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Nature-based solutions, prevention and reduction of risks and the insurance sector

The costs from climate-related hazards in Europe are increasing and are likely to rise even further and faster over the coming century due to a projected increase in the severity and frequency of events brought by climate change. This will exacerbate other changes related to land use and urbanisation. While encompassing the whole cycle of disaster risk management, in line with the implementation of the EU Sendai Framework over the next ten years (2015-2030) and the new EU Adaptation Strategy, special attention on the role of prevention and risk reduction in Europe is needed, notably through nature-based solutions (NBS). The role that the insurance and reinsurance industry can play in resilience and risk reduction is not sufficiently explored. Previous research highlights that the insurance sector can support action as institutional investors, insurance providers, innovators of new insurance products or as partners bringing their risk management expertise[[Weinberg, J., Thakar K., Marchal, R., Nanu, F. and Lopez Gunn, E. (2019). DELIVERABLE 8.3; Second Roundtable Report and Policy Brief. EU Horizon 2020 NAIAD Project, Grant Agreement N°730497.]]. Data collected by insurance companies can help municipalities in their understanding of risk and to better prioritize climate adaptation measures[[Ebeltoft, M. (2016). Private-Public-Project: sharing insurance loss data to local and national authorities, (and scientists) in DRR and resilience work. NORDRESS Island, January 2016.]]. However, several barriers remain insufficiently addressed to further engage the insurance sector in the particular case of NBS – from data management issues to overcoming the uncertainty of investments, or finding adequate regulatory incentives[[Marchal, R., Piton, G. Lopez-Gunn, E., Zorrilla-Miras, P. Van der Keur, P. Dartée, K. Pengal, P. et al. (2019). The (Re)Insurance Industry’s Roles in the Integration of Nature-Based Solutions for Prevention in Disaster Risk Reduction—Insights from a European Survey. Sustainability 11 (22): 6212.]].

The successful proposal should:

  • Establish a network and the needed collaborative and participatory arrangements and spaces between all relevant stakeholders in risk reduction across scales: insurers and re-insurers (including insurance associations), public authorities (local, regional and/or national), financing bodies (e.g. the EIB and other investors), farmers associations, relevant actors from the scientific community and potential links to other relevant initiatives (such as the Covenant of Mayors);
  • Facilitate a dialogue at different levels of such a network of stakeholders on potential opportunities, strategies or mechanisms to foster collaborative action for a more robust decision-making and for increased risk prevention through NBS;
  • Identify risk-related data requirements, mechanisms, existing tools, and opportunities for better data sharing (and data crowdsourcing) to identify areas at risk and potential areas of intervention through NBS or hybrid approaches;
  • Support the establishment of secure and efficient data sharing mechanisms between local authorities, insurers and the private sector, taking into appropriate consideration data privacy issues;
  • Develop agreed and robust metrics for the quantification of risk reduction performance, and/or ways to assess risk mitigation potential from NBS, including better integration of NBS models and catastrophe models, damage estimates under climate change scenarios and avoided damages;
  • Identify financing options and existing success stories for NBS investments from insurance companies, including through blending mechanisms;
  • Identify new insurance products that are transparent and affordable in terms of risk premiums and/or pooling of risks;
  • Highlight best practices, and remaining gaps, related to the use of NBS to reduce and control risks, considering the type of hazard, location, and scale of intervention;
  • Identify specific case studies related to NBS and reduction of risk in EU policies and strategies (e.g. the EU adaptation strategy, the action plan on the Sendai framework for disaster risk reduction, the common agricultural policy (CAP), the EU forest strategy, the Water Framework Directive, the Floods Directive, restoration objectives in the EU biodiversity strategy, etc.).

Proposals should address all of the above points.

Complementary activities such as interviews, research reviews and small research/experimentation-oriented actions may be envisaged. The stocktaking of previous Horizon 2020 projects on NBS, and how these results can be integrated in future insurance sector involvement should also be addressed.

Applicants should create synergies with projects under the same topic and other relevant ongoing or up-coming projects, notably the Horizon 2020 NBS project portfolio and its task forces; HORIZON-CL6-2021-BIODIV-01-05: The economics of nature-based solutions: cost-benefit analysis, market development and funding; HORIZON-CL6-2022-BIODIV-01-03: Network for nature: multi-stakeholder dialogue platform to promote nature-based solutions; HORIZON-CL6-2022-COMMUNITIES-01-05: Assessing the socio-politics of nature-based solutions for more inclusive and resilient communities. To this end, proposals should include dedicated tasks and appropriate resources for coordination measures, foresee joint activities and joint deliverables.

Proposals should ensure that project outputs are accessible through the Oppla portal (the EU repository for NBS)[[]]. Social innovation is recommended when the solution is at the socio-technical interface and requires social change, new social practices, social ownership or market uptake. This topic should involve the effective contribution of SSH disciplines.