Insurance Symposium for Wigi (Humboldt Bay)

On March 29, the Ocean Science Trust held a symposium in Eureka, CA to explore innovative insurance and climate finance strategies to enhance coastal resilience in Wigi, also known as Humboldt Bay.

This symposium builds upon OST’s efforts to explore the potential for insurance and other climate financing mechanisms to work together with nature-based solutions to bolster coastal resilience in California. As part of this effort, OST is partnering with the California Department of Insurance to launch pilot projects across the state that will test these strategies to serve as a proof-of-concept. OST has been hosting a series of symposiums across the state to bring together local practitioners, scientific experts, including from the insurance and finance sectors, and decision-makers to start to break down silos between these sectors, build a shared language for risk at the local level, and to explore potential pilot projects.

The Humboldt symposium was the third of these events. Below are some key takeaways from the day’s discussions:

• ● We need to find ways to effectively engage the insurance industry at the local level so that the needs of communities, especially tribes and frontline communities, are central when building new products.
• ● There are multiple barriers and challenges to developing such products for adaptation purposes, including timeline misalignments between the insurance industry and adaptation field, limited access to data and information on risk, and restrictive regulations or socioeconomic circumstances that hinder adaptation action.
• ● There is an opportunity to leverage the data capacity and expertise of the insurance industry to develop innovative products. Such opportunities may include:
• ○Establishing an innovative climate insurance lab to develop products that buffer climate risk and address problems in the existing market.
• ○Designing place-based insurance products that specifically anchor insurance products in the needs and priorities of local communities.
• ● Developing pilot projects to create innovative products and strategies could help test and prove the best designs. Such strategies that are worth exploring include, but are not limited to:
• ○Community-based Catastrophe Insurance: also known as group insurance that pools funds to pay premiums.
• ○Performance-based Risk Transfer: strategies for transferring risk based on performance (e.g., environmental or social impact bonds) to reduce funding and liability barriers for nature-based solutions.
• ○Credits and/or Incentives for Risk Reduction: incorporating adaptation projects with potential risk reduction benefits into insurance models (to reduce premiums) to incentivize communities to build coastal resilience.

Going forward, OST will continue these dialogues with symposium participants and other potential collaborators to further explore and refine these ideas, with the hope of catalyzing a pilot project for Wigi / Humboldt Bay that will adequately address their needs for coastal resilience and adaptation planning.