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Carib - Parametric hurricane insurance programme to cover Mesoamerican Reef

The Mesoamerican Reef system which lies in the Caribbean Sea, touching the coasts of Mexico, Belize, Guatemala and Honduras, is set to benefit from an innovative parametric insurance program to protect the reef and communities that rely on it against hurricane impacts.

The Mesoamerican Reef system which lies in the Caribbean Sea, touching the coasts of Mexico, Belize, Guatemala and Honduras, is set to benefit from an innovative parametric insurance program to protect the reef and communities that rely on it against hurricane impacts.

Dubbed a “world-first post-hurricane insurance protection”, the parametric insurance product will see payouts triggered by hurricane intensity.

The measured intensity of a hurricane will be converted into an estimate for the extend of damage to the reef, using a reef specific risk model.

A group policy will cover a number of pilot reef sites,in in Mexico, Belize, Guatemala, and Honduras, with a bespoke pay-out structure designed to represent the cost of response at each reef site at different damage levels.

The initial pilot phase of this parametric reef insurance programme is expected to enhance the climate resilience of almost 2 million beneficiaries.

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