Guiding Insurance Instruments to Leverage Natural Infrastructure for Climate Change Resilience

Coral reefs have been observed to weaken wave energy by an average of 97%, helping to protect coastal populations from storm surge and flooding. Apart from the protection provided by coral reefs, coastal communities also benefit from the ecological services (co-benefits) of corals, including tourism, recreation, fishing, research, and education. Our analysis will compare the economic value associated with these co-benefits to the cost of coral reef restoration and maintenance.

The Nature Conservancy has enlisted this group project team to help determine whether investments in natural infrastructure could lower insurance costs to hoteliers and coastal development sites. Policyholders could receive premium discounts once risk-reduction effectiveness is confirmed. Our analysis will help TNC identify areas where this type of insurance instrument can be most effective.

We will analyze the costs and benefits that hoteliers and coastal property owners could expect from investing in natural infrastructure, and provide a comparison to the costs of equivalent grey infrastructure, such as submerged seawalls and levees.