Based on our engagement sample, the insurance sector demonstrates a mixed bag of awareness on the topic of biodiversity. Some of the insurers are taking the subject of biodiversity very seriously, and have announced a specific biodiversity strategy and/or devoted significant resources to initiatives and research on the topic. On the other hand, some of the companies were surprised and uncomfortable by our enquiry as biodiversity is not yet on their radar screen.
Key Takeaways
- Biodiversity is a standalone risk and opportunity for the insurance sector
- High degree of variability in the sector around awareness of biodiversity with only a handful of companies identifying it as a distinct topic requiring strategic attention
- Apart from a few players, the sector demonstrates a lack of top down oversight over biodiversity within its operations, investments and underwriting
We noted that most of the insurers have started to indirectly take biodiversity risks and impacts into account through its strong links with climate change, but not through a direct assessment of the risk and impact. In the case that insurers do directly asses the topic, they first start to approach biodiversity for their investment portfolio (assets), before considering it for the underwriting activities (liabilities) – as they do for climate. We also note that the industry‘s primary focus on biodiversity is a risk approach, more than an approach of impact, dependencies or opportunities. The nature of the industry as a risk manager and risk carrier explains this tendency.
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