesses, governments, and insurance companies all over the world. For instance, mangrove forests also protect many coastal areas from severe storms. Logging, agriculture, and climate change also threaten these environments. Insurance could certainly also benefit these areas.3


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