In this episode of Deeply Talks, Todd Woody, News Deeply’s executive editor for environment, talks with experts at The Economist’s World Ocean Summit in Mexico about a public-private consortium that is taking out the world’s first insurance policy on a coral reef – a 37-mile (60-km) section of the Mesoamerican Reef off Mexico’s Yucatan peninsula. Todd is joined by two experts from the Nature Conservancy: Fernando Secaira, director of climate and risk resilience in Mexico; and Mark Way, corporate climate lead.

Second only in size to the Great Barrier Reef, the Mesoamerican Reef shelters an array of marine life while protecting a coast home to a $9 billion tourism economy from hurricanes.

“The Mexican Caribbean is exposed to hurricanes, and therefore the reef barrier protects the coastal area – particularly the 100,000 hotels that are in the Mexican Caribbean,” said Secaira.

But that barrier is disappearing. Over the past two decades, pollution, disease, bleaching and hurricanes have resulted in the degradation or loss of 80 percent of the Mesoamerican Reef’s live coral cover. “We have to contain that,” said Way. “There are reefs that are still there. There are corals that are still there, but they’re in a very dangerous situation now.”

On March 8, the Nature Conservancy and the government of the Mexican state of Quintana Roo announced the creation of the Coastal Zone Management Trust, which will purchase the first insurance policy on the coral reef.

If a Category 4 or 5 hurricane strikes within a defined distance of the reef, the insurance policy will immediately pay out damages to fund the repair and restoration of the corals. Way said enlisting the support of the local hotel owners association and local, state and federal officials for the coastal trust was key.

“I don’t think that there was any kind of hard sell from our side,” said Way. But it might be harder to sell to other governments around the world because a coral reef insurance policy is a brand new concept.

“We’re looking at ways in which we can engage governments effectively – to build their capacity, to build their understanding of why this approach is worth their time and effort,” said Way.

“We have now a concrete example that has been approved, officially, by a state government,” he added. “I think that gives the whole approach a lot of additional credibility and will help build interest in it from other countries with reefs.”