The Philippines is one of the countries most exposed to climate change, and 2020 was one of the worst typhoon seasons in decades. Nature-based solutions such as restoring mangroves and coral reefs provide a cost-effective way to reduce climate risks, but have yet to be used by the insurance and reinsurance sector to align the incentives created by their underwriting with protecting and restoring these natural assets.
On February 17th 2021, Earth Security launched a new programme to help the insurance and reinsurance sector in the Philippines to capture some of these opportunities. The programme will help develop innovative products, underwriting models and partnerships as part of the sector’s climate leadership. By underwriting risks to companies in every industry sector, the insurance and reinsurance sector can play a catalytic role in sending market signals for companies to incorporate the value of nature more actively in their business models.
Earth Security has identified three strategic opportunities, which it will develop in collaboration with various stakeholders across industry, policy and civil society:
- Integrate the value of nature into risk modelling and pricing in insurance underwriting. We create mechanisms that can capture the ‘risk reduction’ value provided by ecosystems such as mangroves and coral reefs so that they can be integrated in underwriting of products.
- Piloting a ‘mangrove insurance product’ in the Philippines. We will work alongside global insurance companies such as AXA-XL and local stakeholders to develop and pilot a mangrove insurance product in a selected municipality in the Philippines.
- Support an insurance sector commitment for nature-based risk reduction. We will support an insurance company or group of companies to develop a tangible commitment to advancing nature-based solutions, working alongside leading NGOs to formulate high-impact industry leadership.
“PIRA is excited to be part of Earth Security’s ground-breaking effort to marry insurance and nature-based solutions with a viable and sustainable business model” - Mitch Rellosa, Executive Director, Philippines Insurance and Reinsurance Association (PIRA)
Watch the webinar recording here.
The programme kicked-off with a webinar, attended by 30 senior leaders from the insurance and reinsurance sector in the Philippines and global industry leaders.
Speakers:
- Mitch Rellosa, Executive Director, Philippine Insurers and Reinsurers Association.
- Erickson Balmes, Deputy Commissioner, Insurance Commission.
- Chip Cunliffe, Director, Sustainable Development AXAXL; Chair, Ocean Risk and Resilience Action Alliance.
- Jaqueline Wharton, Head of Ecosystem Resilience, Climate and Resilience Hub, Willis Towers Watson.
- Ricky Nunez, Country Executive Director, Conservation International Philippines.
- Max Robert Ventura, President, Philam Foundation.
- The discussion was chaired by Alejandro Litovsky, Founder & CEO, Earth Security.
Earth Security’s work in the Philippines includes a programme with the Asian Institute of Management (AIM) that is working with 10 local mayors from municipalities vulnerable to climate change, alongside 10 Filipino companies, to define innovative partnerships for nature-based climate adaptation finance, including insurance models. The convening of the insurance track is done in collaboration with the Philippine Insurers and Reinsurance Association (PIRA) and the participation of NGOs and other local stakeholders, including Conservation International Philippines.
Earth Security is grateful to the International Climate Initiative of the German government for the support for this programme.
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