Global advisory, broking and solutions company WTW has introduced a parametric insurance policy to help protect the coral reef system of the South Pacific Ocean’s Lau Group of islands.
Supported by BHP through social investment funds, WTW worked with Fiji’s Vatuvara Foundation (VVF) to create an insurance product for a sub-set of the Lau Islands.
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This programme will allow payouts to be deployed at the most critical time to help them withstand the adverse impacts of cyclones and effectively manage natural resources to ensure the resilience of the ecosystems themselves.
Collaborating with WTW and the local correspondent broker Insurance Holdings, VVF has chosen insurer PCRIC to provide the policy after a competitive placement process.
In addition to enabling VVF-led rapid reef response activities such as reattaching broken corals and debris clean-up, the insurance payouts will provide community assistance activities that will alleviate food and water security concerns caused by storm damage. This will help prevent the overharvesting and further degradation of Lau’s coral reef system during a community’s recovery from a cyclone and enhance both community and reef resilience.
Sarah Conway, director and ecosystem resilience lead, WTW, said: “We are grateful to BHP for supporting the design and implementation of the first coral reef insurance programme in Fiji. Building on lessons learned from our involvement with similar initiatives in other countries, this programme provides an exciting opportunity to innovate beyond rapid reef response to also include community assistance, enhancing the resilience of the ecosystem and those who depend on it.”
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By GlobalDataKaty Miller, director, Vatuvara Foundation, added: “We are thankful that the innovative parametric policy will allow for the prompt access to funds following a destructive cyclone event to identify reef damage and assist reef recovery with a community-led team in Northern Lau. Increased frequency and severity of extreme weather events is expected in the area, and protecting natural ecosystems in the Lau Group is crucial to build long-term community resilience to anthropogenic threats including climate change.”
Ashley Preston, head of climate resilience, BHP, continued: “BHP is funding an innovative parametric insurance product, which aims to support the conservation of coral reefs and surrounding local communities in Fiji’s northern Lau Group, and build the knowledge base for how similar financial products could be used to improve climate resilience. We are pleased to work with WTW and Vatuvara Foundation on this project, which supports BHP’s commitments to action on climate, conservation and empowering communities.”
PCRIC CEO, Aholotu Palu, explained: “PCRIC is very pleased to demonstrate its commitment to serve non-sovereign entities with innovative parametric insurance products, in line with PCRIC’s mission to help the island communities of the Pacific to better prepare, structure and manage finances to foster disaster resilience and ensure rapid access to funds; the work of the Vatuvara Foundation, both in reef conservation and in local community empowerment, is recognised by the Government of Fiji as being in the national interest and consistent with development priorities, particularly the Blue Pacific Strategy, as well as commitments to climate change adaptation and disaster risk management.”
