Your models are more sophisticated than ever. You've invested millions in catastrophe modeling. You've refined your exposure analytics. Your pricing actuaries have access to better data than any generation before them.
And your loss ratios keep getting worse.
The 2023 US P&C industry posted a 101.6 combined ratio—still an underwriting loss. Homeowners lines hit nearly 110%, the worst result in over a decade. Severe convective storms alone drove $64 billion in insured losses. California's wildfire exposure has made entire markets uninsurable. Flood losses are accelerating faster than FEMA can update flood maps.
You can't model your way out of a risk that's physically getting worse. And that's the uncomfortable truth the industry is starting to reckon with.
the underwriting paradox
Insurers have always managed risk through two levers: pricing and selection. Price the risk correctly, or don't write it.
But climate-driven catastrophic risk breaks this model:
| Traditional Lever | Why It Fails |
|---|---|
| Better pricing | Raising premiums drives adverse selection—good risks leave, bad risks stay |
| Better selection | Entire geographies are becoming uninsurable, limiting viable markets |
| Better models | Models reflect deteriorating baselines—they show the problem, they don't fix it |
| More reinsurance | Capacity is tightening and pricing is spiking as reinsurers face the same math |
The paradox: every tool in your underwriting toolkit assumes a stable underlying risk. But the risk itself is escalating.
Wildfire seasons are 75 days longer than in 1970. The 100-year flood is becoming the 25-year flood. What was an outlier event is becoming the baseline expectation.
You can't insure your way out of a burning landscape. Someone has to reduce the fuel load.
the third lever: risk reduction at source
What if instead of just pricing catastrophic risk, you could actually reduce it?
This isn't theoretical. The evidence is clear:
- Wildfire: Fuel reduction treatments reduce fire severity by more than 60%. A treated landscape burns differently—or doesn't burn at all.
- Flood: Restored wetlands can reduce flood peaks by 15-30%. Floodplain reconnection stores water upstream instead of downstream in your insured properties.
- Coastal: Natural mangrove barriers can reduce wave heights by 13-66% and storm surge by up to 48cm per kilometer of forest width.
These aren't conservation projects. They're risk reduction assets.
The problem? They require upfront capital, ongoing maintenance, and long time horizons—none of which fit traditional insurance economics. You're built to pay claims, not fund landscape interventions.
ensurance: proactive funding for ecological risk reduction
Ensurance is the missing mechanism. It's not insurance. It's the funding layer that makes natural risk reduction assets investable at portfolio scale.
Here's how it works:
1. identify high-exposure corridors
Start with your own book. Where are your insured values concentrated? Which ZIP codes are driving your wildfire CAT losses? Which watersheds feed your flood-exposed portfolios?
You already know this. Your models show exactly where your exposure concentrates.
2. fund targeted interventions
Ensurance certificates are onchain instruments tied to specific natural assets. Buy certificates for:
- Fuel reduction treatments across WUI zones protecting your insureds
- Wetland restoration upstream of flood-prone portfolios
- Forest health projects that reduce wildfire ignition and spread
- Coastal buffer restoration that attenuates storm surge
These certificates are tradeable, verifiable, and tied to real outcomes. They're not donations—they're risk reduction positions.
3. measure and verify outcomes
MRV (Measurement, Reporting, and Verification) systems track what actually happens. Did the fuel treatment reduce modeled fire spread? Did the restored wetland attenuate the flood peak? Did the insured losses in the treated corridor decline relative to the control?
This data feeds back into your pricing. Verified risk reduction becomes actuarially credible.
4. share costs across the portfolio
Ensurance syndicates let multiple carriers pool capital for regional interventions. If five insurers share exposure in the same wildfire corridor, they can share the cost of protecting it.
The math works differently when you're reducing the underlying risk, not just transferring it.
the case for intervention economics
Let's run the numbers on a hypothetical wildfire corridor:
| Factor | Without Intervention | With Intervention |
|---|---|---|
| Insured values | $2 billion | $2 billion |
| Expected annual loss | $40 million (2% of TIV) | $16 million (0.8% of TIV) |
| Intervention cost | $0 | $5 million upfront + $500k/year |
| Net annual savings | — | $23.5 million |
| Payback period | — | <3 months |
This is conservative. Real-world fuel reduction programs in California have demonstrated even more dramatic loss reductions in treated areas versus controls.
The ROI on risk reduction often exceeds the ROI on your investment portfolio. But it's invisible to traditional accounting because it's not a recognized asset class.
