Insurers are looking to access the £3 billion potential of the UK’s biodiversity net gain (BNG) market with the launch of the first insurance product designed to support biodiversity uplift at the Highlands Rewilding Bunloit project in Scotland.

This product has been designed to help protect habitats impacted by biodiversity loss and ensures long-term ecological benefit. Unlike products focused on carbon credit capture, this product is the first of its kind designed around natural capital and offers landowners assurance that their land will retain its economic value, irrespective of its biodiversity progress.

MGA Dual, which has underwritten the product, explained it also enables landowners to access capital from investors that might otherwise be financially out of reach, enabling them to develop natural capital initiatives. It also provides confidence to purchasers of carbon and biodiversity units that those units are protected by a comprehensive insurance programme.

It is the first comprehensive cover brought to market since the 2021 Environment Act mandated that all new developments in England deliver a minimum 10% biodiversity net gain (BNG) compared to pre-development levels.

Simon White, underwriting director & lead underwriter, Environment Climate and Innovation,  DUAL UK, said: “This project highlights the growing demand from developers for insurance solutions that address their biodiversity and carbon obligations and liabilities. We are speaking to a number of corporate stakeholders who are increasingly engaging with nature markets, recognising both their urgency and potential. There’s a growing awareness that for sustainable development to progress, the biodiversity market must scale, and insurance has a key role to play in unlocking that growth. This project marks a significant step forward in enabling nature-positive development and investment.”

England’s BNG market is projected to reach nearly £3 billion by 2035. Since the BNG regulations came into effect, an estimated 7,500 planning applications have included BNG requirements, with around 2,000 new applications submitted each month.

DUAL’s policy offers coverage to the Highlands Rewilding Bunloit project to protect and restore its habitats. Additionally, Highlands Rewilding will sell biodiversity and carbon units during this period. DUAL’s insurance then backs those units by covering the cost of acquiring substitute units to meet the insured’s contractual obligations should it be necessary.

Simon McGinn, CEO, DUAL UK, added: “MGAs bring the deep expertise and innovation needed to support businesses facing complex or emerging risks, such as those involved in pioneering biodiversity and rewilding initiatives. At DUAL, our entrepreneurial approach allows us to create bespoke insurance solutions that not only unlock investment but also enable nature-positive development. This innovative product reflects our commitment to driving the growth of the UK’s nature markets and supporting sustainable progress through tailored risk management.”

In Scotland, the market framework for nature recovery is currently being finalised and is expected to require landowners with holdings over 1,000 hectares to demonstrate how they are enhancing biodiversity. Highlands Rewilding works with landowners to develop nature-positive and profitable land use strategies, enabling them to monetise natural assets by selling carbon and biodiversity credits to developers.

Jeremy Leggett, CEO, Highlands Rewilding, explained: “As well as monetising our own natural capital, Highlands Rewilding seeks a leadership role in helping to make natural capital a trustable investable asset class for our entire embryonic industry. We are confident that this first insurance policy will break new ground in helping us do that. The premiums we will pay on insurance will of course reduce the returns for our investors, but insurance will increase the real value of our offering by more than we pay out, in terms of the confidence it will bring to our buyers, the landowner partners with whom we share profits, and the local communities to whom we bring added prosperity in multiple ways.”