In the quest for a more sustainable future, the insurance industry is stepping up to play a key role in supporting the growth of the blue economy, according to a recent Swiss Re Institute report.
As waterways and oceans continue to be recognized as important sources of life on Earth and in the global economy, insurance solutions are emerging as a means of transferring and absorbing the risks associated with sustainable aquatic development.
The International Finance Corporation (IFC) defines „blue finance” as the use of financial instruments, including insurance, to promote the sustainable use of marine and freshwater resources.
Aligned with the United Nations’ Sustainable Development Goals (SDGs), the Blue Fund aims to finance a blue economy while reducing carbon emissions, pollution and biodiversity loss.
Setting ambitious goals for green and sustainable economic growth, China has adopted the concept of blue finance.
The Chinese context serves as a foundation for identifying significant risks in marine and freshwater projects, such as natural disasters, environmental pollution, regulatory requirements, and improving customer behavior.
To address these risks, insurers offer a variety of coverage options. Traditional insurances, such as property, engineering and environmental damage liability insurances, can cover sustainable plastics production facilities and offshore renewable energy projects.
In addition, insurers are exploring innovative solutions such as production liability, agricultural, marine and business interruption covers.
As the blue economy expands, new risk pools are expected to emerge. For example, marine carbon sink index insurance and nature-based insurance solutions are being explored to protect marine ecosystems.
The evolving landscape of energy and carbon capture technologies offers opportunities for advanced risk transfer solutions. Insurers are expected to focus on product design, collaboration models and risk management services to meet the growing demand for risk protection.
Also, insurers are looking to establish cross-sector collaborations by focusing on “Insurance + Services” and “Insurance + Financial Loans” business models.
By working closely with public sector organizations and corporate stakeholders, insurers can contribute to the sustainable development of the blue economy.
Consolidation of available financial resources and services will enable insurers to provide comprehensive support.
