Small logo Subscribe to leading news on impact investing. Learn More
The Brief Originals Dealflow Signals The Impact Alpha Impact Voices Podcasts Agents of Impact Open
What's Next Capital on the Frontier Measure Better Investing in Racial Equity Beyond Trade-offs Impact en las Americas New Revivalists
Local and Inclusive Climate Finance Catalytic Capital Frontier Finance Best Practices Geographies
Slack Agent of Impact Calls Events Contribute
The Archive ImpactSpace The Accelerator Selection Tool Network Map
About Us FAQ Calendar Pricing and Payment Policy Privacy Policy Terms of Service Agreement Contact Us
Locavesting Entrepreneurship Gender Smart Return on Inclusion Good Jobs Creative economy Opportunity Zones Investing in place Housing New Schooled Well Being People on the Move Faith and investing Inclusive Fintech
Clean Energy Farmer Finance Soil Wealth Conservation Finance Financing Fish
Innovative Finance
Personal Finance Impact Management
Africa Asia Europe Latin America Middle East Oceania/Australia China Canada India United Kingdom United States
Subscribe Log In

A reef off of Mexico is getting its own insurance policy

Climate risks can be a business opportunity. Swiss Re, the $215 billion Swiss reinsurer, has underwritten the Mesoamerican Reef off Mexico’s Mayan Riviera around Cancun.

Hotels that get storm protection from the reef have taken out the policy to pay for damage caused by hurricanes. After storms, the reinsurer will make quick payouts for repairs to the reef and beaches. The healthier the hotel owners keep the reef, the lower their insurance costs. “Instead of taxpayers and citizens absorbing the cost of all kinds of natural disasters, including climate events,” Swiss Re’s Alex Kaplan told Bloomberg, figure out a way to quantify the risk “and then push it out into the private market.”

Climate risks are increasingly quantifiable. For every meter of height the reef loses, potential economic damage from hurricanes triples, according to The Nature Conservancy, which helped design the scheme. More than two dozen countries are protected by and dependent on coral reefs, and the model could also be used for mangrove forests and coastal wetlands, says The Nature Conservancy’s Kathy Baughman McLeod.

Such climate adaptation financing figures to be a major business in the decades ahead. But, she warns, “none of this works until this money gets spent in the right way and the reef is repaired and protected.”

You might also like...