Insurance for Philippine Coral Reefs

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The Philippines is part of the Coral Triangle, a region that hosts over 500 species of coral and 3000 species of fish.

Bursting with life and abundance, coral reefs are the sunken ‘treasure chests’ of biodiversity.

One in four of all known marine organisms live in or around a coral reef.

Reefs, however, aren’t the toughest of ecosystems. Corals in particular are vulnerable to temperature shifts.

Too cool? They get sick. Too warm? They might purge the symbiotic, life-giving algae that give them color.

Bleached corals eventually die if temperatures don’t return to normal.

Australia’s Great Barrier Reef, the world’s largest, was hard-hit by warming seas in 2024, with roughly 80 percent of its constituent reefs affected.

Among the top threats to coral reefs are climate change, pollution, destructive fishing practices, storms, earthquakes, ship strikes and volcanic eruptions, especially in countries like the Philippines with many active volcanos (just look at Mount Mayon now).

“A single typhoon, earthquake or bleaching event can spell the difference between life and death for many reefs,” explains Dr. Hazel Arceo of the University of the Philippines Cebu.

“Considering the reported loss of about one-third of our corals in the last decade, Philippine coral reefs are in decline. To continue reaping the benefits of our natural resources, we must find ways to safeguard them from external threats.”

Insurance for Marine Protected Areas

Since 2025, the United Nations Development Programme’s Biodiversity Finance Initiative (UNDP-BIOFIN), the UNDP Insurance and Risk Finance Facility (UNDP-IRFF), the Department of Environment and Natural Resources (DENR) and allied agencies have been assessing the viability of nature-based insurance products to help coral reefs and other vital ecosystems recover from natural and manmade calamities.

“Insurance, as a form of risk transfer, can bolster the resilience of marine protected areas (MPAs) plus our other parks and protected areas, especially when combined with traditional risk reduction and mitigation measures. It’s a management tool that has rarely been tapped for conservation,” says Anabelle Plantilla, national project manager for UNDP-BIOFIN in the Philippines.

Though known to most Pinoys as a financial safety net when accidents or illnesses occur, insurance can take many forms and has been a part of human society since the era of the ancient Babylonians.

At its core, insurance is a contractual agreement where entities pay premiums to an insurer that provides financial protection or reimbursements for specific, defined losses.

“The insurance industry would be happy to be a part of this and to continue the conversation. We’re more than just businesses after all,” says Mitch Rellosa, executive director of the Philippine Insurers and Reinsurers Association (PIRA), the umbrella organization unifying the 54 member companies that cover domestic non-life insurance in the Philippines.

Using Negros Oriental’s Mantalip Marine Reserve as a hypothetical example, UNDP-BIOFIN and its partners are exploring the feasibility of non-life insurance products for Marine Protected Areas (MPAs) and other protected areas to support the global 30 x 30 Target, which aims to protect 30 percent of the planet’s land and ocean areas by 2030.

The Philippines hosts over 1800 MPAs, but only around 30 percent are effectively managed.

Previously targeted by illegal blast fishers, Mantalip Reef became an MPA in 2003.

Spurred by good enforcement, fish and corals returned to improve the lives of locals.

From a paltry average of two kilogrammes in 2012, Mantalip’s 700 subsistence fishers saw their yields increase to seven kilogrammes per day.

The resurgence of biodiversity also attracted droves of tourists, who brought in around PHP300,000 of revenues in 2017 alone.

But then, Odette happened.

Smashing the Philippines in December 2021, the category-five super typhoon left 36 million homes damaged and over 400 people dead.

Coral reefs, forests and other ecosystems were similarly battered. Mantalip Reserve’s hard coral cover plummeted from 60 percent to just 5 percent after Odette.

Even the park’s longstanding visitor center – a reinforced concrete platform that had weathered the worst storms of the past two decades – was severely damaged.

Exploring insurance systems for such damages might help Mantalip and many other Philippine coral reefs bounce back after typhoons, ship groundings and other natural or manmade calamities.

“Protecting our marine ecosystems is not just an environmental imperative, but an investment in the well-being, resilience and prosperity of our entire country. Nature-based solutions like MPA insurance provide us with pathways to bridge ecological conservation and that elusive sustainable economic development,” adds Mariglo Laririt, assistant director of the DENR’s Biodiversity Management Bureau (DENR-BMB).

Other types of conservation-centric insurance strategies are also being pilot-tested, from an insurance policy covering jaguar mortalities of pets and livestock in Argentina to a parametric insurance policy to recoup lost fishing days of small-scale fishers in the Philippines.

With the participation and support of insurance corporations and other forward-thinking private-sector partners, insurance might become a part of protected area management.

Tomorrow’s coral reefs might finally have a financial safety net whenever a storm or earthquake barrels through.

“We should realize that, in the end, every single investment we make is dependent on nature,” concludes Abbie Cruz-Trinidad, senior technical advisor for UNDP-BIOFIN.

“Since we reap so much from coral reefs and our other ecosystems, shouldn’t it make good business sense to insure and protect them?”