From scorching heatwaves to extreme floods to melting glaciers, signs of climate change are inescapable – and these extreme weather events pose a particularly vexing problem for life insurers.
Accepting that climate change is occurring is one thing; predicting its human health consequences can be quite another. While property and casualty carriers are adept at pricing catastrophic scenarios in the short term, life insurers face unique obstacles in accurately modeling the morbidity and mortality risks of a warming world over much longer time horizons.
In fact, evaluating climate risks to human health and longevity can resemble a game of three-dimensional chess: every potential move can introduce a dizzying array of new environmental, economic, and geopolitical variables. On the environmental side alone, the range of possible outcomes of climate change is vast. The Intergovernmental Panel on Climate Change report issued on August 9, 2021 outlines five potential scenarios, ranging from a best case in which carbon dioxide emissions are cut to net zero by around 2050 and temperatures increase by 1.5 degrees Celsius to a worst case in which emissions levels essentially double by 2050 and the average global temperature reaches a scorching 4.4C. The associated impacts of these scenarios range from bad but manageable for the first to catastrophic for the second. 
It is a game with the very highest stakes; no single player can win and all companies have a role. RGA continues to monitor emerging experience, evaluate scenarios, and actively identify factors that may influence the economic and physical health of populations decades into the future. Still, the scale of climate change is so large that it will take the combined insight, ingenuity, and attention of the entire insurance industry, and broader business community, to master its implications. And as the climate changes, public and regulatory pressure will only increase on carriers to help guide policymakers toward solutions.
Climate Change and Human Health
When it comes to grasping the human health impacts of rising sea levels or erratic and more intense storm patterns, life insurers would do well to start small. RGA is already researching the ways climate change affects all of us at a cellular level. Of course, extreme temperatures and more severe and frequent natural disasters such as forest fires, floods, and hurricanes directly threaten human health through immediate risk of physical injury and death. But longer-term environmental and ecosystem changes also introduce less visible stressors that can produce potential macromolecular damage, or damage to proteins, DNA, RNA, and lipids. Heat shocks and environmental conditions that are too salty, acidic, or basic can hamper cell function, and even lead to forms of cellular death.
Longer-term environmental and ecosystem shifts can also destabilize whole societies, fueling population displacement, political instability and conflict, rising mental illness, and increased incidence of violence as individuals and communities struggle for scarce resources and seek to mitigate infrastructure damage and the spread of infectious disease.
To truly evaluate these forces, insurers must first understand them, and the devil is in the demographic detail. Although climate change is global, climate risks are not equally distributed around the world. There is remarkable variability in risk by geography, socioeconomic status, and both within and among demographic groups over different time periods. Only consider air pollution, a well-established cause of cardiorespiratory disease and linked to many cancers. RGA found that mortality levels in the U.K. linked to emissions of particulate matter in the air (PM2.5) and ozone have fallen to 20% of levels recorded in 1970. In other advanced industrialized countries, evidence of air quality gains was more mixed. In the U.S., scientists expect particulate matter to increase slightly in coming years (although with great variation across the nation). In addition, air pollution research doesn’t account for highly polluting wildfires, which may further increase pollution levels linked to incidence of non-communicable disease in the U.S. population; this is an area where further research is needed. Similarly, in emerging economies with fewer environmental controls, such as India, China (in some scenarios), and areas of Africa, pollution-linked mortality is expected to rise more dramatically.
Similarly, non-temperate regions are more vulnerable to rapid shifts in temperature linked to heat stress, stroke, and cardio-respiratory disease. Toward the end of the century, RGA’s research suggests a modestly negative impact on net mortality in the U.S. and Canada, and no effect in Northern Europe, while in geographies that are closer to the equator, such as Mexico and Spain, may see more notable mortality increases. Such findings are supported by publicly available studies. Recent research published in the The Lancet definitively links above- and below-optimal temperatures to annual increases in mortality and finds 9% of global deaths could be attributed to extreme cold and hot temperatures.
The elderly are especially vulnerable. The increased global surface temperature primarily affects the health of people over age 65 and those with comorbidities. In 2018, public records reveal approximately 300,000 heat-related deaths across the globe and a 50% increase in mortality linked to temperature among people over age 65, driven primarily by increases in northern India, China, Japan, Russia, and Central Europe.
When it comes to grasping the human health impacts of rising sea levels or erratic and more intense storm patterns, life insurers would do well to start small.
City dwellers are also at greater risk. Global population growth and increased urbanization are compounding factors. In 1807, the global population reached about one billion; today more than seven times that number walk the earth, and by 2050, most will be living in urban centers, which are responsible for 70% of all carbon dioxide emissions. City living is contributing to water and air pollution and the loss of biodiversity, as densely packed settlements overtake nature. In fact, a recent United Nations report on biodiversity found that within decades, one million species of plants and animals will become extinct due to overfishing, deforestation, and habitat loss. As humans encroach on animal habitats, the chances for animal vectors to transmit zoonotic disease increases. Also, transmission of cholera, malaria, and dengue fever are increasing due to longer summers and contamination of water and food sources. It is estimated that by 2030, malaria may cost an additional 60,000 lives, primarily in sub-Saharan Africa where climactic shifts are more intense.
