Insuring Nature's Survival: The Role of Insurance in Meeting the Financial Need to Preserve Biodiversity

Publication:
Insuring Nature's Survival: The Role of Insurance in Meeting the Financial Need to Preserve Biodiversity

dc.contributor.author	World Bank
dc.date.accessioned	2022-05-13T17:37:05Z
dc.date.available	2022-05-13T17:37:05Z
dc.date.issued	2022-04-27
dc.description.abstract	Biodiversity loss will be an increasingly important source of risk and opportunity for the insurance sector. The significant degradation of ecosystems has the potential to materially impact global finance, economies, and societies alike. Understanding the physical and transition risks associated with biodiversity loss and working to mitigate the damage to biodiversity will be a key aspect of meeting the targets set by the Paris Agreement. Insurance companies will be impacted by biodiversity risks in several ways: as underwriters, as investors, and as corporate citizens. Insurers will be impacted both by changes in climate and biodiversity and by transition risks affecting the risks they insure or the investments they make. Insurance can promote investment in biodiversity in three ways: (i) asset protection, (ii) liability reduction, and (iii) facilitation of capital inflow from the financial markets. Ideally, efforts to protect biodiversity will include a combination of instruments, not only insurance. Insurers, as investors, can contribute directly to the preservation of biodiversity by channeling capital towards biodiversity-positive investments, but the opportunities to do so are still limited. The G20 Sustainable Finance Roadmap (G20 SFWG, 2021) highlighted the need to integrate nature and biodiversity in future work on sustainable finance. The financial materiality of underestimating or inaccurately pricing biodiversity-related risks could pose a threat to the solvency of the insurance industry and lead to an increase in exclusions of uninsurable risks. Risk management can be enhanced by combining the results of both catastrophe and climate risk models, but more needs to be done to incorporate biodiversity risk. Combining ecological action with financial protection can make good economic and financial sense and help overcome the pricing issues associated with risks such as wildfire.	en
dc.identifier	http://documents.worldbank.org/curated/en/099850304272234140/IDU02b17904f04af504b8f087f708041ff6d79d4
dc.identifier.doi	10.1596/37437
dc.identifier.uri	https://hdl.handle.net/10986/37437
dc.language	English
dc.publisher	Washington, DC: World Bank
dc.rights	CC BY 3.0 IGO
dc.rights.holder	World Bank
dc.rights.uri	http://creativecommons.org/licenses/by/3.0/igo
dc.subject	INSURANCE
dc.subject	BIODIVERSITY
dc.subject	CLIMATE CHANGE MANAGEMENT
dc.subject	CLIMATE CHANGE IMPACT
dc.subject	RISK MANAGEMENT
dc.subject	ENVIRONMENTAL PROTECTIONS
dc.title	Insuring Nature's Survival	en
dc.title.subtitle	The Role of Insurance in Meeting the Financial Need to Preserve Biodiversity	en
dc.type	Report	en
dc.type	Rapport	fr
dc.type	Informe	es
dspace.entity.type	Publication
okr.crossref.title	Insuring Nature's Survival
okr.date.disclosure	2022-04-27
okr.date.doiregistration	2025-05-07T08:52:20.258540Z
okr.date.lastmodified	2022-04-28T00:00:00Z	en
okr.doctype	Report
okr.doctype	Publications & Research
okr.docurl	http://documents.worldbank.org/curated/en/099850304272234140/IDU02b17904f04af504b8f087f708041ff6d79d4
okr.guid	099850304272234140
okr.identifier.externaldocumentum	33804402
okr.identifier.internaldocumentum	33804402
okr.identifier.report	170986
okr.imported	true	en
okr.language.supported	en
okr.pdfurl	http://documents.worldbank.org/curated/en/099850304272234140/pdf/IDU02b17904f04af504b8f087f708041ff6d79d4.pdf	en
okr.topic	Environment::Adaptation to Climate Change
okr.topic	Environment::Climate Change Impacts
okr.topic	Macroeconomics and Economic Growth::Climate Change Economics
okr.topic	Public Sector Development::Climate Change Policy and Regulation
okr.topic	Finance and Financial Sector Development::Insurance & Risk Mitigation
okr.unit	EFI-FCI-Risk Finance (EFNRF)