How to insure a surf spot and invest in the ocean

Innovative parametric insurance protects Las Flores surf economy, illustrating ocean literacy, investment gaps, blended finance solutions, and effective governance needs.

In the small coastal community of Las Flores, El Salvador, life flows with the rhythm of the Pacific swell. Here, about 80% of the economy hinges on surf tourism; a good wave is more than excitement-it's foundational to local livelihoods. Hotels, restaurants, and local fishermen-who sell half their catch to the surfing economy-all depend on surfers attracted by legendary breaks. But what happens when these waves and the delicate ecosystems that form them face existential threats? Climate change is intensifying storms, increasing the risk of flash floods that wash away not only sandbanks essential for perfect waves but also the community's primary income source.

Facing this precarity, the Save the Waves Coalition posed a radical question: If you can insure a coral reef, why not a surf break? This led to a pioneering project in Las Flores using an innovative financial tool: parametric insurance. Unlike traditional insurance, which involves prolonged damage assessments, parametric insurance offers swift and straightforward payouts triggered by specific, pre-agreed conditions-in this case, rainfall. When rainfall surpasses a scientifically determined threshold indicating inevitable damage to the surf break, an immediate payout is triggered. This rapid cash injection, at times within a week, provides immediate business interruption support for local businesses and funds urgent watershed restoration, ensuring ecological and economic resilience.

This innovative approach in El Salvador is born from a deeper understanding of the ocean's value -a concept often termed "ocean literacy." For the financial world to invest in protecting marine ecosystems, it must first understand them. Ocean literacy, in this context, is not just about appreciating the beauty of the sea or educating youth about the ocean - it's about recognizing the intricate and often invisible economic dependencies that connect mainstream industries to ocean health. Ocean literacy means identifying clear opportunities for insurance, investments, and sustainable economic growth tied directly to ocean health.

For example, declining coral reefs significantly impact tourism, a vital economic driver for coastal regions. Beyond tourism, diminished coral reefs indirectly affect aviation by reducing tourist travel demand, and impact pharmaceuticals by disrupting the sourcing of critical marine-derived compounds used in medicine. Understanding these connections highlights the critical economic dependencies of mainstream industries on ocean health, transforming the "blue economy" from niche to essential in the eyes of financial markets. The reefs, seagrass beds, kelp forests, sand banks - they're all invaluable assets that deliver a panoply of ecosystem services that echo through the global economy.

According to the WWF, we're talking about financial losses of up to $8.4 trillion over the next 15 years if we continue on the current trajectory, i.e. largely overlooking ocean health. Ocean literacy thus empowers investors to redirect capital from destructive pathways toward sustainability-focused projects like the one in Las Flores. Sustainable investments must be built upon and grow alongside healthy, protected natural assets, rather than simply extracting resources, eroding assets and disregarding the long-term consequences of our actions.

Throughout the Blue Economy & Finance Forum 2025, one thing became clear: there are insufficient investable projects available to effectively deploy capital. This gap stems from a combination of low ocean literacy amongst communities and investors, shortage of creative business cases, and significant structural challenges. Most financial market capital remains tied up in publicly listed companies, while blue economy ventures are often small, private, and unlisted, creating barriers to investment. Small enterprises must be supported in scaling operations and thinking more entrepreneurially across their entire value chain, e.g. from harvesting seaweed to processing and marketing. Bridging this investment gap requires the involvement of intermediaries, such as local banks and microfinance institutions, equipped with the skills to identify sustainable opportunities within their communities and the capital to get them off the ground.

Blended finance approaches creatively combine catalytic grants, impact loans, and private investments to tackle structural challenges within traditional financial systems, which often lack appropriate tools for marine conservation. In the video below, Angelique Brathwaite, co-founder of Blue Alliance, describes how they navigated the system. These approaches diversify revenue streams and share financial responsibilities, lowering investment risks. For instance, Blue Alliance partners with marine protected areas to support reef-positive businesses such as community-based aquaculture, ecotourism, and sustainable fisheries. These blended models help ensure consistent, reliable funding for conservation while sustaining community livelihoods.

For investments to flow sustainably, a secure operating environment is necessary. Ocean governance often suffers from complexity, weak enforcement, and unclear regulations-conditions deterring investment. Governments must therefore create stable, predictable environments through robust sustainable ocean plans, marine protected areas, and prioritized ocean science. By providing clear regulations and incentives, governments mitigate risks, attracting essential funding toward ocean health.

The journey ahead is complex, but the shift has begun - a sentiment echoed across BEFF attendees. NGOs, innovative businesses, and forward-thinking financiers increasingly demonstrate that ocean conservation and economic prosperity can coexist. By valuing natural assets clearly and fostering creative partnerships, resilience can be built into ecosystems and communities. Stakeholders-leaders, entrepreneurs, and citizens alike - must actively engage, advocate robust governance, and invest in safeguarding our ocean's future.

H.E. Ilana Seid - The Permanent Representative of Palau to the United Nations & Co-Chair of the Steering Committee for the Blue Economy and Finance Forum - emphasises the need to transform perceptions of the ocean from a charity case to an investable asset capable of delivering returns for people, planet, and profit. She outlines three key messages for long-term ocean stewardship:

1. Ratify the BBNJ treaty to ensure high seas protection, which covers 65% of the ocean and significantly impacts local marine ecosystems
2. Find the courage to say no to potentially harmful activities such as deep-sea mining, prioritizing caution and environmental protection.
3. Invest in frameworks like ocean taxonomy, ensuring policies align effectively with financial markets, thus enabling capital to flow smoothly into sustainable ocean projects.