A coalition comprising AXA Colpatria, AXA Climate, Fondo Acción and WTW Alternative Risk Transfer has developed a parametric insurance programme to safeguard the marine ecosystem. 

The programme targets the Colombian Archipelago of San Andrés, Providencia and Santa Catalina, offering protection against hurricanes. 

The Archipelago, recognised as a UNESCO World Heritage Site and Biosphere Reserve, is of significant ecological and climatic importance, encompassing around 10% of the Caribbean Sea. 

It is a biodiversity hot spot with more than 250 fish species and almost 60 coral species. 

The joint initiative has resulted in a parametric insurance mechanism that is triggered by specific conditions, such as reaching certain wind speeds.  

To enhance disaster response, 45 local individuals including fishers, divers and community leaders have received training.  

A local response committee has also been established to maintain governance and the prompt allocation of resources when needed. 

AXA Climate senior parametric underwriter Virgil Salmon said: “This model could, for instance, trigger an automatic payout of 80% of the insured value in a scenario similar to Hurricane Iota, with funds used directly for reef restoration.”  

WTW Latam/CAC Alternative Risk Transfer Solutions director Juanita Blanco stated: “This solution is providing coverage for biodiversity in ways that traditional indemnity insurance simply can’t. 

“We are proud to have created and developed this programme for San Andrés, Providencia and Santa Catalina, helping to preserve the ecosystem – especially the coral reefs – that support the island’s life, tourism and economy.” 

Earlier this month, AXA agreed to purchase a 51% stake in Italian direct insurer Prima for €500m ($578m).