Insurance for Nature: How Parametric Models Can Protect Biodiversity
The first BIO-CAPITAL Deep Dive opened with Ahmet Rasim Demirtaş of Agcurate BV, who offered a striking perspective on a financial tool not usually associated with ecology: insurance. But in a world of more frequent storms, droughts and floods, he argued, insurance can become a mechanism not just for compensation, but for conservation.
Traditional insurance waits for damage to occur and then sends assessors to calculate losses — a slow and often disputed process. Parametric insurance works differently. It relies on objective, measurable environmental data: rainfall below a certain level, wind above a threshold, rivers overtopping their banks. When the data crosses the trigger, the payout is automatic. No forms. No inspections. No delays.
From Climate Shocks to Safety Nets
Demirtaş described how this speed and transparency can make a crucial difference for nature. In Alpine forests, for example, a storm can wipe out trees that were storing carbon and generating revenue through carbon credits. A rapid insurance payout allows restoration to begin immediately, keeping the project viable. Farmers shifting to regenerative practices often face short-term yield losses; insurance can cushion that financial risk and give them confidence to stay the course. And in wetlands or grasslands, where floods can destroy years of ecological restoration, parametric payouts can finance repairs the moment water levels spike.
Within BIO-CAPITAL, parametric models are not viewed in isolation. They sit alongside other tools such as Payments for Ecosystem Services (PES) and Triple Capital Accounting, creating a financial architecture designed to reward long-term stewardship while protecting projects against sudden shocks. Insurance becomes both an enabler — encouraging people to adopt nature-positive practices — and a safety net, ensuring those efforts aren’t wiped out in a single disaster.
From Coral Reefs to an Idea and Concept
What once sounded experimental is already becoming real. Coral reefs in Mexico are insured against hurricane damage; mangroves in the Caribbean are protected through parametric triggers linked to storm events; wetlands in China are covered against droughts, floods and wildfires. The idea is spreading: biodiversity is an asset, and like any asset, it can be protected.
Demirtaş’ message was direct: if we want nature-based solutions to scale, we must make them financially resilient. Parametric insurance does exactly that — turning environmental risk into measurable triggers, and ecological restoration into something investors can trust will endure.
