Axa Climate eyes lead position in nature insurance market

By Rebecca Delaney

Feb 10 - (The Insurer) - Axa Climate, the sustainable insurance and consulting arm of the French insurance giant, is continuing its push to make Axa “the insurer of nature” in 2025 despite the annual renewal cycle continuing to act as a barrier to long-term projects and initiatives.

Speaking to Sustainable Insurer, Toby Behrmann, head of London market and public-private partnerships at Axa Climate, underlined the importance of nature-based solutions.

“On the insurance side, Axa Climate and Axa XL, which is our carrier, are looking to be the insurer of nature, or the insurer of good. Axa as an organisation is a life and health insurance company, and there's nothing more vital than the health of the world,” he said.

Axa Climate’s work in nature-based solutions is centred around three pillars: marine ecosystems, forestry, and regenerative agriculture.

Last year Axa Climate was renewed as insurance capacity provider for the fourth annual placement of the Mesoamerican Reef Fund’s insurance programme. In collaboration with WTW, the programme was scaled up in 2024 to include two more sites in both Honduras and Belize, expanding the portfolio to a total of 11 reef sites.

And in October, Axa Climate renewed its cyclone cover for the Blue Alliance’s Marine Protected Areas in the Philippines, a partnership that began in April 2023 to promote a regenerative approach to marine ecosystem protection.

“Insurance contracts are typically one year. When you're looking at weather risk and climate change, it's difficult to start pricing things in the future,” Behrmann continued.

“We often insure the starting phase of these programmes, the initial programme operation – for example, the first year of planting mangroves where, if there was a tropical cyclone, they could be really affected.”

Axa Climate has adopted the same approach for the carbon markets. Rather than developing a product to protect against delivery or liability risk, the firm looks to provide coverage for the underlying asset, such as mangroves or areas of forestry.

“There's a lot of interest in the carbon markets but it is so unregulated, especially the voluntary carbon market, that it's difficult to know what to insure. All the way down the chain there's different things that can be insured,” said Behrmann.

“Again, it’s the time scale – because the credits last 30 years, we focus on the start of the programmes when they're planting the trees. We're trying to find out what works and what doesn't, testing into it so that as things expand we can be there as a lead player. This is not a short term thing, this will happen over a number of years.”

On the insurance side of the business, Behrmann said the recent signals of intent by the Trump administration around future climate and environmental policy are unlikely to have a significant impact on London market operations.

“As an insurance company, our job is to understand risk and to always look for the future,” he said. “The political situation is, in a way, irrelevant. We still need to understand the risk, we still need to provide the products that the clients want, and we still need to manage our own book.”

However, Behrmann noted there may be some impact on large public sector programmes in developing countries as a result of greater scrutiny on US federal government spending and donor initiatives.

“It may impact the future, because the US was funding the development of some of the big programmes,” he said.

“Interestingly, the US had never really done much in disaster resilience before, but in the last couple of years they suddenly started putting cash into this. Now they have pulled out again, so yes, there could be programmes that would have been funded that aren't on the public sector side.”

Théophile Bellouard, vice president of Axa Climate’s Altitude platform, added that the business continues to see interest in companies to undertake climate risk assessment and analysis, regardless of the political landscape.

“From the services perspective, even if there is a lot of reaction and political activity, on the corporate side, we see companies taking a step back and trying to see the longer term,” said

“Indeed, when we're talking about risk and resilience, it's not about ESG convictions, it's about business continuity. With that perspective, we haven't faced a big step back in the market. People are still looking to integrate resilience by design and understand climate risks.”

Altitude provides scientific data through Saas products to help companies across various sectors to better understand the importance of climate risk management, as well as supporting sustainable investment strategies.

Bellouard noted that the platform has seen particular interest from large industrial corporates looking to embed climate resilience and adaptation into the financing of new projects, including energy projects, transport, telecom projects and data centres.

“On the service side, the idea is to leverage our data and modelling capabilities that are primarily used for insurance to create value for clients,” said Bellouard.

“The sector we've been working on since day one is private investment and private equity infrastructure. It's super receptive, and it’s interesting to see investors are asking for more data and more transparency on risks to do their work properly. That’s where we really see traction, and we have improved our product to be able to work with them and support them.”