Trend Parametric insurance for ecosystems to finance nature restoration

Summary

The report sees ecosystem insurance emerging as a key tool for funding the restoration of natural areas as extreme weather grows more frequent and intense. Most policies so far cover reefs and mangroves, because the tools for quantifying storm damage to these ecosystems are the most advanced. Funding usually comes from partnerships between local governments and private actors in affected areas, such as the most exposed businesses and NGOs. Unlike conventional insurance, payouts are triggered automatically, without further paperwork, once a hurricane or wind reaches a set intensity. Europe has no such policies yet, though several projects are studying their feasibility, and in Spain posidonia meadows, salt marshes, estuaries and coastal dunes on the Mediterranean and Atlantic are candidates. The report treats nature as a strategic asset whose long-term value underpins future wellbeing.