Reinsurance News

Willis launches re/insurance industry’s first Global Ecosystem Resilience Facility

9th March 2018 - Author: Matt Sheehan

Willis Towers Watson has launched its newly developed Global Ecosystem Resilience Facility (GERF), the first global insurance facility to support the resilience of ecosystems with innovative finance and risk management solutions.

Willis logoLaunched by Chief Executive Officer (CEO) John Haley at the Economist’s World Ocean Summit in Mexico, the GERF will provide powerful analytics, incentivise environmental stewardship and offer innovative insurance protection to mobilise development finance.

Additionally, the GERF will facilitate risk pooling to help regions bridge the post-disaster funding gap (disparity between economic and insured losses post-event), and will focus on providing targeted, structured responses to communities dependent on at-risk ecosystems

Initially, the facility will focus on supporting coastal communities in developing and emerging countries that rely on vulnerable marine ecosystems and natural capital like coral reefs, mangroves, seagrasses, and fisheries.

The lives and livelihoods of these communities are increasingly threatened by more intense storms, coral decline, floods, droughts, sea level rises, temperature increases, pollution and ocean acidification, and so it is vital that the resilience of these environments is supported.

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Insurance and reinsurance broker Willis is already working with Cefas and the University of York, as well as other scientific partners and leading risk carriers to map marine ecosystems, assess risk exposure, and develop risk and value models for coral reefs in the Caribbean.

The GERF will then implement insurance programs that encourage risk understanding, assessment, and post-event recovery planning, and will use risk finance to incentivise ecosystem stewardship and asset maintenance.

Speaking at the launch, Haley said: “The Global Ecosystem Resilience Facility is such an important initiative in helping to support the resilience of coastal and island communities to climate pressures.

“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.”

Rowan Douglas, CEO of Willis Towers Watson’s Capital, Science & Policy Practice, added: “The GERF acknowledges that there are two key aspects driving changes in the risk environment: human activity and natural processes. The facility addresses both aspects; communities build resilience through sustainable practices under their control, and disaster risk finance protects against events outside of their control.

“The Global Ecosystem Resilience Facility allows for the financing of increased resilience at a large scale. This global approach is key to building a sustainable blue economy and protecting coastal communities from climate impacts. We are proud to lead the way in the development of innovative mechanisms to extend financial protection to ecosystems and to incentivise sustainable growth.”

The risk transfer elements of GERF will focus specifically on risk pooling, while the project finance elements will consider catastrophe bonds, resilience bonds, grants, and loans as potentially suitable options.

This project is the first of its kind to combine support for local climate mitigation and adaption with global approaches to financing the resilience of the marine environment and sustainable development of the blue economy.

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