The Nature Conservancy: Insuring Hawaii’s Iconic Reefs

Did you know that coral reefs and marine resources are critical for Hawaii’s coastal protection?

Each year coral reefs support nearshore fisheries, while providing flood protection to people and helping to avoid direct flood damages to buildings and indirect damages to economic activity.

The continued loss of these ecosystems will compound the impactsof climate change: it has been estimated that the loss of just one metre in the height of coral reefs worldwide would more than double the annual flood damages (Beck et al. 2018).

In 2022, the Howden Foundation furthered its relationship with global environmental organisation, The Nature Conservancy (TNC), by supporting the establishment of the first U.S-based coral reef insurance policy to preserve Hawaii’s valuable biodiversity and ecosystems.

Through this multi-year partnership, the Foundation provided funding for TNC to purchase parametric insurance (insurance that is designed to pay a predetermined amount of money when specific conditions are met through a damaging event, in this case a hurricane) that will provide protection against coral degradation.

Longer term, it is hoped that this pilot will demonstrate that naturebased insurance is a tool that can help other communities protect against the social and economic effects of increasing climate related disasters.

A form of protection that incentivises risk-reducing behaviour and reduces vulnerability and, in the event of a disaster, a tool that will increase humanitarian funding worldwide.

The Howden Foundation first partnered with TNC in 2020 to support its vital work building natural climate solutions that protect and restore some of the planet’s most vulnerable forest in Africa.

$836m - The combined avoided damages are valued at approximately $836m in Hawaii (Storlazzi et al. 2019)

75% - of the world’s coral reefs are currently rated as threatened, a number projected to increase to almost 100% by 2050 (Burke etal. 2011, Hoegh-Guldberg 2017)

$2m - In the event of a hurricane, this insurance will provide up to $2m per year to finance the repair of critical coral reef and build local capacity and expertise to ensure these improvements in Hawaii’s reefs will endure