WTW has unveiled an innovative parametric insurance policy designed to safeguard the coral reef ecosystems within the South Pacific Ocean’s Lau Group.
This pioneering insurance solution is crafted to confront the escalating threats to the Lau islands’ coral reefs, exacerbated by climate change-related phenomena such as rising sea levels, ocean warming, acidification, and tropical cyclones.
The deteriorating health of these coral reefs not only presents ecological dangers but also threatens the livelihoods of Lau’s Indigenous populations, who depend on these ecosystems for both sustenance and economic activities.
Acknowledging the acute need for effective climate risk mitigation strategies in the region, particularly for invaluable natural assets like coral reefs, WTW initiated a partnership with Fiji’s Vatuvara Foundation (VVF) and BHP.
This collaboration has led to the development of a customized insurance solution specifically designed to meet the unique requirements of the Lau islands. Financed by BHP’s social investment initiatives, this programme aims to deliver prompt financial support to counteract the impacts of cyclones and bolster community-led reef restoration endeavors.
The insurance policy is predicated on a trigger-based mechanism, ensuring rapid fund disbursement following cyclonic destruction.
This setup facilitates the immediate assessment of reef damage and expedites the provision of essential recovery assistance. Additionally, the program offers critical support to local communities through food and water security projects, addressing immediate post-disaster needs and fostering enduring resilience.
Initially, the insurance coverage will include notable locations such as Vatuvara Island, Yacata, and Kaibu, with prospects for future expansion to additional sites within the Lau Seascape.
Sarah Conway, WTW’s Director and Ecosystem Resilience Lead, expressed gratitude towards BHP for its crucial role in the conception and execution of Fiji’s inaugural coral reef insurance programme.
Drawing from WTW’s extensive experience with similar initiatives globally, Conway highlighted the programme’s innovative approach to integrating rapid reef recovery with community support mechanisms, thereby enhancing the resilience of both the ecosystem and its dependent populations.
Katy Miller, Director of the Vatuvara Foundation, commended the parametric policy for its capability to provide swift financial access post-cyclone, facilitating community-led reef restoration efforts in Northern Lau.
She emphasized the importance of such initiatives in building long-term resilience against the increasing frequency and severity of extreme weather events and other anthropogenic challenges.
Ashley Preston, BHP’s Head of Climate Resilience, underscored BHP’s investment in the parametric insurance product as a strategic effort to conserve coral reefs and support local communities in Fiji’s northern Lau Group.
This project aligns with BHP’s broader commitments to climate action, conservation, and community empowerment.
Aholotu Palu, CEO of PCRIC, lauded the initiative’s alignment with PCRIC’s mission to enhance disaster resilience and financial management among Pacific island communities.
He acknowledged the Vatuvara Foundation’s contributions to reef conservation and community empowerment as pivotal to Fiji’s national interests and developmental priorities, especially within the context of the Blue Pacific Strategy and climate change adaptation efforts.by Nataly Kramer