PLAYA DEL CARMEN, - Dozens of kilometers of coral reef and beach on Mexico's Caribbean coast will be insured to help preserve them and reduce the impact of hurricanes, The Nature Conservancy (TNC), a large US-based charity, said on Thursday.
Rapid payouts will be triggered when storm-force winds reach a certain speed under the "insurance-for-nature" plan, a concept TNC said countries such as Belize and Honduras were considering.
TNC said about 60 kilometers (37 miles) of reef and beach around Cancun and Puerto Morelos to the south would be covered.
"It's never been done before, there's never been insurance on a reef," Mark Way, TNC's director for global coastal risk and resilience, told the Thomson Reuters Foundation.
"It's really the first time the protective value has actually been monetised."
Healthy reefs are capable of reducing wave energy by up to 97 percent and can help protect coastal communities, livelihoods and infrastructure, while limiting beach erosion, said TNC.
Under this specialised policy, specific factors trigger payments, which would be made quickly and used to repair the insured section of the Mesoamerican reef, TNC said.
The announcement was made at a 3-day summit at the coastal resort of Playa del Carmen in Mexico's Yucatan peninsula where environmentalists, politicians and business leaders met to discuss how to improve the state of the world's oceans.
Protecting coastal infrastructure such as coral reefs is increasingly seen as vital to the region's tourist industry.
The 12 million visitors who flock each year to Mexico's Caribbean coast generate around $9 billion, according to Carlos Joaquin Gonzalez, governor of Quintana Roo State.
"These benefits are threatened by the possible presence of natural disasters such as hurricanes and storms that cyclically put us in risk," said Gonzalez.
The longest barrier reef in the western hemisphere, the Mesoamerican reef stretches more than 1,000 kilometers from the Yucatan to Honduras. Its live coral cover has plummeted 80 percent since 1980 due to factors such as disease and bleaching.
However, hurricanes rank as the biggest short-term threat, with a category four or five storm capable of wiping out up to 60 percent of live coral cover, said TNC.
Funding for the policy would come from the government and the tourist industry, said TNC, which devised the plan with insurance firm Swiss Re and the Rockefeller Foundation.
The Mesoamerican reef deal is TNC's latest structure to protect coastal resources.
Last month TNC, which has nearly $6 billion in assets, according to Forbes, agreed to buy a chunk of the Seychelles's sovereign debt in return for the Indian Ocean nation agreeing to protect vast swathes of its marine territory.