While coral reef insurance is a novel concept in Indonesia, it has already been implemented in some other countries, KI Ocean Program Director Budiati Prasetiamartati remarked.
“It proved effective,” she stated at the International Conference on Sustainable Coral Reefs (ICSCR) held in Manado, North Sulawesi, on Sunday.
In this case, KI is involved in a consortium with Landell Mills, Sustain Value, and Swiss Re, funded by the Asian Development Bank (ADB) to conduct a feasibility study.
The study is conducted in partnership and coordination with the Ministry of Marine Affairs and Fisheries.
"The feasibility study aims to identify the coral reef locations in Indonesia that allow for the application of coral reef insurance," she said.
Among seven coral reef locations identified in previous studies, two were chosen—Nusa Penida in Bali and Rote Ndao in East Nusa Tenggara (NTT)—both of which are within marine conservation areas.
The coral reefs' value, the community's economic potential, and future climate risks were analyzed at these two selected locations.
Prasetiamartati cited the example of Nusa Penida, where climate risks include sea surface water warming and flooding, with the latter's high rainfall potentially causing significant damage to the coral reefs within the conservation area.
Meanwhile, Rote Ndao was hit by Cyclone Seroja in 2021, which caused damage to coral reefs.
"Based on the analysis and discussions with stakeholders, including the Ministry of Marine Affairs and Fisheries, it is proposed to continue the analysis to see the feasibility of implementing coral reef insurance," Prasetiamartati said.
She added that the coral reef insurance mechanism is parametric insurance based on predefined parameters.
For instance, if a flash flood due to high rainfall affects coral reefs and meets certain parameters, an insurance claim can be released. The funds will then be used to restore the damaged coral reefs.
"Restoration can be carried out immediately without waiting for government funds to be disbursed, such as from the regional budget or the national budget, which usually takes time," she pointed out.
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Translator: Karel Alexander Polakitan, Cindy Frishanti Octavia
Editor: Anton Santoso
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