The Government of Indonesia, UNDP and Swiss Re have come together to setup a Marine Biodiversity Trust to create insurance solutions for coral reef protection and restoration in Indonesia.
According to a news release by UNDP, the foundation for the Trust was laid in November 2024 when the Indonesian ministry of marine affairs and fisheries issued a new regulation for the purpose of financing sustainable marine and fishery programmes.
UNDP supported the preparation of the Ministerial Regulation No. 27 on the Implementation of Funding for Sustainable Programmes in the Marine and Fisheries Sector. The Marine Biodiversity Trust will be managed through the Indonesian Environmental Fund Management Agency (BPDLH) - the country’s official mechanism for overseeing environmental and climate-related funds.
The Trust will serve as a critical governance mechanism for financing coral reef insurance coverage for the Gili Islands. This will also enable the development of a long-term insurance solution for coral reef protection and restoration in Indonesia’s Gili Matra Islands (Gili Meno, Gili Air, and Gili Trawangan).
Local government and communities will be consulted to ensure that approaches used are appropriate and responsive to their needs. Swiss Re has now completed its collection of data from the Gili Islands and the design of the parametric coral-reef insurance product is underway.
Coral ecosystems across Indonesia include the world’s richest diversity of coral species at 72%. These reef systems support the livelihoods of millions of people in the country through tourism, agriculture, seaweed cultivation, fishing, and aquaculture.
Indonesia’s coral reefs contribute over $3bn annually to the economy but are increasingly degraded by fishing and tourism activities. Indonesia is also ranked as world’s second highest vulnerable nation to natural hazards, with coastal regions being home to many low-income communities who bear the brunt of the impacts of disasters. Healthy coral reefs, however, are natural buffers against waves, storms, and floods, helping to prevent loss of life, property damage and erosion.