---
title: what a reinsurer can fund before the season
canonical_url: https://ensurance.app/guide/what-a-reinsurer-can-fund-before-the-season
markdown_url: https://ensurance.app/guide/what-a-reinsurer-can-fund-before-the-season.md
subtitle: "nature-based solutions for reinsurers: a set share of treaty premium, aimed at the forest, floodplain or marsh under one zone, measured with and without the work"
category: nature-finance
---

# what a reinsurer can fund before the season

*nature-based solutions for reinsurers: a set share of treaty premium, aimed at the forest, floodplain or marsh under one zone, measured with and without the work*

Reinsurers already stand behind living systems, and the clearest cases are reefs. A reef crest breaks waves before they reach a hotel strip or a fishing town, and it does that work whether or not anyone pays. In 2020 a parametric policy on the Quintana Roo reef, built with Swiss Re, The Nature Conservancy and the state's coastal trust, paid about USD 850,000 after Hurricane Delta so crews could repair it. In 2022 the MAR Fund reef policy paid USD 175,000 within two weeks of Hurricane Lisa. Those covers are the clearest bridge we found between reinsurance and a habitat.

Both pay after the storm. Our research for this series found no reinsurer directly funding restoration to lower the loss under its own book outside parametric reef covers like these. That gap is the opening. [**Ensurance**](/?from=guide) is how the people a forest, floodplain or marsh protects can pay for its condition before the season. It is not the forest, and it is not reinsurance: it pays no claims and holds no risk.

:::johnson
**fund the ground under the exposure, before the loss is ceded.** A set share of the premium a treaty already carries, aimed at one named zone and measured with and without the work, the way a cat model measures.

[see who it is for →](#who-this-offer-is-for)
:::

## what the field already did

The market has done three things with nature so far. Each stops short of funding the ground ahead of the season.

| what was done | example | when money moves | what it leaves open |
|---|---|---|---|
| Parametric cover of a habitat | Quintana Roo, about USD 850,000 after Delta (Swiss Re, 2020); MAR Fund, USD 175,000 after Lisa (Artemis, 2022) | After a trigger event | The policy pays after the trigger; it is not the funding for the reef's condition between storms |
| Modeling the habitat's effect on loss | The studies below | It is evidence; no money moves | We found no reinsurer paying to act on it |
| Resilience bond "rebate" | Price a cat bond with and without a project; the gap is a rebate (re:focus, Swiss Re, RMS, Rockefeller, 2015) | At issuance, in theory | No resilience-rebate bond has been found issued |

[A payout is not a reef](/guide/a-payout-is-not-a-reef?from=guide) walks through the parametric cousin, and [a resilience bond is still a bond](/guide/a-resilience-bond-is-still-a-bond?from=guide) covers the other. None of the three pays, season after season, for the fuel load, floodplain or marsh that sets part of the loss a treaty will see.

## the evidence that the ground lowers the loss

| study | finding | method |
|---|---|---|
| Narayan et al., 2017 | Wetlands avoided about USD 625 million of direct damage in Hurricane Sandy (a major storm; a modeled result, not evidence a marsh stops one); Ocean County, New Jersey salt marshes cut average annual flood losses 16% (modeled annual average) | Modeled, industry cat models |
| Beck et al., 2018 (global) | Without reefs, annual expected flood damages would double; frequent-storm costs would triple | Modeled |
| Menéndez et al., 2020 (global) | Mangroves' flood-protection benefit exceeds USD 65 billion a year | Modeled |
| TNC and WTW, 2021 | Ecological forestry in the northern Sierra Nevada cut modeled average annual loss (AAL) 40–60% | Modeled, cat model |
| Swiss Re Institute, 2025 | Florida National Flood Insurance Program (NFIP) claims 2009–2022: claim frequency about half in the best-protected coastal-habitat areas, in frequent storms | Observed claims |

Most of this is modeled, and the one claims study covers frequent, smaller storms. That is the honest scope: the ground moves mostly local, mostly secondary-peril losses, which is where treaty pain has been. Swiss Re's sigma put a record 92% of 2025 insured nat-cat losses on secondary perils. Hail is weather and no forest changes the storm itself; wildfire and flood are partly set by the ground. Verisk models flood and wildfire at 7% and 6% of global insured average annual loss, and severe convective storm at 40%. The ground moves part of the first two, not the third. [The carrier's cheapest claim](/guide/the-carriers-cheapest-claim?from=guide) lays out the same evidence for a primary book.

## nature-based solutions for reinsurers, funded before the season

**Nature-based solutions for reinsurers** means funding work on a forest, floodplain, marsh or reef meant to lower the modeled loss in a zone where the reinsurer holds exposure, and measuring it the way the reinsurer already measures risk. The difference from today is timing and reach: the money moves before the season, and it reaches the ground rather than the repair bill.

