Mangrove Insurance: A Dual Approach to Boost Coastal Resilience

The Role of Mangroves in Mitigating Storm Damage

Mangrove forests have long been recognized for their ability to mitigate tropical storm damage. Their aerial roots help reduce erosion and dissipate storm surge, making them the first line of defense in many coastal areas. For instance, during Hurricane Irma in 2017, mangroves in Florida prevented $1.5 billion in direct flood damages and protected over half a million people, reducing damages by nearly 25% in counties with mangroves. Globally, mangroves actively prevent more than $65 billion in property damage and protect over 15 million people every year.

Parametric Insurance: A Rapid Response to Catastrophes

Parametric insurance offers a rapid response to catastrophes by paying out if certain agreed-upon conditions are met, such as a specific wind speed or earthquake magnitude in a particular area. This type of insurance eliminates the need for adjusters to assess damage after a catastrophe, speeding up the payment process and reducing administration costs. The Nature Conservancy study describes the implementation of a coral reef insurance product in Quintana Roo, Mexico, which could serve as a model for mangrove preservation.

Indemnity Insurance: Post-Catastrophe Assessment

Unlike coral reefs, mangroves do not usually require rapid post-storm interventions to survive, making indemnity insurance a viable option. This type of insurance delivers payments based on post-catastrophe assessments of mangrove damage. Combining parametric and indemnity insurance could provide a comprehensive solution for mangrove preservation. However, before a mangrove insurance policy can be developed and deployed, a full feasibility study is necessary, including higher-resolution flood-risk models and the construction of fragility curves.

For readers interested in coastal resilience, it's crucial to stay informed about innovative insurance solutions and support research that enhances our understanding of natural defenses like mangroves. By doing so, we can better protect our coastal communities and ecosystems.