New Report on Climate Implications for Health / Life Insurers

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A new report released today from the Geneva Association (GA) and the global foundation Wellcome provides a framework for health and life insurers to evaluate and manage risks associated with climate change. The report "Climate Change: What does the future hold for life & health insurance?" offers perspectives from various health & life insurance experts, and finds that while impacts for the life/health segments have so far been less significant than in P&C, they are likely to increase based on climate trends and projections.

“We cannot talk about the effects of climate change without talking about the major harm to human beings – to people’s physical and mental health" said Jad Ariss, Managing Director of The Geneva Association. "Extreme weather events cause severe damage to homes and buildings, but they also cause injury and death. Changes in climate conditions reduce biodiversity, impact food supplies and spread and exacerbate disease. The climate crisis itself has become a mental health issue. Working to better understand and reduce these risks will help keep them insurable.”

The authors point out that fossil fuel burning not only drives climate change, but also air pollution that is linked to increased risk of various health problems. Furthermore, research increasingly points to acute risks related to climate impacts, for example respiratory issues from wildfire and strokes associated with extreme heat events - and chronic risks such as those related to climate driven changes in insect born and other disease vectors.

“The effects of climate change are evident when it comes to mortality. But our report shows the increasing risk it also poses to morbidity. As more of us are faced with a 100-year life, we are challenged to comprehend the scale of health risks we face from an erratic and extreme climate. Building and preserving insurability will require strong collaboration among insurers, across lines of business, and with the wider research and policy community” said Adrita Bhattacharya-Craven, Director Health & Demography at The Geneva Association and lead author of the report.

The report encourages insurers to address data-gaps that limit life/health segment responses to these issues, incentivise policyholder behaviours that contribute to both climate mitigation/adaptation and public health outcomes, and consider product solutions such as the potential for scaling parametric insurance.

The insurance sector is uniquely positioned to help prevent and manage climate-related risks" said Madeleine Thomson, Head of Climate Impacts and Adaptation at Wellcome. "We need more research on the health impacts of climate change so that health and life insurers can develop products to help manage these risks, particularly where it can support the expansion of insurance cover to disadvantaged populations in countries most vulnerable to climate risk. We’re beginning to see this emerge with the deployment of parametric insurance products, for example, to protect women working in India’s informal sector from heat-related illness. More innovative insurance products like these will be an essential part of supporting health in a changing climate.”

The report is the latest in a growing call for the Life/Health segment to take stronger action on sustainability issues. Last year, the UN Environment Programme’s Principles for Sustainable Insurance Initiative (PSI) Life & Health Working Group—comprising 10 leading insurers and reinsurers from Africa, Asia, Europe and North America— issued a report titled “Health is our greatest wealth: How life & health insurers can drive better health outcomes and address the protection gap” which addressed climate change alongside broader ESG factors like biodiversity loss and natural resource issues, social inequality, the cost of living, etc.

Whereas the P&C industry has begun to coalesce around best-practices, Life/Health insurers have an opportunity to set the agenda as "first movers" and multi-line insurers have the opportunity to transfer knowledge and experience from their P&C sustainability strategy to accelerate their Life/Health response.

Source: the Geneva Association,