A treaty's view of that ground depends on its structure. A quota share sees its share of the zone's loss from the first dollar, so frequency work shows up directly. An excess-of-loss layer sees it only above the attachment, and since the 2023 reset, for many cedents much of a secondary-peril year stays below it (the sources give no market-wide attachment figure) ([the loss moved down the tower](/guide/the-loss-moved-down-the-tower?from=guide)). That is why the cedent's buyer and a public pool belong in this offer beside the reinsurer. An excess-of-loss reinsurer should fund a zone only where the modeled loss to its own layer, not the whole zone, falls with the work. If it does not, the zone fails the test.

## who this offer is for

| buyer (role) | their exposure, in their number | door |
|---|---|---|
| A reinsurer's nat-cat treaty desk or sustainability desk | Its modeled AAL share in a named zone: a wildland-urban interface county, a coastal strip, a floodplain reach | [Insurers](/solutions/insurers?from=guide&topic=reinsurance) |
| A cedent's reinsurance buyer | The retained secondary-peril loss in that zone, below the attachment | [Insurers](/solutions/insurers?from=guide&topic=reinsurance) |
| A public pool or state program | The policies it carries in the zone after private carriers left | [Governments](/solutions/governments?from=guide&topic=reinsurance): regional planning, wildfire and flood work, hydrology and MRV (risk assessment sits on the insurers page) |

Start with the number you already hold: your modeled AAL by peril in the zone, from your own cat model.

## what we deliver

Three things a reinsurer can fund: the assessment, the work, the MRV. A syndicate is how several carriers share them. The services and the syndicate below are listed on [the insurers page](/solutions/insurers?from=guide&topic=reinsurance).

1. **Risk assessment of the zone's ground.** Which forest, floodplain or marsh sits under the exposure, its condition, and which work could move the hazard term in your model.
2. **The wildfire and flood work.** Fuel reduction, defensible space and forest health treatment on the ridge; wetland restoration, floodplain reconnection and natural buffers along the river or coast.
3. **MRV of condition.** Measurement, reporting and verification: acres treated, fuel loads, floodplain storage, marsh extent, recorded each season so a modeler has an input to change.
4. **A syndicate when several carriers share a zone.** One carrier treating a ridge spares every policy under it. Reinsurers and cedents in the same zone can pool through a syndicate such as [wildfire resilience](/wildfire-resilience.syndicate?from=guide), which coordinates wildfire mitigation and forest health instruments and is not yet funded by carriers. It is pooled funding for the ground, not pooled risk, and no return is promised.

The money travels on a **certificate on a named place** under [risk resilience](/risk-resilience.ensurance?from=guide): a funding record tied to that place, on a public ledger so an auditor or regulator can read the funding without asking us, with proceeds routed to the place and the people who keep it. A marsh is not worth its avoided claims. The avoided claim is how a balance sheet sees it. The people who keep the place decide what work happens there. For a treaty that wants its own line per zone, a **treaty zone hold** is proposed; it shows as coming soon, and you can [co-create the line](/specific/create?mode=suggest&agent=risk-resilience.ensurance&name=treaty%20zone%20hold&from=guide).

## the unit, in treaty terms

Two ways to pay: **a set percentage of treaty premium** (ceded by the cedent, written by the reinsurer), **or a fixed amount per exposure zone per season**. It is sized from the treaty's premium but paid from the buyer's own loss-control or sustainability budget. The treaty terms do not change. A hypothetical sizing, round numbers only, not a quote:

| step | hypothetical figure |
|---|---:|
| Premium on one property treaty | USD 40,000,000 |
| Share set aside for the ground under one zone | 0.5% |
| Annual funding to that zone (or the same as a flat per-zone amount) | USD 200,000 |
| The reinsurer's modeled AAL share in that zone | USD 4,000,000 |
| Funding as a share of that AAL | 5% |

The 0.5% is a placeholder, not a recommended rate or a market norm. Whether 5% is worth paying depends on the modeled reduction.

The ceiling is a rule a treaty desk could set: each season's funding stays at or below the modeled AAL the work is expected to remove from your share, on the same annual basis. Assessment and MRV fees are quoted separately.

## how it is measured

Same events, same exposure, two runs: without the work and with it. The difference in modeled AAL is the expected benefit, and nothing else counts. A percentage borrowed from "better condition" is not a saving. [How an intervention lowers the loss](/guide/how-an-intervention-lowers-the-loss?from=guide) sets out the four steps and who does each. The MRV record gives your modeler a reason to change the hazard term.

## what it cannot claim

- **No realized outcome yet.** No reinsurer has booked an ensurance-funded loss reduction. The evidence above is the field's.
- **No tail relief.** Ground work does not stop a Category 5 at landfall or an M7 earthquake. Peak-peril capital is untouched.
- **Not reinsurance.** Ensurance takes no risk, pays no claims and sits beside the treaty ([what ensurance cannot do](/guide/what-ensurance-cannot-do?from=guide)).
- **No promise of a rate change.** Whether a modeled reduction reaches a price is the underwriter's call. The first gain may be a zone that stays writable ([keep the policy before you cut the price](/guide/keep-the-policy-before-you-cut-the-price?from=guide)).

