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Hwy flooding, Ontario 2013 Credit RM Images flickr_cc license - without the sign

Embracing Natural Assets: A Pathway to Resilient Insurance Practices?


A new project between the Natural Assets Initiative and researchers from the Risk and Insurance Studies Centre (RISC), a broad array of Canadian insurers advising the project, along with other interested researchers and stakeholders, is exploring the links between natural asset management (NAM) and Canada’s insurance sector now through 2025.

Hwy flooding, Ontario 2013 Credit RM Images flickr_cc license
Highway flooding, Ontario 2013. Credit RM Images flickr. CC license.

The goal of this project is to provide Canadian property and casualty insurers with actionable insights on how natural assets and NAM can be an effective risk reduction strategy.

Over the course of 2024 and 2025, the project will: 

  1. Synthesize evidence of the relationships between natural asset health and management and property and casualty (and other) insurance risks
  2. Identify and develop specific, actionable strategies, measures, and investments and tools that insurers can consider that both strengthen natural asset health and reduce insurable risks

Outcomes may include:

  • Helping insurers act on the growing evidence that natural assets can provide vital risk reduction services in a changing climate (e.g., stormwater management and flood mitigation)
  • Providing potential sources of revenue for actions that reduce risk 
  • Forming part of a strategy to ensure that large areas do not become uneconomical to insure by lowering risks and thus lowering premiums

The research team consists of everyone noted in Table 1.

Table 1: Research team (as of July 2024)
Dr. Robert Stewart, PhD, PRM, a post-doctoral researcherLead Researcher
Ed Furman, Chairman of RISC and a Full Professor of Actuarial Science at York University and an adjunct Research Professor of Actuarial Science at the University of Waterloo and Western University.Co-supervisor for Dr. Robert Stewart,
Expert Project Advisor
Dirk Matten, a Full Professor of Sustainability at Schulich School of Business, immediate past Associate Dean of Research.  Co-supervisors for Dr. Robert Stewart,
Expert Project Advisor
Other researchers from across Actuarial Science (Sheldon Lin, University of Toronto; Fan Yang, University of Waterloo; Jingyi Cao, York University); Business (Olaf Weber, York University); Economics (Ida Ferrara, York University); Mathematics and Statistics (Ricardas Zitikis, Western University); and Psychology (Shayna Rosenbaum and Julia Halilova, York University) are available as needed.  

Insurers are involved through an open-ended advisory group which currently consists of representatives from the Co-operators, Definity, Municipal Insurance Association of BC, TD Insurance, and Wawanesa.  Observers include the Intact Centre for Climate Change, International Institute for Sustainable Development, Infrastructure Canada, World Wildlife Fund Canada, and Swiss Re.

Involvement from the insurance sector in research projects is crucial to fully harnessing the potential of NAM. Here’s why:

  1. Practical Insights: Insurers possess deep knowledge of risk assessment and claim patterns. Their involvement can ensure that research focuses on real-world challenges and opportunities, making findings more relevant and actionable.
  2. Data-Driven Strategies: Insurance professionals can help identify data gaps and promote the use of quantitative models that accurately reflect the value of natural assets in risk mitigation.
  3. Collaboration with Stakeholders and Rightsholders: Over time, engaging with insurers fosters collaboration among various stakeholders (i.e., governments, environmental groups, and communities) and First Nations rightsholders will support a unified approach to natural asset management.
  4. Promoting Awareness: Insurers can lead the charge in educating clients about the benefits of natural assets, encouraging property owners to invest in green infrastructure and sustainable practices.
  5. Long-Term Cost Savings for Insurers and Their Clients: By advocating for NAM, insurers can help reduce claims over time, leading to lower premiums and more sustainable business practices. This proactive approach can enhance their reputation and customer loyalty.

Everyone has a stake in health natural assets.  Part of NAI’s role is to help people understand this.  As the Canadian insurance sector grapples with the challenges of a changing climate, the integration of natural asset management can be part of the long-term solution. By actively guiding research and fostering collaboration, insurance representatives can unlock the potential of natural assets, turning them into a powerful tool for risk reduction.

Embracing this approach not only protects the bottom line but also contributes to the broader goals of community resilience, affordable services, climate change mitigation, and supporting the biodiverse natural systems that underpin these.

view of calm waters through tree branches

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