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.
Highlights
Following the 2015 fundamental year of key agreements (Sendai Framework, Paris-COP21, Agenda2030, Addis Ababa Action Agenda) and in the light of first publications on the projected climate change impacts on the insurance industry [1,2], one of the main current discussions considering climate change has moved towards the nascent increasing interest in nature-based solutions (NBS), and more globally towards preventive management [3,4]
Viable business models—e.g. like the natural assurance scheme developed under the Nature Insurance Value Assessment and Demonstration (NAIAD) project—where these benefits are demonstrated could play a significant role to increase the financing for the development of NBS
The findings indicate that the Grounded Theory approach has the potential to reveal a rich and deep understanding of theinsurance industry experiences, including the ways that the sector interacts with climate change, their understanding of the NBS and insurance value of ecosystems” (IVE) concepts, the specific challenges posed by the eco-disaster risk reduction (DRR), and the different uses of their roles in supporting loss prevention
Summary
Following the 2015 fundamental year of key agreements (Sendai Framework, Paris-COP21, Agenda2030, Addis Ababa Action Agenda) and in the light of first publications on the projected climate change impacts on the insurance industry [1,2], one of the main current discussions considering climate change has moved towards the nascent increasing interest in nature-based solutions (NBS), and more globally towards preventive management [3,4]. NBS are defined by the European Commission to be “actions to help societies address a variety of environmental, social and economic challenges in sustainable ways, simultaneously providing human well-being and biodiversity benefits. They are actions which are inspired by, supported by or copied from nature, and which protect, manage and restore natural or modified ecosystems” [5]. Since 2016, research has mainly focused on innovative ways to link climate change adaptation (CCA) with disaster risk reduction (DRR) and NBS across different sectors with the reinsurance and insurance industries, as a key global player for risk management [17,21,22]
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