Insurance could cost-effectively help protect and restore mangrove forests, which can offer increased resilience and protect against coastal flooding according to a report published by The Nature Conservancy and University of California and supported by AXA XL.
The report, Reducing Caribbean Risk: Opportunities for Cost-Effective Mangrove Restoration and Insurance, identifies 3,000 km of coastline in the Caribbean region where post-storm mangrove restoration, which could be paid for by insurance and other mechanisms, would provide flood protection benefits that significantly outweigh the cost of mangrove rehabilitation.
The report says that although the US and the Bahamas have the most robust insurance markets, mangrove forests’ protective benefits are also significant in the Dominican Republic and Jamaica due to their high population densities.
Mangroves can be found in over 118 countries and territories in the tropical and subtropical regions of the world. Asia has the largest coverage of the world’s mangroves, followed by Africa, North and Central America, Oceania and South America. Approximately 75% of the world’s mangrove forests are found in just 15 countries.
AXA XL director of sustainable development Chip Cunliffe said, “As part of our Ocean Risk Initiative, we’re looking to develop insurance and finance products that incorporate nature-based solutions - including mangroves - to help close the protection gap and build resilience at local, regional and global levels.
“In line with AXA Group’s focus on climate and biodiversity, we are using our risk management expertise to look for new ways to reduce community vulnerability to coastal flooding, which is expected to increase as sea levels rise. A specific mangroves solution could provide effective protection to coastal communities.”
University of California Professor Michael Beck said, “With increasing sea levels and waves, more communities will be exposed to impacts from extreme weather. Mangroves provide a cost-effective first line of defence protecting people and property from these hazards.”
The Nature Conservancy, which helped develop and launch the first coral reef insurance policy off Quintana Roo in Mexico, is helping lead this new approach.
Nature Conservancy director of coastal risk and resilience Mark Way said, “We are about to begin a second phase of research to build on this report and deepen our understanding of technical aspects and the potential demand for an insurance product to protect mangroves in particular locations in the Caribbean.”
The report suggests that a parametric insurance policy based on wind speed is most feasible and could be paired with a traditional indemnity policy to cover both short-term and longer-term restoration actions. The funding source(s) and beneficiaries of the programme, whether public or private bodies, will significantly influence how a mangrove insurance scheme is structured. A