Swiss Re has backed the findings of a recent study by students from Johns Hopkins University that explores the role of insurance as a response to the growing threat of pests and invasive species.
The report, titled “Building Resilience to the Economic Threat of Invasive Species”, found that efforts to manage invasive species cost more than $100 billion per year in the U.S alone, with some estimates placing the global cost at around $1.4 trillion.
Invasive species also pose a threat to public health and the environment, and the spread of these pests is being accelerated by migration, globalised transport, and trade, as well as climate change.
The study found that the level of public knowledge regarding the scale and breadth of the issue remains low despite the significant threats, although there is growing demand for methods to mitigate damages to businesses and communities.
It proposed that, by treating the spread of invasive species as an insurable peril, stakeholders can improve their risk management and financial preparedness through a mix of appropriate insurance options.
Alex Kaplan, Senior Vice President and Head of Global Partnerships North America at Swiss Re, concurred with the study, saying: “Insurance can help understand the impacts of these invasive species in terms of understanding risk, pricing risk, improving preparedness, and triggering rapid response mechanisms.”
Several cases in the Great Lakes region of North America were used to explore examples of lessons learned, best practices, cross border collaboration, and the challenges of policy gaps.
The study concluded that public and private stakeholders need to ramp up the collective effort to invest in effective invasive species strategies, with insurance representing one particularly promising avenue.