Ensurance makes it visible. Certificated. Tradeable. Investable.
what's different about ensurance
This isn't the first time someone has suggested insurers fund loss prevention. So why hasn't it worked?
| Past Approaches | Why They Failed | Ensurance Approach |
|---|---|---|
| Community rating discounts | Didn't scale—individual incentives, collective action problem | Syndicate model pools capital at portfolio level |
| Mitigation grants | One-time, political, insufficient scale | Perpetual proceeds from trading activity |
| Parametric products | Still reactive—pay out after events, don't reduce them | Fund interventions that prevent events |
| Conservation partnerships | Nice PR, no underwriting credit | MRV creates actuarially credible risk reduction |
Ensurance is built for the insurance use case:
- Certificated: Each instrument is tied to a specific natural asset with clear boundaries and ownership
- Verifiable: MRV systems track outcomes that feed into pricing models
- Tradeable: Positions can be bought, sold, and hedged like any financial instrument
- Perpetual: Ongoing trading activity generates ongoing funding, not one-time grants
- Portfolio-scale: Syndicates let you fund corridors that match your exposure geography
the reinsurance angle
If you're a reinsurer, the math is even more compelling. You're taking on the tail risk from hundreds of primary carriers, concentrated in the same catastrophe-prone geographies.
Ensurance syndicates at the reinsurance level can:
- Fund regional resilience corridors that reduce aggregate exposure across multiple cedants
- Create portfolio-wide risk reduction that improves retro pricing
- Demonstrate to investors and regulators that you're actively managing systemic risk, not just pricing for it
The reinsurer who funds the fuel reduction is the reinsurer who gets the treaty. Ceding companies will follow capacity, and capacity will follow risk reduction.
real examples
wildfire risk corridor
A P&C carrier maps its California wildfire exposure. 60% of expected CAT losses come from a 50,000-acre corridor in the WUI. Working with land trusts and state forestry, they fund ensurance certificates for targeted fuel reduction.
Three years later: modeled fire spread in the treated area is 40% lower. Actual losses in a fire season track 35% below the control. The carrier files a rate reduction in the treated ZIP codes—gaining market share from competitors still pricing to the old baseline.
flood buffer investment
A regional carrier with concentrated Mississippi River flood exposure funds wetland restoration certificates upstream of their portfolios. 2,000 acres of restored floodplain provides an estimated 18% reduction in 100-year flood peaks.
When the flood comes, claims in the protected portfolio run 22% below model. The carrier gains three years of favorable loss experience against competitors in the same geography.
syndicate risk mitigation
Five mid-size carriers with overlapping wildfire exposure in Colorado form an ensurance syndicate. Together they fund a 100,000-acre resilience corridor—treatments none could afford alone.
The syndicate structure means shared costs, shared data, and shared underwriting credit. When one of the five drops coverage in a disputed zone, the remaining four have first-mover advantage on the improved book.
getting started
If this model makes sense, here's how to explore it:
- Map your exposure — Identify the geographies and perils driving your CAT losses
- Model the intervention — What ecological interventions would reduce the risk? What would they cost? What's the expected loss reduction?
- Talk to us — BASIN structures ensurance syndicates and connects carriers with restoration partners, MRV providers, and syndicate co-investors
- Start small — Pilot a single corridor. Measure results. Scale what works.
the bottom line
Your models aren't broken. They're showing you the truth: the underlying risk is getting worse, and no amount of pricing sophistication will change that.
The insurers who thrive in a climate-disrupted world won't be the ones with the best models. They'll be the ones who figured out how to reduce the risk itself.
Ensurance is how that happens.
Explore more:
- How ensurance works — The proactive protection model
- The 15 ecosystem types that underpin your portfolio — Understanding your natural capital exposure
- Nature risk assessment — From TNFD disclosure to action
- Solutions for insurers — Our services for P&C carriers and reinsurers
frequently asked questions
how is this different from existing insurer-funded mitigation programs?
Existing programs tend to be one-time grants, individual property-focused, or PR-driven. Ensurance is portfolio-scale, perpetual (ongoing trading activity generates ongoing funding), and MRV-backed for actuarial credibility. The instruments are tradeable financial positions, not donations.
does this create actual underwriting credit?
Not automatically—you'll need to work with your regulators and actuaries to establish credibility. But MRV data provides the evidence base for risk reduction. Carriers who can demonstrate measurable loss reduction in treated areas have a path to rate credit. Early movers will help establish the precedent.
what's the minimum investment to pilot this?
It depends on the intervention type and geography. Wildfire fuel reduction typically runs $500-2,000 per acre. A meaningful pilot corridor might require $1-5 million. Syndicates can reduce individual carrier exposure while maintaining portfolio-level impact.
can reinsurers participate directly?
Yes. Reinsurer-led syndicates can fund regional resilience corridors that benefit multiple cedants. This can be structured as a condition of treaty renewal, a loss participation mechanism, or a standalone risk reduction vehicle.
what happens if the intervention doesn't work?
Natural systems are complex—not every intervention succeeds. MRV tracks actual outcomes, not just activity. If a treatment doesn't reduce modeled risk, you learn that. The certificated structure means you can exit positions or redirect capital to more effective corridors.