Insurers, Follow Swiss Re’s Lead and Make the Connection Between Biodiversity and the Billions We Spend on Physical and Mental Health Issues

A new report from global reinsurance giant Swiss Re puts in human terms the financial impact of biodiversity loss as the “twin risk of climate change.”

The paper, authored by Dr. Oliver Schelske, Natural Assets & ESG Research Lead, Swiss Re Institute, makes a compelling case how beneficial time spent in nature can be for physical and mental well-being through the lens of financial impact.

Swiss Re Institute takes the old Hippocrates adage, “Nature itself is the best physician,” as its credo, dividing the report into two main sections. The first, scientific insights into the health benefits of nature, focuses especially on the role of nature in mental health maintenance.

The report notes, “The global economic burden of mental illness is enormous, estimated at USD 2.5 trillion in 2010 and projected to reach USD 6.0 trillion by 2030…If the financial impact of mental health conditions was reduced by just 1 percent through time spent in nature, it could result in $60 billion annual savings by 2030.”

This is of particular concern to employers and by extension, health insurers – the report cites a 2002 study (Goetzel et al.) that the most common cause of workplace absence is mental health, followed by cancer.

As Schelske explains in the report, “The significant global mental health protection gap represents a large potential risk pool and consequently an opportunity for the insurance sector. Treatment coverage may be designed suboptimal. Insurers are recommended to develop product- and non-product related support for mental as well as physical health covers; and offer solutions with an emphasis on early prevention.” A separate study published in 2021 in Frontiers in Psychiatry bears this out.

Moving in the Right Direction

The researchers enacted an intervention program at Kent State University called “Right Direction” through a universal employee wellness program designed to “increase employees’ awareness of depression, reduce mental health stigma, and encourage help-seeking behaviors to promote mental health.”

Over the course of several post-intervention periods, “the predicted margin of employees seeking treatment for depression and anxiety increased.” Further, “employees seeking outpatient treatment for any mental health diagnosis increased during the first two post-intervention periods” as did antidepressant medication prescriptions.

While mental health treatment and the reduction of stigma generally can be viewed positively, the Swiss Re report makes the case for nature as a curative without the use of standard medical services.

As Schelske explains, “Most mental health costs are non-medical, including loss of productivity, reduced returns, or in extreme cases loss of staff…Nature’s support for mental health can be regarded as an ecosystem service.”

Particularly as it relates to loss of staff, this data is a call to action for employers. The post-pandemic so-called Great Resignation in the U.S., as reported via the Bureau of Labor Statistics has manifested in 4 million American workers quitting in July 2021. Resignations are highest in burnout-prone industries like healthcare and tech, which saw increased demand for services during the pandemic.

Green Space Linked to Good Health

Linked to but distinct from mental health, the report also homes in on the “integration of into the concept of individual health factors,” arguing that “green spaces provide benefits to the ‘Big Six’ lifestyle factors.”

These factors are: physical activities, social contacts, mental well-being, air pollution, heat exposure, and individual immunological resistance and Swiss Re notes that it “defines the health relevant risks that surround us as environmental risks.”

For example, the report cites data showing women who live in homes with access to more vegetation in the neighborhood had a 12 percent lower risk of all-cause non-accidental mortality than those with less vegetation in the immediate area.

Further respiratory disease mortality is 34 percent lower and cancer-related mortality was observed at a 13 percent lower rate, in addition to the fact that better mental health via lower levels of depression accounted for 30 percent of the benefit from green neighborhoods.

Air pollution is also identified as one of the major environmental risk factors for the Swiss Re team in its differentiation of urban and rural environments within the report, contributing to respiratory problems and lung cancer. The total amount of pollutants removed from U.S. trees and forests in 2010 was 17.4 million tons, representing a $6.8 billion reduction in human health costs.

Schelske explains that this emphasizes how nature-related elements in urban and suburban settings can benefit human health and increase economic savings. In addition, trees cool down cities and help prevent heat-induced mortality, which is increasing across the world due to climate change and frequent heat waves.

The Insurance Connection

On the strict insurance side of the report’s goals, Swiss Re notes that “there are many factors contributing to healthy policyholders – and we firmly believe that increased access to improved green, biodiverse spaces is one of those.

Bridging the story to property & casualty, insurance can provide a financial protection mechanism for the risks that greened environments face, whether green roofs against leakage due to heavy rain, or forestry insurance.”

The report notes that for these newer areas of insurance there may not be a loss history available, however, Swiss Re provides several criteria that underwriters and risk managers are likely to check including:

• Appropriate technology, equipment, installations, and risk management plans and processes available to protect the trees and plants against fire or drought.
• Clear ownership and management responsibilities.
• Skilled and experienced forest workers or urban gardeners available to take care of the plants.
• Adherence to local and regional conservation and biodiversity policies and avoidance of monocultures.
• Basic information such as tree species, annual growth rates, potential rotation periods, and silvicultural measurements.

The Swiss Re report, “Biodiversity and the Benefits for Human Health,” is available for download here. &