In partnership with ClimateSeed and AXA Seguros Mexico, AXA Climate has developed an innovative parametric insurance product to protect the community of fishermen responsible for the restoration of San Crisanto mangrove forests against the impacts of hurricanes.
In the event of a natural disaster, this insurance guarantee will provide rapid financing in order for damaged mangrove forests to be restored, as well as the repairs of related infrastructure linked to fishing or ecotourism.
Mangrove forests are abundantly rich ecosystems which play a key role in addressing the challenge posed by climate change. They reduce the impact of coastal flooding and support areas very rich in biodiversity (crabs, molluscs, fish, birds, etc.), which protects and provides for local communities. Furthermore, they are powerful carbon sinks, storing up to four times more carbon than tropical forests.
However, today mangrove forests are being undermined by fish farming, coastal urbanization, pollution, and natural disasters. It is estimated that more than 35% of mangrove forests have disappeared during the course of the last twenty years, even reaching more than 70% in certain areas.
The new product responds to a specific protected area in Mexico. As soon as a hurricane sweeps through the protected area, compensation of up to $100,000 is triggered automatically. Its amount varies according to the wind strength and proximity to the core of the protected area.
Compensation will be sent straight to the policyholder, namely the local community, in order to support repair efforts following on from damages caused by the hurricane. This process will support the regeneration of a thriving ecosystem while still ensuring the sustainability of the carbon offsets which are associated with it.
‘‘This instance of inter-company collaboration between AXA Climate, AXA Seguros Mexico and ClimateSeed represents a great example of synergy’’, said Antoine Denoix, CEO of AXA Climate. ‘‘With this initial parametric insurance guarantee hinging on the restoration of mangrove forests, we’re taking an innovative step to serve local communities whose survival is intrinsically linked to these forests.’’
“Parametric coverage has been very useful in Mexico to provide resources and face natural disasters. During Hurricanes Otis and Lidia, the small businesses covered under Ayuda Express Huracán received $10,000 MXN within 72 hours, and more than 1,430 farmers received $2,200 MXN per hectare damaged during Hurricane Agatha in 2022. These are examples of how this type of insurance responds quickly to the needs of the clients”, added Daniel Bandle, CEO of AXA Seguros Mexico.
According to Sébastien Nunes, CEO of ClimateSeed: ‘‘Since 2020, ClimateSeed has been a partner of the San Crisanto Foundation, to which it has provided its support through providing the necessary financing for the project. Thanks to the collaboration with AXA Climate and AXA Seguros Mexico, we are today celebrating a new phase in the partnership which will enable the Foundation to further overcome the financial obstacles and continue with its commitment to the conservation and restoration of mangrove forests.’’