Reef Resilience Financing Mechanisms in the Caribbean

Coral reefs fringing the Caribbean coastline are critical natural defences against some of the region’s most pressing climate threats, including sea level rise, storm surges, beach erosion, and wave damage. Beyond their protective function, reefs underpin the livelihoods of millions, particularly in vulnerable communities that rely on reef-related tourism and fisheries for employment, income, and sustenance. But despite their immense value, coral reefs remain undervalued and underfinanced, especially in the wake of extreme weather events, where public resources tend to focus on grey infrastructure and property restoration rather than natural ecosystems.

To tackle these challenges, the Caribbean Biodiversity Fund (CBF) is leading the development of a regional reef insurance programme funded by the InsuResilience Solutions Fund (ISF). Acting as the insurance policyholder, the CBF will coordinate post-hurricane reef response efforts with the support of four National Conservation Trust Funds (NCTFs) in the Dominican Republic, Jamaica, Saint Lucia, and St. Vincent and the Grenadines, which will serve as payout distribution partners. These NCTFs will channel funds to local organisations responsible for carrying out rapid reef restoration activities.

On the supply side, global (re-)insurance broker Willis Towers Watson (WTW) will lead on product design, marketing, placement, and claims management. The Mesoamerican Reef Fund (MAR Fund) will contribute strategic and technical expertise to ensure the solution is ecologically grounded and regionally tailored.

The objective of the project is to establish an efficient, sustainable mechanism for financing post-storm reef restoration. This shock-responsive solution will provide rapid liquidity to enable immediate response activities at reef sites across the Caribbean. Once a hurricane reaches a predefined wind speed threshold near an insured site, at which coral damage is highly likely, a payout will be automatically triggered. The CBF will then distribute funds via its regional NCTF network to facilitate timely intervention and minimise long-term ecological and economic losses.