surfingdude, as I understand it (and I'm no expert) it's a biochemical reaction in the pigments of the coral. Kind of like bioluminescence but then not the same. Some, not all, pigments take in the high energy, short wavelength blue, violet and even some UV light. They then use some of that energy to actually make light fluoresce. If you pay attention, you'll notice that there are greens, yellows, oranges and reds that fluoresce, but there isn't any blue because they have to use some of the light energy to fluoresce. So there isn't enough energy left for them to fluoresce blue which is high energy, they only do wavelengths that are longer and lower energy.
It's one of the reasons that led fixtures with blue channels have become so popular. Plus the fact that the corals use blue wavelengths to mdo photosynthesis (or their zooxanthellae does).