Europe’s Heatwave Crisis Is Becoming an Insurance Risk as Excess Deaths Rise, Says S&P
Europe Heatwave: Rising excess deaths from Europe’s heatwaves are turning into a mounting risk for insurers, S&P warns.
Europe heatwaves are no longer just a public health concern — they're becoming a material risk for insurers, according to S&P.
Europe Heatwave: Europe’s increasingly intense heatwaves are emerging as a significant risk for the insurance industry, with rising temperatures contributing to excess mortality, worsening existing health conditions and increasing demand for medical treatment, according to a new analysis by S&P Global Ratings.
In its recent insurance brief, the rating agency said heatwaves are becoming one of Europe’s deadliest climate risks as the continent continues to warm at roughly twice the global average rate. The rating agency said the financial impact on European reinsurers is currently manageable and does not threaten ratings, but warned that the risk could become more significant over the medium to long term as extreme heat becomes more frequent and Europe’s population continues to age.
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Europe Heatwave: More Than 10,000 Excess Deaths Recorded During June Heatwave
The scale of the health impact was highlighted by mortality figures from the extreme heat experienced across Europe this summer.
S&P said 10,650 excess deaths were recorded during the week of June 22-28, with more than 9,000 of those deaths occurring among people aged 65 and above. Extreme temperatures can aggravate underlying conditions, including cardiovascular disease, while also increasing the risk of dehydration and other heat-related complications.
The impact was not limited to traditionally hot parts of Europe. S&P noted that even countries in Scandinavia, which generally experience cooler summers, were exposed to unusually high temperatures.
In some areas, “feels like” temperatures reached as high as 48°C, putting significant pressure on vulnerable populations.
Independent reporting on the June heatwave has also pointed to more than 10,500 excess deaths across 27 European countries during the period, underlining the scale of the event.
Europe Heatwave: An Ageing Europe Could Magnify the Insurance Impact
The demographic profile of Europe is making the heat-related mortality problem more serious.
According to S&P, the proportion of people aged 65 and over in the European Union increased from 16.4% in 2004 to 21.6% in 2024. Over the same period, the share of people aged 80 and above rose from 3.8% to 6.1%.
Older people are particularly vulnerable to extreme heat because they are more likely to have underlying health conditions and may have a reduced ability to regulate body temperature.
That creates a potentially important intersection between climate change and insurance risk: as temperatures rise, the number of people most vulnerable to heat-related illness and death is also increasing.
S&P therefore expects heat-related mortality to become increasingly relevant to life and health re/insurers.
Europe Heatwave: Heatwaves Are Not Just a Life Insurance Problem
The insurance impact extends well beyond claims triggered by deaths.
S&P said primary life and health insurers, along with reinsurers, could face higher claims and costs from deteriorating health conditions, increased hospitalisation and greater demand for medical services.
This means a prolonged heatwave could affect insurers through several channels at the same time.
Life insurers could see an increase in mortality claims, particularly among older policyholders.
Health insurers could face higher medical expenses as heat aggravates cardiovascular, respiratory and other chronic conditions, resulting in additional treatment and hospitalisation.
Long-term care insurers could also face pressure as vulnerable elderly populations require more healthcare and support.
For reinsurers, the challenge is particularly important because heatwaves can cover very large geographic areas and persist for days or even weeks, creating accumulation risk across multiple insurance portfolios.
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Europe Heatwave: Why Climate Risk Could Eventually Push Premiums Higher
One of the biggest implications for policyholders could be the effect on future pricing.
Insurance premiums are generally calculated using expectations about future claims and risks. If extreme heat produces a sustained increase in mortality, hospitalisation and healthcare costs, insurers may eventually need to incorporate those higher risks into pricing and underwriting.
S&P said deteriorating health conditions and the resulting increase in treatment and hospitalisations could weigh on reinsurers’ financial performance and, subsequently, increase premiums.
The effect, however, is unlikely to be uniform across insurance products.
Younger populations are generally less vulnerable to heat-related mortality, meaning the impact on products such as disability and term life insurance could be relatively limited. Health, long-term care and annuity businesses could face greater exposure.
Europe Heatwave: Heat Risk Could Also Create Accumulation Risk for Reinsurers
For insurers, an individual heat-related claim may not be unusual. The bigger concern is what happens when an extreme heat event affects millions of people simultaneously.
Unlike many individual health events, heatwaves can stretch across multiple countries and last for extended periods. That means insurers and reinsurers could face a large number of claims from the same underlying event.
This creates what the insurance industry calls accumulation risk — the possibility that one event produces losses across multiple policies, regions or lines of business.
Climate change could make this challenge more difficult if extreme heat events become more frequent, intense and geographically widespread.
Research published in Nature Medicine previously estimated that more than 61,000 heat-related deaths occurred across Europe between May 30 and September 4, 2022, with an estimated overall 62,862 heat-related deaths for the summer.
Europe Heatwave: Current Impact Does Not Threaten Insurer Ratings
Despite the growing risk, S&P is not currently forecasting a major deterioration in the credit quality of European reinsurers because of this summer’s heatwaves.
The rating agency estimates that the combination of excess mortality and worsening health conditions has affected European re/insurers’ financials, but not to a degree that would affect their current ratings.
That assessment could change, however, if extreme temperatures become a more persistent feature of European summers.
S&P said the rating implications could increase over the medium to long term as extreme summer temperatures become more frequent and intense and Europe’s population continues to age.
Europe Heatwave: The Insurance Industry Is Facing a New Climate Equation
Heatwaves have traditionally been viewed primarily as a public-health and climate issue. For insurers, however, the risk is becoming increasingly financial.
The same event can generate higher mortality, more hospital admissions, increased healthcare utilisation and potentially higher claims across several insurance segments. At the same time, insurers may also face climate-related claims from droughts and wildfires during the same period.
This makes extreme heat a broader risk-management challenge rather than a single-line insurance problem.
For insurers and reinsurers, the question is no longer simply how many people could die during an extreme heat event. It is increasingly about how climate-driven changes in mortality, healthcare costs and population demographics will affect insurance portfolios over the life of a policy.
As Europe’s population ages and heatwaves become more severe, that question is likely to become increasingly important for underwriting, pricing, reserving and reinsurance strategies.
