Second Innovation Challenge in Colombia: Biodiversity and Insurance

Investments in biodiversity aim to protect and restore nature through various strategies and projects. However, these investments face risks that can impact their success or deter potential investors. To address this, tools are needed to manage risks and mitigate losses in the event of adverse outcomes.

From August 2 to 5, 2024, the "Second Innovation Challenge: Biodiversity and Insurance" took place, aimed at promoting the creation and development of insurance products to protect biodiversity in Colombia. This initiative was led by UNDP Colombia (IRFF, BIOFIN, and UNDP Accelerator Labs), Fasecolda, and Banca de las Oportunidades. It included three outreach sessions that covered topics such as insurance against natural disasters, biodiversity investments, and the potential for collaboration between insurers and conservation organizations.

The challenge brought together 20 organizations, including insurers, reinsurers, microfinance institutions, and conservation groups. These organizations formed six teams, each presenting proposals to promote sustainability and resilience in ecosystems and communities.

Teams that went beyond merely presenting a new insurance product were awarded for their innovation. They focused on the territorial context, addressing issues such as human-wildlife conflicts and strategic ecosystems like páramos, and incorporated creative risk management strategies.

First place was awarded to the team formed by Previsora Seguros, South Pole, AON, Banco Contactar, and Pipra, for their proposal "NatInsure." This solution aims to ensure the success of investments in conservation projects, habitat banks, and protected areas, while benefiting local communities and mitigating human-wildlife conflicts.

The winning team will have the opportunity to participate in the UNDP Insurance Innovation Lab, in coordination with the Insurance and Risk Finance Facility (IRFF), BIOFIN, and the Accelerator Lab. They will receive technical assistance for structuring, designing, and launching their prototype.

Second place went to the team formed by Seguros Sura and WWF for their initiative "Water Insurance," a preventive parametric insurance scheme designed to protect páramo ecosystems from fires. This team will receive capacity-building support, including specialized training in conservation and biodiversity investment insurance.

The two winning initiatives will be showcased at the Fasecolda Side Event on Friday, October 25, 2024, during the COP16 on Biodiversity in Cali.