• New Nonprofit Initiative: Insurance for Good is established to serve as a central platform for disaster insurance research and information.
• Focus on Risk Transfer: The nonprofit aims to use innovative risk transfer methods to support social and environmental goals and improve disaster recovery.
• Educational and Policy Support: Plans include capacity-building, research-driven policy reforms, and fostering innovation in insurance practices.

A coalition of climate, finance, and insurance experts has launched Insurance for Good, a nonprofit aimed at reshaping disaster risk management and enhancing resilience within the United States. The organization’s goal is to serve as a comprehensive platform for research, innovation, and resources in disaster insurance, addressing a critical market need highlighted by escalating natural disaster risks.

Mission and Vision:

Insurance for Good seeks to harness risk transfer methods—tools that shift financial risks from one party to another—in service of broader social and environmental objectives. The nonprofit aims to create solutions that bolster the disaster recovery process, support regulatory and policy reform, and spur innovation in the insurance market to keep pace with the changing climate.

“Our failure to decarbonize has locked us into ever-rising physical risks ranging from hurricanes and wildfires to salt-water intrusion and drought,” said Carolyn Kousky, the nonprofit’s founder and associate vice president for economics and policy at the Environmental Defense Fund. “Insurance is no longer something that can be assumed or expected. People, governments, and institutions need to develop risk and insurance literacy—and fast.”

Barriers and the Need for Change:

Kousky’s decades of work in disaster insurance illuminated the need for a shift in how risk is perceived and managed. Traditional risk management approaches often assume stability in risk levels, but the current landscape demands a radical rethink. The Insurance for Good initiative responds to gaps in understanding and the limited availability of affordable, effective insurance solutions.

Key Areas of Focus: The nonprofit will concentrate on four core activities:

1. Resource Sharing: Develops platforms for curated information and a newsletter to enhance risk understanding.
2. Capacity Building: Offers targeted training and community engagements to improve insurance literacy.
3. Innovation Incubation: Accelerates new policies and tools through open-source collaboration to adapt and launch pilot programs.
4. Policy Reform: Supports research-driven efforts for regulatory changes that align risk transfer markets with societal goals.

“Insurance for Good will focus on being a trusted partner for communities and the public sector, ensuring that disaster insurance supports social and environmental aims,” said Kousky.

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Market Context:

The formation of Insurance for Good comes amid rising concerns over the fragility of current insurance systems, stressed by climate change and economic factors. During a Senate Budget Committee hearing earlier this year, parallels were drawn between the current home insurance market and the pre-2008 housing crisis, noting a sharp rise in premiums tied to severe weather events.

Kousky emphasized that the solution will not come from a singular approach but rather from a coordinated mix of tools tailored to different needs. “Innovation in any sector requires a dedicated team, a detailed understanding of the problem, out-of-the-box thinking, and the time and resources to bring ideas to life,” she noted.

Kousky and her team encourage broader participation and collaboration, stating that only through shared efforts can the insurance sector pivot toward supporting a resilient, just, and nature-positive future.

“As our insurance markets are beginning to break, now is the time to act. Prices are escalating, making protection impossible for many to afford—particularly those that need it most,” Kousky added.

The Insurance for Good initiative aims to bring stakeholders together to reimagine insurance as a powerful tool for climate adaptation and disaster resilience, aligning economic practices with sustainability and equity.

What Does This Mean for ESG?

The launch of “Insurance for Good” represents a significant alignment with core ESG principles by directly addressing risks associated with natural disasters, which are increasingly linked to climate change. Here’s how it connects to ESG:

1. Environmental Impact: By creating tailored insurance solutions for communities vulnerable to natural disasters, this initiative supports climate adaptation strategies. It also encourages resilience-building, reducing long-term environmental degradation caused by unmanaged disaster recovery efforts.
2. Social Responsibility: “Insurance for Good” prioritizes protecting underserved and vulnerable populations. This focus exemplifies the “S” in ESG, promoting equitable access to financial security and fostering stronger, more inclusive communities.
3. Governance and Innovation: The initiative’s approach highlights the importance of transparent governance and innovative partnerships in addressing global challenges. By integrating sustainable financing models into traditional insurance, it sets a precedent for how financial institutions can adapt to meet ESG goals.

This initiative underscores the growing role of the insurance sector in mitigating climate risks and advancing sustainability, further demonstrating that ESG-aligned strategies are both impactful and essential for long-term success.

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