Nature on the Balance Sheet

By Beatrice Gaita 

When most people hear the word nature, they think of forests, wildlife or national parks. Insurers should think of something different: risk. Healthy ecosystems regulate floods, sustain agriculture and protect coastlines. As these natural systems deteriorate, the frequency, severity and uncertainty of insured losses increase. Nature is no longer simply an environmental concern; it is becoming a balance sheet issue. 

The evidence is difficult to ignore. WWF’s Living Planet Report 2024 records a 73% average decline in monitored wildlife populations since 1970, with Africa’s decline even steeper at 76%. At the same time, over half of global GDP depends on natural capital and ecosystem services. These are not simply environmental statistics. They signal that the natural systems underpinning economies, businesses and communities are becoming less resilient. When pollinators decline, agricultural production becomes less reliable. When wetlands disappear, flood risks increase. The claims department may never use the word biodiversity, but it will certainly recognise the cost. 

Across Africa, this relationship is already evident.  Along West Africa’s coastline, the loss of mangroves and coastal wetlands has reduced natural protection against storm surges, flooding and erosion, increasing risks to communities, businesses and critical infrastructure. For insurers, these changes challenge the reliability of historical loss data and traditional pricing models that ignore ecosystem degradation. This is not prudent underwriting; it is hope with a premium attached. 

Nature also presents opportunities. The global biodiversity financing gap is estimated at around US$700 billion annually, while nature-positive investments continue to expand across Africa. As long-term institutional investors, insurers can finance resilient infrastructure, sustainable agriculture and ecosystem restoration, strengthening the natural systems that reduce future losses. 

Insurance has always been about understanding risk and recognising opportunity where others see uncertainty. Nature is increasingly redefining both. African insurers that embed nature into underwriting, investment decisions and products will be better equipped to manage emerging risks, unlock new opportunities and build more resilient portfolios.  

Nature is not outside the business of insurance; it is becoming fundamental to it. The sooner this perspective moves from the sustainability team into the underwriting room, the investment committee and the boardroom, the better prepared African insurers will be for the decades ahead. 

Beatrice Gaita is a sustainability expert with over five years of experience bridging nature, climate risk, and finance across Africa. Specializing in ESG analysis, natural capital, and sustainability reporting, she holds an MSc in Environmental Studies and a BSc in Wildlife Management.