The People’s Insurance Company Group of China (PICC) has introduced China’s first national forest biodiversity insurance program.
The insurance policy, which is specific to the Longguan Township in Ningbo, Zhejiang, aims to preserve biodiversity and enhance environmental resilience, the company said.
The policy covers biodiversity loss caused by natural catastrophes, the introduction of other species, animal assaults, vegetation loss, and damages from human activities such as project building. Compensations are topped at 2m yuan (US$275k).
Drones to aid in loss investigations
Longguan Township, located in Ningbo’s Haishu district, is an area with rich biodiversity, including 2,200 biological species and a forest coverage percentage of around 50%.
The region attracts more than 1 million visitors annually, and the integration of tourism and biodiversity conservation is seen as a promising opportunity. The implementation of the biodiversity insurance policy in Longguan Township is part of the government’s efforts to protect and restore the environment.
The PICC branch in Ningbo will use drones to track and investigate losses in the event of an accident, and provide compensation quickly to aid in post-disaster recovery and restoration efforts.
The PICC said it is committed to developing similar products related to biodiversity, including insurance coverage for locally produced carbon offsets known as China Certified Emission Reductions (CCERs).
In addition, other Chinese insurers, such as China United Insurance, have shown interest in creating insurance products to aid in the preservation and restoration of nature.
Insuring nature
The concept of “insuring nature” is still in its early stages, but other initiatives exist.
PICC signed an insurance policy earlier this year for roughly 500,000 acres of forest in Yantai city, Shandong province, with a coverage of 51.71m yuan (US$7 mn), as a tool to safeguard nature-based carbon sinks in the area.
Meanwhile, The Nature Conservancy (TNC), a conservation organization purchased a US$2m insurance coverage for coral reefs in Hawaii, which would help protect and restore the reefs in the event of substantial storm damage.
TNC has also partnered with regional governments in Mexico and Swiss Re to safeguard and maintain the coral reef off the Yucatan Peninsula using an insurance solution.
