This feasibility study explores the development of a first-of-its-kind coral reef insurance mechanism in the Maldives. Led by UNDP Maldives and the Maldives Monetary Authority, with AXA Climate as a technical partner, the study aims to protect coral reefs, vital to the country’s economy and biodiversity against damage from marine heatwaves caused by climate change. It outlines how a parametric insurance model, triggered by extreme sea temperatures, could provide rapid funding for coral restoration. The study also assesses implementation pathways, stakeholder roles, and financial sustainability through a conservation trust fund, presenting a new approach to climate risk financing for vulnerable ecosystems.