9 December 2021

Insuring Nature-based Solutions

3 min

Nature-based Solutions have the potential to provide up to 30% of the global climate mitigation required to limit global warming to 1.5 degrees (UN Global Compact). 

To do so, there will need to be significant investment. In the UK alone, £3bn of funding has been allocated to climate change solutions that protect and restore nature and biodiversity (UK Government). 

As with any growth market, this represents a huge opportunity for the insurance industry. 

Insurance has a significant role to play in society’s journey to a low-carbon future both by de-risking companies’ and industries’ transition to low-carbon energy sources and in helping to increase people’s confidence behind the removal of carbon from the atmosphere. 

This report provides practical, insightful guidance on how we might use the huge pool of untapped modelling skills, data and capacity of the insurance market to help with the solutions to the challenges of tomorrow. 

Charlie Langdale 

Head of Climate Risk & Resilience, Howden

Key Takeaways

Nature-based solutions (NbS) have a large role to play in meeting climate goals and have the potential to help arrest the loss of biodiversity, both in the UK and globally. Here, we assess the role the insurance industry can play in helping NbS markets scale, and the huge market opportunity that could flow from it.

  • Insurance schemes are proving effective in restoring and protecting green infrastructure. Building on that success in NbS and carbon markets will come with underwriting challenges.

  • Voluntary carbon markets may be a $50 billion+ industry by 2030. Insurers can help to make that happen and create a new insurance market worth at least $1.3 billion globally.

  • In the absence of regulation, insurers can kick-start the opportunity by expanding from adjacent markets and insurable risks, partnering with investors, and leveraging technology.

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