The (Re)Insurance Industry’s Roles in the Integration of Nature-Based Solutions for Prevention in Disaster Risk Reduction—Insights from a European Survey

Abstract

Nature-based solutions (NBS) are increasingly being considered as an option to reduce societies’ vulnerability to natural hazards, creating co-benefits while protecting ecosystem services in a context of changing climate patterns with more frequent and extreme weather events. The reinsurance and insurance industries are increasingly cited as sectors that can play a role to help manage risks, by improving disaster risk reduction (DRR) and loss prevention. This paper investigates how the (re)insurance industry could support the transition from a paradigm focused on ex-post responses to ex-ante risk reduction measures including NBS, in line with the Sendai Framework. This paper presents the results of a series of 61 interviews undertaken with the (re)insurance sector and related actors under the EU H2020 Nature Insurance Value Assessment and Demonstration (NAIAD) project. Methods based on a Grounded Theory approach indicate how this sector can play different roles in loss prevention, including ecosystem-based disaster risk reduction (eco-DRR). Results illustrate how the (re)insurance industry, under these roles, is gradually innovating by having a better understanding of hazards and mitigation. The findings of the study contribute to wider discussions such as the possibility of new arrangements like natural insurance schemes and evidence-based assessment of avoided damage costs from green protective measures, in Europe and beyond.

Nature-based solutions for flood risk reduction: A probabilistic modeling framework

“…Recent literature suggests that the insurance and re-insurance industry is starting to consider nature-based solutions for risk mitigation. 5,41 Quantitative, spatially explicit assessments of benefits such as the one presented here will help develop disaster resilience enhancement products. 6,12 Impacts of forest protection on flood hazard, exposure, and losses in the Chindwin basin Our results suggest that forest protection in the Chindwin River basin may reduce peak discharge by 5%, flood volume by 18%, and inundation extents by 5% for smaller events (5-year return period), compared with projected deforestation.…”

“…Floods are the most frequent natural hazard globally, and flood-induced losses are expected to grow with future climate and land-use changes. 1,2 Natural ecosystems can play a significant role in mitigating the risk of flooding, or conversely can exacerbate flood risk when they are degraded, as recognized by multilateral banks, 3 supranational or national governments, 4 insurance companies, 5,6 and non-governmental organizations. 7 However, the incorporation of natural infrastructurebe it forests, parks, or riparian vegetation-into flood risk management plans remains exceptional: 8 flood mitigation measures are biased toward ''gray infrastructure'' whose protective capacity is easily measured (although perhaps no less uncertain) and designed for with engineering software.…”

“…8 Multiple regulatory, governance, financial, and technical factors hinder the adoption of nature-based solutions in flood risk mitigation programs. 9,10 The nascent interest in using naturebased solutions in the insurance industry highlights the importance of understanding the historical and cultural perspectives on risks, 5,11,12 with promising advances recently made in the context of coastal flooding. [13][14][15] Important technical barriers also remain, especially for riverine flooding, due to the challenge of quantifying the effectiveness and co-benefits of natural infrastructure.…”

Insurance Value of Ecosystems: An Introduction

“…Insurance value of ecosystems is often analytically compared with commercial insurance provision (Baumgärtner, 2007) but real applications for insurance schemes that would account for resilience improving management measures have seldom been reported so far (but see Marchal et al, 2019). Operational application of nature-based ideas providing insurance value are contrasted throughout this special section with commercial insurance and its challenges.…”

Harmonizing Erosion Control and Flood Prevention with Restoration of Biodiversity through Ecological Engineering Used for Co-Benefits Nature-Based Solutions

“…Therefore, they can be used for cost-benefit analysis. This kind of system should facilitate surpassing the step of accommodating different objectives, such as the reduction of damage and the preservation of biodiversity, which require multicriteria analyses so that the key challenge of integrating aquatic environment management and flood prevention can be met [52]. An expected outcome could be a proposal of coherent and adapted governance for application of co-benefits NBS at the catchment and territory scales.…”