Key facts
- Europe's heatwaves are expected to increase insurance claims related to heat-related deaths and health conditions.
- S&P warns that these events could impact the financial performance of life, health, and reinsurance companies.
- The combination of rising temperatures and an aging European population creates a significant risk for insurers.
- Older individuals are particularly vulnerable to heat stress, leading to higher mortality rates during heatwaves.
- Increased treatment and hospitalizations due to heat-related health issues may also affect insurers' financials.
- While current company ratings are unaffected, S&P notes that this could change in the medium to long term.
Europe's prolonged heatwaves are poised to affect insurers' earnings as claims related to heat-induced mortality and deteriorating health conditions are expected to rise, according to rating agency S&P. The rating agency highlighted that the combination of extreme summer temperatures and Europe's aging demographic creates a significant risk for life, health, and reinsurance companies. Older individuals are particularly vulnerable to heat stress, leading to a surge in life insurance claims and increased demand for medical services. S&P noted that approximately 9,000 of the excess deaths recorded during a recent heatwave were among those aged 65 and over, with rising heat exacerbating underlying health issues. Beyond direct mortality, the report indicated that worsening health conditions and subsequent increases in treatment and hospitalizations could also weigh on re/insurers' financial performance. While current company ratings have not yet been impacted, S&P stated that this could change in the medium to long term as heatwaves become more frequent and intense, and Europe's population continues to age. The agency indicated it would continue to monitor the effects on rated re/insurers.