The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing how (re)insurers in Europe are identifying, measuring and managing biodiversity-related risks as part of their risk frameworks. The report highlights emerging market practices but concludes that approaches remain at an early stage, with material constraints in metrics and modelling that limit actionable assessments. Around one in five undertakings references biodiversity in its Own Risk and Solvency Assessment (ORSA), but current assessments are largely qualitative and biodiversity loss is mainly considered through a reputational lens. The report points to practical challenges including the lack of global metrics, the regional specificity of biodiversity, and difficulty in disentangling biodiversity risk from climate-related risk, despite the close “climate-biodiversity nexus” that can amplify impacts such as natural catastrophe losses. The work is linked to EIOPA’s mandate under Article 304(c)(3) of Directive EU 2025/2 to evaluate whether, and to what extent, (re)insurers assess material exposure to biodiversity-loss risks within the assessment referred to in Article 45(1). EIOPA plans further stakeholder engagement to prioritise areas for action, including data availability, development of models and scenarios, and risk-based measures to manage biodiversity risks. Work will also focus on better understanding biodiversity-climate interactions, including potential benefits of nature-based adaptation measures for addressing natural catastrophe insurance gaps, alongside capacity building through a structured dialogue between supervisors and industry.
European Insurance and Occupational Pensions Authority 2025-06-30
European Insurance and Occupational Pensions Authority finds European (re)insurers’ biodiversity risk management remains largely qualitative and plans further stakeholder engagement
The European Insurance and Occupational Pensions Authority (EIOPA) released a report evaluating how European (re)insurers address biodiversity-related risks, finding current practices are nascent with significant limitations in metrics and modelling. Biodiversity is often considered qualitatively and primarily through a reputational lens, with challenges in distinguishing it from climate-related risks. EIOPA plans further stakeholder engagement to enhance data, models, and risk-based measures, and to explore biodiversity-climate interactions and nature-based adaptation benefits.