First insurance-funded baby corals growing in the wild
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Settlement substrates with growing baby coral (Paul Selvaggio)
Protecting our underwater treasures to promote coastal resilience
In 2019, the so-called Coastal Zone Management Trust Fund, established by The Nature Conservancy and the local governments with help from insurance company Swiss Re became operational. The idea is simple: local hotels pay a tax for the insurance premium and regular reef maintenance into the trust fund. When a major hurricane hits the coast, a parametric insurance policy is triggered, and its payments cover short, medium, and long-term responses to restore and protect the reef.
The insurance scheme is specifically designed for a quick response after a storm that results in significant damage to corals and to the reef. Usually, assessors would evaluate the damage first and calculate the payout, a process that can take many months and even years. A parametric insurance policy, however, is automatically triggered by specific pre-set parameters, like wind speed and duration in this case. This model aims to ensure that funding is immediately available to take action as soon as possible, helping to repair coral reefs along the northern section of the Mesoamerican Barrier Reef while protecting the local US$10 billion tourism industry, which relies on this vital ecosystem.
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Wave-breaking elkhorn coral (Paul Selvaggio), Coastline along Puerto Morelos (Lucas Ney), Reef crest absorbing wave energy (Alex Wigan)
Intact coral reefs can absorb up to 97% of the incoming wave energy, functioning as a natural coastal defense during storms and hurricanes that would otherwise have devastating impacts on hotels, resorts, businesses, and private homes in the region. By absorbing the storm´s energy coral reefs reduce beach erosion and thus lower the risk of damage to coastal infrastructure. However, most reefs are in dire condition due to many stressors associated with anthropogenic climate change. On top of that, storms and hurricanes can significantly affect coral cover by causing entire coral colonies to overturn or break into smaller pieces. This leads to a reduction in the height of shallow coral reefs. In fact, a one-meter loss in coral height can double the damage to assets and infrastructure along the shoreline.
Our partner in Mexico, Dr. Anastazia Banaszak, who is the lead scientist at the Coralium Lab, says, "it is gratifying that the government and politicians now realize how important coral reefs are. So important that they should be insured!" She is "proud that Coralium and SECORE have been selected in a pretty competitive environment to participate in this project, especially because we do things differently. We are raising baby corals from wild-caught spawn whereas most of the restoration work that gets done in the Mexican Caribbean is based on growing coral fragments."
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Dr. Anastazia Banaszak and the Coralium Lab x SECORE team (Paul Selvaggio)
Dr. Banaszak explains, "the goal is to get the reefs healthy, and the best way to achieve this is by rearing large numbers of baby corals from wild-caught spawn to help promote the genetic diversity of coral populations. For the first time, we've trained a post-storm response team, a reef brigade, in the sexual reproduction of corals, and that knowledge is now part of the brigade training manual. This is a great additional achievement, as it allows us to highlight the relevance of our methods."
In 2020, the first insurance event occurred. Hurricane Delta, a category two storm, hit the coast of Quintana Roo and severely damaged the reefs. Consequently, the parametric insurance policy was triggered, and a total of nearly US$ 800,000 was paid out to the collaborating non-profits through the trust fund to repair the reef in four zones: (1) Cancún, (2) Puerto Morelos, (3) Cozumel, and (4) the Mexican Caribbean Biosphere Reserve, where Coralium and SECORE are actively involved. "Each area has its own brigade to act immediately in its zone, removing debris, collecting broken coral fragments, and saving displaced corals after a storm," describes Dr. Banaszak.
As part of the medium- and long-term responses to reef damage, "we've outplanted numerous baby corals with a part of the awarded funds, and along with other grants, we've been able to make our coral culturing facility bigger," explains Dr. Banaszak. Right after the storm, Coralium and SECORE "actually had baby corals in stock, and the team could start immediately to outplant some of those." She also emphasizes that "we're trying to incorporate more species, and our efforts in spawning work have resulted in even more baby corals last summer that have been outplanted onto different reefs."
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Settlement substrates with growing baby corals to be outplanted (Paul Selvaggio)
"With more hurricanes, we theoretically could get additional funding. But let's not hope for that. I'd rather look for money from other sources to keep our restoration work going and to build it up to be even stronger," says Dr. Banaszak. This is particularly important since there are many other causes for coral decline, like climate change, overfishing, and pollution, which are not covered by the insurance policy.
According to Dr. Banaszak, the biggest drawback of the insurance could be the false notion that "if damage occurs, the reef can be easily restored," leading to a potential rebound effect. Despite this, she says, "I am still optimistic and believe that the trust fund is a fantastic opportunity for progress. We're already making a real difference to get the reef healthy."
For the first time ever, an innovative insurance policy has helped to fund coral reef restoration projects, marking a significant milestone in the global efforts to protect our underwater treasures. Beyond the insurance project, and together with our long-term partner Dr. Anastazia Banaszak and her Coralium Lab, we will keep doing what we do best – rearing as many baby corals as possible to bring life back to the reef!
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The Coralium Lab x SECORE team outplanting baby corals near Puerto Morelos (Paul Selvaggio)
