European insurance watchdog calls for stronger biodiversity risk management

A new report by the European Insurance and Occupational Pensions Authority (EIOPA) urges insurers to integrate biodiversity loss into their risk frameworks, warning that ecosystem degradation poses growing financial and operational threats. The report finds that while climate risk is now widely embedded in insurance practices, biodiversity remains an emerging—and largely unquantified—challenge.

EIOPA’s analysis shows that loss of natural ecosystems can affect insurers through increased claims, asset devaluation, and disrupted supply chains. Yet most firms still lack clear strategies or data to assess their exposure. The authority calls for improved risk mapping, scenario analysis, and alignment with EU initiatives such as the Sustainable Finance Disclosure Regulation and the Nature Restoration Law.

To build resilience, EIOPA recommends that insurers work with scientific bodies and regulators to develop consistent metrics for biodiversity-related losses, integrate them into underwriting and investment decisions, and expand nature-positive financing. The report concludes that tackling biodiversity loss is not only an environmental duty but a matter of long-term financial stability for Europe’s insurance sector.