Insurance and the Natural Assurance Value (of Ecosystems) in Risk Prevention and Reduction

Abstract Climate change is increasing the frequency and intensity of natural disasters and can threaten the functions of ecosystems. Affected, damaged or destroyed ecosystems in turn also make our societies more vulnerable to natural hazards and climate change (i.e. their assurance value). In addition, expanding communities and concentrations of wealth in high-risk areas are increasing risk exposure dramatically. This chapter outlines the growing interest in the protective role nature-based solutions (NBS) can play in buffering against risks posed by natural hazards. It presents mechanisms and potential roles of the insurance industry to facilitate loss prevention through NBS. The use of catastrophe models to quantify the assurance value of nature (in line with Chaps. 1 and 2 ), the benefits of nature in reducing natural hazards-related damages have been highlighted. Catastrophe models developed and run by insurance companies are well-suited to support the quantification of the avoided damage provided by NBS. This can be performed in complement to research institutions assessments of co-benefits NBS provide (as outlined in the case studies’ chapters). The findings developed in this chapter make a strong case for pro-active engagement of the insurance industry in assessing nature-based risk reduction measures and public/private plans for implementation and monitoring. Graphical Abstract