The Geneva Association, which investigates key risk areas that can potentially impact the insurance industry, and charitable foundation Wellcome have released a comprehensive report examining climate change and the risks it poses to life and health insurers – a subject that is less well understood compared to the corresponding exposure in the property and casualty sector.
“Climate Change: What does the future hold for health and life insurance?” is 47 pages long, with sections on the impact of climate change on health and on insurance products, as well as on how future availability, structure, and pricing might be affected.
P&C insurers have been grappling with an uptick in claims due to damage inflicted by climate-induced events. However, as highlighted by the report, the impact of climate change is also encroaching upon human health through acute and chronic risks alike – from respiratory ailments triggered by wildfires to the increased risk of illness due to disease-carrying insects.
The report emphasizes that while health and life insurers have yet to face significant impacts from these risks, the projection is towards a future where such effects will intensify, necessitating innovative approaches to insurance. Recommendations include a focus on prioritising preventive measures and the adoption of parametric insurance models.
Jad Ariss, managing director of The Geneva Association, underscored the importance of addressing the human element of climate change, noting: “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.” Ariss pointed out the multifaceted nature of climate impacts, shining a light on the need to mitigate the risks to keep them insurable.
Similarly, Adrita Bhattacharya-Craven, the report’s lead author and The Geneva Association’s director of health and demography, highlighted the growing challenges posed by climate change to both mortality and morbidity. She stressed how important it is for the insurance industry to collaborate broadly to effectively address the health risks associated with climate change.
Wellcome’s head of climate impacts and adaptation Madeleine Thomson also commented on the report, citing the unique position of the insurance sector in addressing the matter. Thomson advocated for more research into the health impacts of climate change, to enable the development of appropriate insurance products, particularly for vulnerable populations in high-risk countries.
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