## start with one zone

Pick the zone where your modeled AAL is highest and the ground is plainly part of it. Read the services and use cases on [the insurers page](/solutions/insurers?from=guide&topic=reinsurance), then [talk to someone who can map that zone with you](/contact?from=guide&topic=reinsurance). Bring the run. We bring the map of the ground and the people who keep it.

## frequently asked questions

### what are nature-based solutions for reinsurers?

Funded work on forests, floodplains, marshes or reefs meant to lower the modeled loss in a zone where the reinsurer holds exposure. The one use we found is parametric reef cover that pays after a storm. Ensurance funds the ground before the season and measures it with and without the work.

### has any reinsurer funded restoration to lower its own losses?

Our research found none outside parametric reef covers such as Quintana Roo and the MAR Fund, which pay for repair after a trigger event.

### does this reduce tail risk or capital?

No. It moves mostly local, mostly secondary-peril losses such as wildfire and flood. Peak-peril tail capital is untouched.

### how would a reinsurer pay for it?

As a set percentage of treaty premium, paid from its own loss-control or sustainability budget, or a fixed amount per exposure zone per season, through a certificate on the named place. Carriers sharing a zone can pool through a syndicate.

## sources

[Swiss Re, Mexico windstorm cover (Quintana Roo reef), 2020](https://www.swissre.com/our-business/public-sector-solutions/case-studies/mexico-windstorm-cover.html) — reef parametric policy; about USD 850,000 paid after Hurricane Delta

[Artemis, Hurricane Lisa triggers parametric Mesoamerican Reef insurance, 2022](https://www.artemis.bm/news/hurricane-lisa-triggers-parametric-mesoamerican-reef-insurance/) — MAR Fund policy paid USD 175,000 within two weeks

[re:focus partners, Swiss Re, RMS and Rockefeller Foundation via Adaptation Clearinghouse, Leveraging catastrophe bonds as a mechanism for resilient infrastructure project finance, 2015](https://www.adaptationclearinghouse.org/resources/leveraging-catastrophe-bonds-as-a-mechanism-for-resilient-infrastructure-project-finance.html) — resilience rebate concept; no issued rebate bond found

[Narayan et al., The value of coastal wetlands for flood damage reduction in the northeastern USA, Scientific Reports, 2017](https://doi.org/10.1038/s41598-017-09269-z) — about USD 625 million avoided in Sandy; Ocean County marshes cut average annual flood losses 16% (modeled annual average)

[Beck et al., The global flood protection savings provided by coral reefs, Nature Communications, 2018](https://doi.org/10.1038/s41467-018-04568-z) — without reefs, annual expected flood damages double and frequent-storm costs triple

[Menéndez et al., The global flood protection benefits of mangroves, Scientific Reports, 2020](https://doi.org/10.1038/s41598-020-61136-6) — mangroves' flood-protection benefit above USD 65 billion a year

[The Nature Conservancy and WTW, Wildfire resilience insurance: quantifying the risk reduction of ecological forestry with insurance, 2021](https://wtwco.com/en-US/Insights/2021/07/wildfire-resilience-insurance-quantifying-the-risk-reduction-of-ecological-forestry-with-insurance) — northern Sierra ecological forestry, modeled AAL 40–60% lower

[Swiss Re Institute, Coastal and flood protection from natural habitats, 2025](https://www.swissre.com/institute/research/topics-and-risk-dialogues/climate-and-natural-catastrophe-risk/coastal-and-flood-protection-natural-habitats.html) — Florida NFIP claims 2009–2022, claim frequency about half in best-protected areas

[Verisk, global insured catastrophe losses now expected to average USD 171bn annually, 2026](https://www.verisk.com/company/newsroom/global-insured-catastrophe-losses-now-expected-to-average-$171-billion-annually-verisk-finds/) — modeled AAL by peril

[Swiss Re Institute, sigma 1/2026: natural catastrophes in 2025, 2026](https://www.swissre.com/institute/research/sigma-research/sigma-2026-01-natcat-2025-wildfire-storm-risk.html) — record 92% of 2025 insured nat-cat losses from secondary perils

## the series

1. [what reinsurance cannot cede](/guide/what-reinsurance-cannot-cede?from=guide)
2. [secondary perils are not secondary](/guide/secondary-perils-are-not-secondary?from=guide)
3. [the loss moved down the tower](/guide/the-loss-moved-down-the-tower?from=guide)
4. [the model learns from a past that is leaving](/guide/the-model-learns-from-a-past-that-is-leaving?from=guide)
5. [capital is not the shortage](/guide/capital-is-not-the-shortage?from=guide)
6. [what a reinsurer can fund before the season](/guide/what-a-reinsurer-can-fund-before-the-season?from=guide)