Willis Towers Watson, the London-based advisory, broking and solutions company, has developed the Global Ecosystem Resilience Facility (GERF), which it describes as the first global insurance facility to provide finance and risk management solutions to build the resilience of ecosystems and the communities they support.
The GERF is being launched today at the Economist’s World Ocean Summit in Mexico by Willis Towers Watson CEO John Haley.
Marine ecosystems are at risk, and damage to natural capital, such as coral, mangroves and fisheries, reduces the protection of coastal communities, their economies and assets in emerging and developing countries, said WTW in a statement.
“As more intense storms, floods, droughts, sea level rises, temperature increases, pollution and ocean acidification increase the vulnerability of coastal communities and threaten both lives and livelihoods, it is critical that the resilience of the environment that supports them is strengthened,” said the broker.
Drawing upon expertise across Willis Towers Watson with scientific partners and leading risk carriers, the GERF will help respond “to these growing risks by delivering powerful analytics, incentivizing environmental stewardship and providing innovative insurance protection to mobilise development finance,” the company added.
Initial work of the GERF focuses on the protection of ecosystems such as coral reefs, mangroves and seagrasses in the Caribbean to support resilience of fishing communities at threat from hurricanes and coral decline, it said.
Discussing the GERF’s initial work in the Caribbean, Willis Towers Watson, along with Cefas and the University of York, are mapping marine ecosystems, assessing risk exposure, and developing risk and value models for coral reefs in Grenada and the wider Caribbean.
The GERF will then incentivize ecosystem stewardship and asset maintenance through risk finance, WTW said, explaining that insurance programs will be structured to encourage risk understanding, assessment, and the coordination and pre-planning of swift post-event recovery.
“Robust disaster risk management and contingency planning can be incorporated to protect the vulnerable against events that are beyond their control,” noted the company. “The GERF will facilitate risk pooling to help regions bridge the post-disaster funding gap and provide a targeted, structured response to coastal communities and infrastructure, ecosystems and fisheries, in particular.”
“The Global Ecosystem Resilience Facility is such an important initiative in helping to support the resilience of coastal and island communities to climate pressures,” said John Haley, CEO of Willis Towers Watson.
“Dependence on the blue economy makes them particularly vulnerable to the impacts of climate related threats and other risks, and the goal of this ground breaking initiative is to help provide greater stability, and ultimately greater prosperity, to these communities,” he went on to say.
“The GERF acknowledges that there are two key aspects driving changes in the risk environment: human activity and natural processes,” commented Rowan Douglas, CEO of Willis Towers Watson’s Capital, Science & Policy Practice. “The facility aims to address these two aspects; communities build resilience through sustainable practices under their control, and disaster risk finance protects against events outside of their control.”
The financing element of the GERF focuses on risk transfer and project finance. The risk transfer element looks specifically at risk pooling, and the project finance element examines the suitability and feasibility of a variety of financial instruments including catastrophe bonds, resilience bonds, grants, and loans, WTW explained in a statement.
Source: Willis Towers Watson
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Topics Willis Towers Watson
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