Europe’s heatwaves threaten insurers’ earnings, rating agency S&P says
Rise in claims linked to heat-related deaths and illness, especially among older people, could drive up premiums Europe’s intense heatwaves could hit insurers’ earnings as companies face a rise in claims linked to heat-related deaths and worsening health conditions, the rating agency S&P has said. While a long summer of extreme heat will have increased drought and wildfire-related claims, the…
Heatwaves in Europe are posing a threat to insurers' earnings, according to rating agency S&P. The extreme heat is leading to a surge in claims related to heat-related deaths and worsening health conditions, particularly among older individuals. As the number of people aged 65 and over in the EU has risen from 16.4% in 2004 to 21.6% in 2024, and the proportion of those aged 80 and over increased from 3.8% to 6.1%, the vulnerability of older people to heat stress has become a significant concern.
During the recent heatwave from June 22-28, about 9,000 of the 10,650 excess deaths were among those aged 65 and above, as the heat exacerbated underlying health issues like heart disease and dehydration. Beyond these direct mortality impacts, the deteriorating health conditions linked to prolonged exposure to high temperatures may also weigh on the financial performance of re/insurance companies, potentially leading to higher premiums for customers.
While the immediate effects of the heatwaves have not yet impacted company ratings, S&P warns that as Europe's population continues to age and extreme summer temperatures become more frequent and intense, the financial risks for insurers could compound over time.
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