The Unlikely Quest to Bring Wildcats Back to Britain

(Bloomberg Businessweek) -- Scientist Paul O’Donoghue and a group of conservationists are working on a plan to reintroduce the lynx, a spotted wildcat with paws like snowshoes, into Britain. They say the program could restore a once-native species and might bring a balance back to the landscape, helping to trim an overpopulation of deer. Local sheep farmers, though, worry about their livestock becoming prey.

That’s where insurance comes in. A syndicate of underwriters, working through Lloyd’s of London, is offering financial protection to the farmers so they’ll be compensated for lost sheep. “It shows that we were not just paying lip service to stakeholders, we were actually thinking of solutions to engage with them,” says O’Donoghue, who is chief scientific adviser to the Lynx UK Trust.

For years, communities that have reintroduced wild species, such as snow leopards in Asia, have used insurance and compensation schemes that were often organized by residents, local governments, or nonprofits. “It has been proven to be an effective method of improving people’s attitudes to living alongside these species,” says Nilanga Jayasinghe, the World Wildlife Fund’s senior program officer for Asian species. She adds that there's no perfect solution that eliminates all conflict between wild animals and people who live near them.

The lynx project stands out for its use of a policy from an established industry player. It came about after stories about the lynx program caught the eye of Richard Bryant, a senior underwriter at Ark Syndicate Management Ltd. The company manages policies backed by members of Lloyd’s, which is a kind of marketplace for insurance.

Bryant is always on the hunt for interesting programs for Ark to insure, and he remembered learning as a child about the dwindling of the wolf population in the U.S. “I just think somehow we’ve got to get the balance slightly better—not putting people’s lives at risk but certainly having more protected areas,” he says. He did some math, calculating the probability of lynx taking out a sheep and weighing that against the price tag for each one. He figured it wouldn’t be too expensive for an established insurer such as Ark, which writes far larger policies in the energy industry.

Farmers remain skeptical. The National Sheep Association in the U.K. says there’s no guarantee insurance would cover the cost of ewes that die from the stress created by having a new predator. The group also says that U.K. farming is much more enclosed than areas in Europe where the lynx currently roam, making it easier for a lynx to trap a sheep in an area where it can’t escape.

It could be a while before a policy is put to the test: The proposal to introduce lynx to the Kielder Forest in Northumberland was rejected by U.K. Environment Secretary Michael Gove late last year, but the Lynx UK Trust isn’t giving up on its efforts. O’Donoghue says it will keep working to address concerns from the government, farmers, and others. Could other insurers start underwriting wildlife programs? That’s difficult to tell, Bryant says. The policies might be too small to get on some insurers’ radar, and there’s not much historical data about risk for companies to rely on for pricing policies. Bryant is pushing on, underwriting a program for lions in Africa.

To contact the editor responsible for this story: Pat Regnier at pregnier3@bloomberg.net

©2019 Bloomberg L.P.

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