Modeling Mortality and MorbidityAsked to define global warming, famed Columbia University climate scientist Wally Broecker once said simply, “The climate system is an angry beast, and we are poking it with sticks.” And this beast has only begun to make noise. The long-term signs of climate change are only gradually emerging and involve vast cyclical shifts across complex systems. More extreme scenarios are not inevitable, and outcomes are still largely dependent on public action or inaction and a wide range of risk mitigation approaches. This makes modeling health impacts particularly daunting.
Life and health insurers and reinsurers must first evaluate the variety of risks that could be exposed over extended and uncertain time horizons. Simply looking at a single scenario based on a static set of actuarial assumptions that may neglect important second-order factors and unintended consequences of policy changes or population behaviors. RGA advocates for examining a range of scenarios, influenced by an ever-evolving set of assumptions, to address the sprawling and uncertain problem of climate change. Climate models evaluate energy and ecosystem-level shifts and their consequences. Other models may look at political and socioeconomic pathways. Life and health insurers can offer a different analysis of the ways mortality has varied in the past relative to changes in temperature and other climatic factors, and then, by establishing these relationships, insurers can model the future in ways that add another dimension to the conversation.
By examining many different scenarios, insurers and regulators stand a better chance at identifying plausible future pathways and promoting increased awareness of climate risks. The Geneva Association has formed the Task Force on Climate Change Risk Assessment to bring the industry together to explore long-term effects on health and longevity. RGA is proud to be a member and to share our research approach, which relies on the latest scientific findings as well as actuarial analysis based on scenarios that fall within two broad risk categories: transition and physical.
Transition risks are related to the shift to a lower carbon economy involving insurers, their employees, suppliers, and investors. These could include rising operating costs, business model shifts, regulatory risks, public policy changes that might expose a company to litigation, or changes in public attitudes that may involve reputational risks. New technologies used to address emission reductions could disrupt existing systems or change the supply and demand dynamics.
Physical risks – either acute or chronic – are more direct. Acute physical risks relate to the severity and frequency of extreme weather events such as storms, floods, and wildfires and their impacts to human health and welfare. Chronic risks involve the implications of longer-term shifts in climate patterns, such as rising average temperatures, and secondary factors, such as growing air pollution and incidence of vector-borne diseases. Such physical risks are expected to have a relatively modest impact on mortality in the U.S., Canada, and the U.K. in the short term, although impacts to other more vulnerable countries may be higher and merit further research. The longer-term consequences for inaction are sobering for all of humanity.
Where Do We Go from Here?
The linkages between human welfare and the health of the planet have never been clearer. The COVID-19 pandemic taught the world that global decarbonization is possible as emissions tumbled 6.4% worldwide in the first half of 2020. It also revealed concrete steps communities could take for the climate, such as the use of technology to replace the need for carbon-emitting commutes. And it reminded us of the importance of nature in supporting our health and well-being as lockdowns led many communities to invest in public parks and bicycle lanes.
The long-term effects of these lessons have yet to be determined, but it is clear that the way we live and work has been forever altered, hopefully in ways that could benefit both human health and the environment.
Global non-governmental organizations, academic institutions and regulatory bodies have taken note and are increasingly calling for greater study of the mortality and morbidity effects of climate change. The Lancet Planetary Health, for example, appealed for health considerations to be factored into climate change policies. Investors, too, are increasingly considering non-financial factors related to climate change’s impact on human health when evaluating corporate material risks and growth opportunities.
Climate change represents a dire risk. Working to mitigate it and to achieve significant improvement requires collaboration and knowledge-sharing among businesses, policymakers, and the public. Life insurers, by the very nature of our work and capabilities in modeling future scenarios, have a unique role in shaping this conversation, and a chance to protect the health of both people and the planet we share.
 IPCC 2021: Climate Change 2021: Synthesis Report
 https://assets.bbhub.io/company/sites/60/2020/10/FINAL-2017-TCFD-Report-11052018.pdf and https://www.genevaassociation.org/sites/default/files/research-topics-document-type/pdf_public/climate_risk_web_final_250221.pdf
 2020 Lancet countdown
 WHO 2017; Health Effects Institute. 2018. State of Global Air 2018. Boston MA.; Gulland, A. (2019, April 3). Revealed: Toxic air lowers life expectancy by 20 months. Retrieved from https://www.telegraph.co.uk/news/0/toxic-air-lowers-life-expectancy-20-months
 https://ourworldindata.org/outdoor-air-pollution shared under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/deed.en_US)
 Source: https://ourworldindata.org/outdoor-air-pollution shared under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/deed.en_US)