“Landscape architects can play a critical role in building the insurance case for nature-based solutions,” said Talley Burley, manager of climate risk and insurance at the Environmental Defense Fund (EDF).
In an online discussion on insurance and nature-based solutions moderated by ASLA CEO Torey Carter-Conneen, Hon. ASLA, Burley encouraged landscape architects to continue to innovate with these solutions and work with clients to lower risks. “Nature-based solutions are emerging, but replication and scalability remain difficult.”
Over this spring, EDF assembled nearly a hundred experts on insurance and nature-based solutions for a workshop. That dialogue resulted in the report Nature for Insurance and Insurance for Nature. It identified ways to use nature-based solutions to reduce risk and increase insurability. “The goal is to drive a nature-positive approach through insurance.”
The report also highlighted research being conducted by insurers and universities. For example, Swiss Re found that nature-based property protections in Florida, like mangroves and wetlands, reduced the frequency of insurance losses by 40 percent. And a study from University of California Santa Cruz found property protected by mangroves saw a 12 percent reduction in hurricane insurance premiums.
While these studies are promising, nature-based solutions still aren’t well accounted for by insurance companies. This is because “their catastrophe models don’t reflect natural solutions. The use zoomed out data that is not granular or localized,” Burley said.
“Their risk models also aren’t updated regularly. A landscape architecture project may reduce risk in an area, but that isn’t factored into the model and won’t be in a timely way.”
Talley said there are small-scale examples of nature-based solutions reducing risk. But the insurance discounts for these projects are nominal. “Insurers still need more data on nature-based solutions. They are looking for: How much less damage is there? How consistently do these solutions perform?” This is an area where landscape architecture firms and educators can help.
In an era of growing climate threats, the need for new approaches to insuring property couldn’t be greater. “Climate change is driving an increased frequency and intensity of natural disasters,” Burley said.
In 2023, there were $250 billion in economic damages from storms, floods, wildfires, and other disasters. But insured losses were significantly lower at $95 billion. “Too few people are insured for disaster, and in many communities, it’s difficult to find insurance at all.”
Approximately 85 percent of homeowners have traditional homeowners’ insurance. But that doesn’t cover flood insurance, which is separate and provided through the Federal Emergency Management Agency (FEMA). The cost of both homeowners’ insurance and flood insurance continues to increase.
And in Florida, Louisiana, and California, some insurance companies have pulled back on offering coverage all together, leading to significant losses in property values. “The only way to lower the cost of insurance and increase access to it is to lower risk,” Burley said. Climate adaptation approaches like nature-based solutions are a way to do this.
Boston’s city government is now investing in city-wide nature-based solutions to lower a range of climate risks. Their goal is to collect enough data to prove the efficacy of these solutions, so they can lower insurance rates for entire neighborhoods and fund multi-billion-dollar, multi-decade-long risk reduction projects.
Christopher Osgood, director of climate resilience for the City of Boston, said the city is facing three significant climate risks: coastal flooding, extreme heat, and increased stormwater.
Coastal flooding is a particular challenge because the city has 47 miles of coastline and much of the interior of the city is in the floodplain, which will only expand with sea level rise. The city is focused on current flooding, anticipated flood pathways in the city by 2030, and then transforming the entire city’s coastline.
The city has already undertaken more than decade of planning to reduce risks. “And now we are embarking on a decade of implementation,” Osgood said. The city has worked with leading landscape architecture firms like SCAPE, Sasaki, and Stoss Landscape Urbanism to develop plans that leverage a mix of nature-based and grey solutions.
Across the city, demonstration projects and data collection on flood risks and the efficacy of these projects are underway. More than a dozen short- and long-term projects to reduce flooding are in progress, including parks, shorelines, sea walls and storm surge barriers, and deployable flood walls.
Osgood said the city is collaborating with federal and state governments, local municipalities, transportation system authorities, and public and private property owners to plan, design, and finance district-scale investments. “The complexity of financing, ownership, and context is driving the way we are approaching this work.”
Boston’s interest in nature-based solutions for flood reduction is driving new conversations with insurance companies. In the near-term, the city seeks to accelerate recovery for individuals, families, and communities that experience flooding. “This involves Boston joining the Community Rating System in which communities can accrue points for risk reduction efforts,” Osgood said.
“If communities achieve a certain level of points, there is a reduction in the costs of insurance. Part of this is ensuring that nature-based solutions like habitat restoration are properly scored, so all the work landscape architects do can go to accruing points.” Parametric insurance is another approach the city is looking into.
In the mid-term, Boston is looking at how to reduce the consequences of flooding on a property insurance level. “This entails retrofits to property to reduce the costs of insurance.”
And over the long-term, the goal with insurance companies is to “reduce the probability of flooding,” he said. “How do we think of the insurance sector as a potential source of support for these larger-scale, multi-billion dollar, multi-decade projects across the city? This involves collaborating with other sectors to reduce the likelihood of climate impacts.”
“There is work we need to do to create a causal link between lower risk and nature-based approaches. We must collect data to show that these nature-based solutions work — that they reduce risk and actually improve our neighborhoods. We need to provide quantifiable benefits in the way the insurance industry embraces.”
The need to research the efficacy of these solutions led the City of Boston to partner with the Stone Living Lab, a unique organization that also counts as partners Boston Harbor Now, the University of Massachusetts Boston’s School for the Environment, the Massachusetts Department of Conservation and Recreation, the Massachusetts Executive Office of Energy and Environmental Affairs, the National Park Service, and the James M. and Cathleen D. Stone Foundation.
Joe Christo, co-director of the lab, said the lab provides a model for cross-sector collaboration on nature-based solutions. The group has used sites in Boston and eastern Massachusetts to explore solutions that provide multiple co-benefits, like sea walls that also enhance biodiversity.
They are also “collecting real-time data, 24/7, 365 days a year” on flooding in South Boston. The lab brings together scientists and policymakers into a network to discuss long-term policy solutions. These kinds of cross-sector collaborations are needed to move forward the case for nature-based solutions with insurers and communities.
