Developing Community-Based Catastrophe Insurance and Valuing Risk Reduction from Nature: A Community Resilience Center Pilot

The Approach

Community-based catastrophe insurance, or CBCI, is a framework that allows a community, institution, or organization to assess their vulnerabilities and design an insurance solution that supports their needs. On the Gulf Coast, where insurance challenges have been mounting for homeowners and businesses, a CBCI is a flexible strategy that can be designed to address specific gaps and needs such as shortening the time between a flood event and getting the cash in hand needed to start recovering. The Community Resilience Center at The Water Institute (Center) is focused on addressing insurance affordability and availability in Gulf communities. As part of this we are collaborating with a range of industry and community partners to design, place, and evaluate CBCI policies to test this new insurance product and how it might benefit vulnerable communities.

In this pilot project supported by the Walton Family Foundation, our team partnered with Marsh Re (formerly Guy Carpenter) and Verisk to undertake two tasks:

• Designing a flexible, unique CBCI solution with the Upper Breton Sound community members in St. Bernard and Plaquemines Parishes in coastal Louisiana, and
• Investigating how Louisiana’s high quality modeling data of future risk and planned investments in natural infrastructure, like marshes, could be incorporated into Verisk’s proprietary catastrophe models to inform insurance pricing.

The Center worked with stakeholders in St. Bernard and Plaquemines parishes to design a CBCI policy that meets the needs of residents and fishing communities living and working outside of the main federal levee system in the Upper Breton Sound. The CBCI solution co-designed with community stakeholders would provide a parametrically structured benefit to the fishing communities, businesses, and full-time residents of the Upper Breton Sound when flood levels significantly impact business operations. Our team is currently fundraising to purchase and place this policy.

For more information on the CBCI policy structure and our proposed next steps, please see this document: Breton Sound CBCI Structure Report_20260729.pdf

For more information on what we learned with Verisk, please see this one pager: INTEGRATING LOCAL DATA INTO CATASTROPHE MODELS_20260729.pdf

For more information on what we’ve learned about nature-based infrastructure and insurance, please see this infographic: WFF Insurance Graphic_0723-02.jpg