The Insurance Council of Australia has championed “nature-positive insurance” as a way of promoting long-term climate resilience.

A new ICA report produced with EY Australia expands on last year’s Valuing Nature for a Resilient Future paper by examining how the industry can support nature-based solutions to mitigate climate risk. 

It says insurance groups are “uniquely positioned” to help clients as they adopt nature-positive positions that avoid environmental risk and contribute towards restoring nature.

Among its recommendations, the report – Advancing Resilient Nature Positive Insurance – says property insurers can integrate “nature data” into climate models and offer premium discounts for policyholders that use resilient and sustainable building materials.  

It also highlights the role of motor insurers in speeding the transition to low-emission vehicles by discounting premiums and providing comprehensive coverage for electric and hybrid cars.

“Australian insurers across all types stand to benefit from engaging in active dialogue with policymakers, businesses and stakeholders to promote a policy and regulatory environment that supports nature-positive outcomes,” the report says.

“Insurers setting nature-positive commitments can take steps to ... reduce the impacts of their operations, underwriting and investment activities, while simultaneously facilitating the flow of capital and efforts toward protecting and restoring nature.”  

The report also promotes nature-based solutions to protecting insured assets. For example, urban wetlands could shield homes from flooding by “acting as a natural sponge”.

Council CEO Andrew Hall says the report details effective and sustainable solutions.

“Now is the time for Australian insurers to act, embracing opportunities to drive a resilient future where the economy and society exist in harmony with nature,” he writes in the report’s foreword.  

“Activity that supports and safeguards nature and nature-reliant assets are emerging as effective strategies for insurers to protect insured assets and build resilience to climate change impacts.  

“This serves to moderate current and future risk – action that is essential to reducing the impact of damage in our natural and built environment and alleviating rising pressure on insurance premiums.”  

Click here for the report.