Exploring the potential of human-wildlife conflict insurance as an innovative finance solution

Janko Ferlic
Janko Ferlic

UNDP is exploring innovative ways to unlock the potential of human-wildlife conflict insurance. The Biodiversity Finance Initiative (BIOFIN) and The Insurance & Risk Finance Facility (IRFF) – two UNDP programmes - recently held a workshop with partners, including WWF, to explore ways insurance can be used as a finance solution to help keep people, wildlife, assets, and habitats safe in the face of human-wildlife conflict. 

Human-wildlife conflict (HWC) is a growing problem across the world. As human populations expand and natural habitats shrink, people and animals are increasingly coming into conflict. On the one hand, people can lose crops and livestock, and sometimes their lives, while on the other, animals and habitats are regularly endangered. 

That is why BIOFIN and IRFF came together to explore insurance-related finance solutions and schemes to financially offset affected individuals for their losses whilst at the same time contributing to the protection of animals and habitats. 

Workshop participants discussed the fact that insurance can act as a risk transfer tool – encouraging coexistence between communities and wildlife by reimbursing a community’s losses and bring sustainability to existing activities.

HWC remains a major conservation challenge for many.  There have been several compensation and insurance programs in this area during last many decades spending at least a quarter of a billion US dollars.  

To improve the overall effect of HWC insurance, there is a need to also invest more in risk reduction practices that will not only decrease the number of incidents but will also bring down the insurance and compensation costs. Also, to fully benefit from the insurance and risk financing for HWC, there is a need to create enabling conditions, such as better monitoring and data collection systems; early warning systems and safer outdoor working conditions; and better community information systems. 

Further to this, more hazard data can help realize the potential of risk transfer instruments, by helping in risk modelling, quantifying, and pricing. As such, ‘risk design studies’ would be required in selected countries to identify the risk financing gap as well as to create models to calculate fair payouts.  

Countries interested to learn more about the potential of insurance as a finance solution, including applications to human-wildlife conflict, are encouraged to discuss further with their BIOFIN technical advisors or the global team.