MAR Fund
Protecting coastal communities from climate-related income loss
Key Details
Project leads: Rare and Willis (WTW business)
Financial Innovation: Insurance
Financial Support: The Government of Canada and The UK’s Blue Planet Fund
Location: Philippines
Project Timeline: Design 2021–2024; Pilot launch 2025
People Supported: 14,200
Summary
In an era of increasing climate volatility where fishing livelihoods are at risk, ORRAA partners Rare and Willis, a WTW business, designed and launched a pioneering solution: the world’s first weather index-based parametric insurance product tailored to small-scale fishers in the Philippines.
The insurance covers lost income from prolonged adverse weather – high winds, rough seas, and heavy rain – that makes fishing unsafe. When storms or rough seas keep boats tied up, small-scale fishers lose their daily income. The new insurance product changes the equation by paying fishers to stay safely at home when conditions are too dangerous, helping families and reducing pressure on already stressed marine resources.
Challenge
Climate change is disrupting weather patterns, making storms more intense and fishing seasons harder to predict. When fishers are forced to stay ashore during repeated stretches of bad weather, it can add up to the loss of an entire month’s income, often without a financial safety net.
In the Philippines alone, 6.5 million people rely on fisheries for food or income. Many fishers then turn to high-interest loans, sell critical assets, or overfish to make up for losses.
Solution
To help fishers cope with income losses from bad weather, ORRAA partners, Rare and Willis, have created a weather index that reflects the actual conditions small-scale fishers face at sea.
This index combines three key factors – wind speed, wave height, and rainfall – into a single trigger for insurance payouts. The advantage of this system is speed, transparency, and lower administrative costs. Fishers know exactly when they will be paid, and governments can deliver support efficiently without paperwork or delays.
The insurance is being piloted in the Philippines to protect 14,200 small-scale fishers across five priority coastal areas – Antique, Cebu, Negros Oriental, Occidental Mindoro and Surigao del Norte – with premium funding from the national budget of the Bureau of Fisheries and Aquatic Resources (BFAR).
Scalability and Next Steps
The pilot is a step in a broader strategy to scale resilience finance. In the Philippines, the government has committed national budget funding and envisions scaling the coverage to all registered fishers nationwide. Because the product is government-funded, commercially credible, and donor-de-risked, it provides a practical template that other countries can adopt.
Beyond the Philippines, Rare is exploring replication in other geographies where it works with coastal communities, and over time, aims to build on this foundation by expanding parametric approaches to cover natural assets such as coral reefs or mangroves.
“Bad weather can carry serious financial consequences for fishing households throughout the tropics. This parametric insurance coverage is a people-centered solution that reflects the lifestyle and culture of fishers in the region, reduces fishing pressure on marine ecosystems, and builds community resilience to climate change. We look forward to working with WTW and other partners to expand this coverage to fishers throughout the Philippines and beyond.” – Kate Schweigart, Rare’s VP of Innovative Finance.
