From scorching heatwaves to extreme floods to melting glaciers, signs of climate change are inescapable. Clearly, 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 Sixth Assessment Report issued on August 9, 2021, outlines five scenarios: They range from a very low greenhouse gas emissions scenario in which carbon dioxide emissions are cut to net zero by around 2050 and median temperatures increase by 1.5 degrees Celsius by the end of the century, to a very high emissions scenario. In that scenario, emissions levels essentially double by 2050 and the median global increase in temperature by the end of the century reaches a scorching 4.4C. Some effects could be manageable, others catastrophic.
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 great that it will take the combined insight, ingenuity, and attention of the entire insurance industry, and broader business community, to assess and respond to its implications. And as the climate changes, public and regulatory pressure will only increase.
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 risks 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.
- Read more: Insurance Challenges and Product Development Opportunities Amid Negative Health Impacts of Climate Change
Longer-term, environmental and ecosystem shifts can also destabilize whole societies. They can fuel population displacement, political instability and conflict and rising mental illness 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. 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. Consider air pollution, a well-established cause of cardiorespiratory disease and linked to many cancers. In the U.K., emissions of particulate matter in the air (PM2.5) have fallen to 20% of levels recorded in 1970. In other advanced industrialized countries, evidence of air quality gains was more mixed. 
Looking forward, modelling carried out by the U.S. Environmental Protection Agency suggests particulate matter will increase slightly in coming years (although with great variation across the nation). However, this modelling 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 shifts in temperature linked to heat stress, stroke, and cardio-respiratory disease. Research published in The Lancet Planetary Health suggests a modestly positive impact on net mortality towards the end of the century in the U.K., as increases in heat-related mortality are more than offset by reductions in cold-related mortality. There is a small positive impact on net mortality in the U.S. and a small negative impact in Canada, while populations in areas that are closer to the equator, such as Mexico and Spain, may see more notable mortality increases. 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 gradually emerging and involve vast cyclical shifts across complex systems. As the IPCC report states, many changes due to past and future greenhouse gas emissions may be irreversible for centuries to millennia. Past greenhouse gas emissions since 1750 have committed the global ocean to future warming. Mountain and polar glaciers will continue to melt for decades or centuries; and it is virtually certain that global mean sea level will continue to rise over the 21st century. But the more extreme greenhouse gas emission scenarios are not inevitable, and outcomes are still 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 is likely to be inadequate, because these may not include important second-order factors and unintended consequences of policy changes or population behaviors.
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 leverage stronger global collaboration and engagement with other stakeholders. The task force also seeks to provide a more holistic, industry-level perspective on climate risk assessment, and forward-looking scenario analysis on both sides of the balance sheet for property and casualty and life re/insurers . RGA is proud to be a member and to share our research approach. It relies on the latest scientific findings as well as actuarial analysis based on scenarios that fall within two broad risk categories: transition and physical.
The Geneva Association has formed the Task Force on Climate Change Risk Assessment to bring the industry together to leverage stronger global collaboration and engagement with other stakeholders.
Transition risks are related to the shift to a lower carbon economy involving insurers, their employees, suppliers, government policymakers and regulators, 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 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. These 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. In fact, 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. They are increasingly calling for greater study of the potential positive and negative mortality and morbidity effects of climate change and climate change policies. Research published in The Lancet Planetary Health, for example, has identified substantial health benefits that could be achieved if health considerations were factored into climate change policies. Investors, too, are more often 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 this work, play a unique role in shaping this conversation, and have 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)
 https://ourworldindata.org/outdoor-air-pollution shared under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/deed.en_US)