Natural habitats contribute to insurability

Global insurance firm Swiss Re released research on Florida’s coastline and its high exposure to storm surge. Natural protection helped lower the frequency of insurance claims from less severe weather events between 2009 and 2022.

Coastal habitats provide natural protection.

Analysts cross-referenced National Flood Insurance Program (NFIP) data with its own Biodiversity and Ecosystem Services (BES) Index. They focused on paid losses from Category 3 hurricanes or lower severity storms. Coral reefs, mangroves, salt marshes, and seagrass meadows reduce risk. After taking into account other flood risk factors, Swiss Re found that claim frequency was about 50% lower in areas with strong coastal habitat protection.

Ecosystem deterioration weakens flood prevention.

Coral reef deterioration alone could increase annual Florida coastal flood damages by $385 million. Gillian Rutherford, Head of Sustainability Markets at Swiss Re and co-author of the article, said, “The insurance industry can play an important role in supporting the preservation and upkeep of ecosystems. Incentives are aligned here… Such forms of coastal protection can contribute to more resilient properties and communities and to their insurability.”