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Ecosystem insurance begins with Mexican coral reef

by Futures Centre, Aug 22
1 minute read

A 64-kilometre stretch of coral reef along the coast of Mexico will be the first to receive its own insurance policy when a group of beachfront hotels and other local businesses dependent on tourism begin paying premiums to insurance company Swiss Re this September. In the event of a severe storm, Swiss Re will quickly release automatic payouts to these businesses to support them in restoring and rehabilitating damaged portions of the reef.

This insurance scheme has come into being following the recognition that the coral reefs are instrumental in preventing flooding and coastal erosion caused by storms, which constantly create huge costs for affected communities in this stretch of coastal Mexico. The investment of local businesses into ecosystem services such as coral reefs might turn out to be more cost-effective than artificial seawalls: a healthy reef can reduce a wave’s energy by 97% before it reaches the shore.


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