Global Parametrics, a provider of parametric protection against climate risks and natural disasters, has led the renewal of the $1.9 million Mexican Reef Protection Programme, alongside Grupo Financiero Banorte and Hannover Re.
Global Parametrics structured a parametric solution that pays out to support the rapid restoration of a key section of the Mesoamerican reef by the state of Quintana Roo on the Yucatan peninsula following a tropical cyclone event. It is believed to be the first risk transfer product for a coral reef to help to preserve biodiversity.
Global Parametrics’ structured the deal with Mexican partner LegaRisk, which was issued locally as a parametric insurance product between the regional government of Quintana Roo and Grupo Financiero Banorte. Hannover Re acts as the reinsurer and shares the risk with the Natural Disaster Fund.
The Mexican Reef Protection Programme was established in 2018 by a number of private, public and international stakeholders. It is one of the first examples of a nature-based solution on a coral reef, enhancing and protecting an environmental asset by providing the funds for rapid restoration, whilst also mitigating the impact to the local economy.
The Mesoamerican reef is the longest barrier reef in the western hemisphere and habitat for some of the world’s most important aquatic biodiversity. It is also a pivotal tourism hub and a primary source of local employment and income. Every year the state of Quintana Roo receives over 12 million tourists, generating an estimated $9 billion in revenue and providing an estimated 148,300 jobs.
Juan Marcano, head of Global Parametrics’ Latin America and Africa operation, described the programme as “a key example of a nature-based solution to the impacts of the climate emergency.”
Jose Landaverde, chief executive of Seguros Banorte, the insurance subsidiary of Grupo Financiero Banorte, added: “After the hurricanes that occurred in 2017, the Caribbean region is the most interested in parametric insurance, and we are committed to offering the solutions they require.”
Henning Ludolphs, managing director at, Hannover Re, said: “Hannover Re’s commitment to increase access to insurance products is an element of our sustainability strategy. The Mexican Reef Protection Programme is a valuable tool in the ongoing efforts to use nature based solutions as an effective method of mitigating the impact of climate risks and natural disasters.”
Global Parametrics, Mexico, Grupo Financiero Banorte, Hannover Re, Juan Marcano, Jose Landaverde, Henning Ludolphs