TNFD for insurers:
nature-related disclosure

Why TNFD matters for insurers and reinsurers, the LEAP approach, the dependency-vs-impact distinction, and where to start without boiling the ocean.

Why TNFD applies to insurers (even though insurance isn't agriculture)

The Taskforce on Nature-related Financial Disclosures published its final recommendations in September 2023. The framing is straightforward: organisations have impacts on nature and dependencies on nature, both of which translate into financial risk. For insurers, the dependencies side bites first — agricultural underwriting depends on pollinator services and water cycles; property and infrastructure underwriting depends on coastal-protection ecosystems and freshwater regulation; investment portfolios depend on the biological productivity of resource sectors held as bonds and equities.

TNFD adoption is voluntary in most jurisdictions today, but two pressures are accelerating uptake: ISSB's signalled progression from IFRS S2 (climate) to nature-related standards, and supervisory letters from the Bank of England, EIOPA and the NGFS framing nature loss as systemic financial risk parallel to climate.

The LEAP approach

TNFD's LEAP approach gives insurers a structured starting point:

1. Locate — identify the firm's interface with nature: where (geographically) the underwriting and investment exposures sit, and what biomes/ecosystems they depend on or impact.
2. Evaluate — assess the dependencies and impacts: what nature-related goods and services does the firm rely on, and what pressures does the firm's portfolio place on nature?
3. Assess — measure the financial risks and opportunities arising from the dependencies and impacts.
4. Prepare — disclose, integrate into governance, and respond.

Where insurers usually start (and the trap to avoid)

Most insurers begin TNFD adoption by scoping an investment-portfolio impact assessment — Scope 3 financed emissions for nature, essentially. This is necessary but easily becomes a year-long data-collection exercise that produces a number but no decision-relevant insight.

The faster route to value: start with dependencies in underwriting. Three sub-portfolios where the dependency analysis lands within weeks rather than years:

• Agricultural and crop insurance — pollinator dependency, soil-quality dependency, water dependency. Already well-mapped in the agronomic literature; mapping insurer exposure to that literature is straightforward.
• Property and BI in coastal regions — coastal-protection ecosystem dependency (mangroves, reefs, salt marshes). Already mapped in the climate-adaptation literature; the insurance-exposure overlay is incremental.
• Specialty energy and resource lines — water-availability and biodiversity-license dependencies on the underwritten asset's operational continuity.

How TNFD joins ISSB, SFCR and ORSA

TNFD-aligned disclosures live alongside IFRS S2 climate disclosures in the same sustainability reporting stack. Substantive consistency matters: a TNFD-aligned dependency map that asserts material exposure to coastal-ecosystem loss must show up in the SFCR risk profile and the ORSA scenario set. The cross-domain transmission framework treats nature dependency as a peer of climate physical risk in the climate domain — same channel architecture, additional inputs.

The Abgalis approach

The Abgalis Engine's climate domain extends naturally to nature dependencies. The TNFD LEAP outputs become inputs to the same channel architecture used for climate scenarios, producing TNFD disclosure as a view onto the same model — not a separate workstream.