Post date 23 Mar 2026 (original LinkedIn date)
Original LinkedIn version· 1,408 words
‘Nomad Blood’ from her album, Nomad, by Martha Tilston
Last year, I wrote that the traditional insurance logic of mutualising episodic, uncorrelated risk is coming under growing strain in a world of systemic climate perils (https://www.linkedin.com/pulse/why-mutualisation-risk-may-possible-world-systemic-perils-eoin-murray-dcape/?trackingId=281VbtA7TamVJ3rTks8fkw%3D%3D). That argument still feels right, with floods, droughts, coastal erosion and wildfire becoming more frequent, more correlated and less comfortably absorbed within the old architecture of pooled risk. As that happens, the question is no longer just whether insurers can continue pricing risk as they always have. Rather it is what kind of resilience architecture is needed when the old assumptions begin to weaken. That, to me, is where restoration enters the story.
For all the excitement around nature-based solutions, we still tend to ask the wrong insurance question about restoration. The usual discussion is whether it lowers premiums. Well, the truth is that sometimes it might, but usually it won’t, at least not cleanly, not quickly, and not in a way that can support large-scale investment on its own. That is not because ecosystems fail to reduce risk. It is because insurance pricing is not a simple reflection of physical reality. It is an institutional outcome shaped by underwriting rules, reinsurance costs, capital treatment, portfolio effects, regulation and market structure. The erudite Sarah Conway has written about this extensively. That distinction matters, because it changes how we should think about restoration.
From a Rebalance Earth perspective, the point is not simply that nature reduces risk. It is that nature is finite, functional and financially productive. Restored catchments, wetlands, reefs and coastal systems are not decorative environmental extras. They are resilience infrastructure - they regulate water, reduce flood damage, improve water quality, stabilise landscapes and help protect communities, assets and supply chains. That makes them economically valuable long before any insurer decides to offer a discount.
This is where the insurance debate, I think, often loses its footing. Too much of the conversation still assumes that if restoration genuinely works, the evidence will eventually show up in lower premiums. But the more important financial outcome is often not price. It is actually access, in the sense that can cover still be written? Can assets still be financed and can infrastructure still function without spiralling risk costs? Or a step further, can public liabilities remain bounded rather than steadily increasing? These feel like the more important insurance questions.
In many ways, it is also the natural sequel to the mutualisation argument. If climate change is making risk harder to pool, harder to diversify and harder to price using historical assumptions, then the value of restoration lies less in producing elegant premium reductions and more in helping keep places, assets and systems within the boundaries of insurability.
The UK’s Flood Re scheme makes this particularly clear. Flood affordability in Britain is already not a pure market outcome, instead it is a managed one. We have effectively accepted that insurance availability in a higher-risk world requires institutional support, and that really ought to sharpen, not weaken, the case for restoration. If climate risk is pushing places towards the edge of insurability, then restoring the natural systems that moderate water risk is not just good ecology. It is part of the resilience architecture of the economy, of the country! Seen this way, restoration is best understood not as a premium-reduction story, but as an insurability-preservation story.
A restored floodplain may not dramatically cut next year’s household premium. But it may help keep risk within underwriting tolerances. It may reduce the probability of market retreat and with luck it may support mortgageability (is that a word?), asset values, infrastructure continuity and lower public balance-sheet stress. In a world of rising flood and water risk, that is not marginal, rather it is foundational.
Let’s expand our horizons. There are a few cases where restoration or land management does appear more directly in underwriting logic. The Tahoe Donner wildfire resilience policy is a striking example, because documented vegetation management was incorporated into the modelling itself. But that case is important precisely because it is unusual. It shows what is possible when resilience becomes legible inside pricing machinery. It does not mean every wetland, mangrove or catchment project will translate neatly into lower premiums. To me that is why RE’s framing matters.
The real opportunity is not to wait for insurance markets to spontaneously reward nature. It is to build the contractual and institutional architecture through which the beneficiaries of resilience pay for the resilience they depend on. Utilities benefit from better water regulation and lower treatment stress, while corporates benefit from fewer operational disruptions and stronger supply chains. On top of that insurers benefit from reduced tail exposure and preserved market access, and public agencies benefit from lower disaster costs, stronger regional resilience and better long-term adaptation outcomes. If those benefits are real, they should not sit unpriced in the background as a vague social good. They should be contracted.
That is the heart of our (the RE) model. Monetising nature’s resilience through long-term service contracts with beneficiaries. Not relying on a single environmental credit or waiting for voluntary goodwill. Building stacked, durable revenues around avoided losses, quality gains, compliance needs and adaptation value. Turning restoration into a cash-flow-generating infrastructure strategy rather than leaving it trapped inside grant dependence or abstract valuation studies.
This is also why water is such a powerful entry point. Like in the song, water is never still. Water risk is one of the clearest, most measurable and most investible expressions of climate risk. Too much water means floods. Too little means drought. Too dirty means pollution and system stress. Restoration can address all three. Concrete may buy time, but nature buys tomorrow.
This feels like a much stronger proposition than saying nature is nice to have, or even that it is worth valuing. It says restored ecosystems can function as critical national infrastructure and support place-based investment strategies that create resilience, revenues and wider prosperity at the same time. So maybe that is where the insurance conversation becomes genuinely useful. Not because it proves every restoration project will lower premiums. But because it reveals where resilience really sits in the economy, and why the beneficiaries of resilience should help pay for it. I believe that that point becomes even more important if the earlier mutualisation argument is right. If systemic perils are weakening the old insurance model, then restoration cannot be a side story. It becomes part of the answer to what comes next. Not a substitute for insurance, and not a cure for systemic risk, but a crucial part of the broader resilience architecture that helps keep risk governable, insurability intact and capital flowing.
Restoration does not need to produce immediate premium discounts to be financially decisive. Its deeper role may be to keep places insurable, assets financeable, communities resilient and public liabilities manageable as climate risk rises. That is not just a conservation story, but rather an infrastructure one. It is an investment story, and, increasingly, it is a prosperity story too. I’ll come back to this critical link between insurance and investment in a future article – rest assured, the former is vital to the latter. LMK what you think?
References
Murray, E. (2025) Why mutualisation of risk may not be possible in a world of systemic perils
Flood Re (2026) Our future. Available at: Flood Re website. Accessed 22 March 2026
GOV.UK (2026) Flood Re. Available at: GOV.UK. Accessed 22 March 2026
Loughborough University (2026) How the UK is keeping flood insurance affordable. until 2039. 20 February
Narayan, S. et al. (2025) ‘The spatially variable effects of mangroves on flood depths and losses from storm surges in Florida’, Cell Reports Sustainability
The Nature Conservancy (2025) TNC and Willis launch wildfire resilience insurance.
University of California, Berkeley, Center for Law, Energy & the Environment (2025) First ever wildfire resilience insurance policy written and placed
Willis Towers Watson (2022) Hurricane Lisa triggers first pay-out of Mesoamerican Reef Insurance Programme to finance immediate reef response in Belize
Willis Towers Watson (2023) WTW and MAR Fund reef insurance programme pays out to finance restoration after Hurricane Lisa
International Coral Reef Initiative (2022) First pay-out of Mesoamerican Reef Insurance Programme in Belize
Willis Towers Watson (2025) Willis and Rare partners to launch innovative insurance solution for fishers in the Philippines
Federal Emergency Management Agency (2026) Community Rating System. 23 January. Available at: FEMA. Accessed 22 March 2026