Climate Risk7 min read

Heat Stress, Mortality and Health Financial Risk

By Jonas Adam Mohamed Osman, known as Yonas Osman

CEO of Quantica Risk

60 Rue François Ier, 75008 Paris, France

Published 15 October 2026

Rising extreme heat is a quantifiable mortality and morbidity driver for life and health insurers, requiring updated actuarial assumptions and pricing.

Executive answer

Extreme heat events are already a measurable driver of excess mortality and morbidity, particularly among elderly populations and those with pre-existing cardiovascular or respiratory conditions, and life and health insurers need to reflect this in mortality and morbidity assumptions rather than treating heat waves as isolated, non-recurring events. Historical mortality tables built on decades of relatively stable climate patterns increasingly understate near-term heat-related mortality risk in affected regions.

This matters directly for life insurance reserving, health insurance claims forecasting, and workers' compensation lines exposed to outdoor and physically demanding occupations, where heat stress raises both acute injury risk and longer-term chronic health burden from repeated exposure.

Actuarial assumption setting

Updating mortality assumptions for heat-related risk requires distinguishing between acute excess mortality during heat wave events and chronic morbidity effects that build gradually, since these have different implications for short-duration versus long-duration insurance products. Acute event mortality is more relevant to catastrophe-style modelling for short accumulation periods, while chronic effects matter more for long-term life and annuity reserving.

Actuaries should also account for adaptation effects, since populations and health systems do adjust to rising heat exposure over time through infrastructure, healthcare response and behavioural change, meaning naive extrapolation of recent heat wave mortality without any adaptation offset would likely overstate future risk. Calibrating the right adaptation assumption remains one of the harder judgment calls in this space.

Vulnerable population segmentation

Heat-related mortality and morbidity risk is highly uneven across age, pre-existing health conditions, occupation, and housing quality, including access to air conditioning, meaning portfolio-level assumptions should be segmented rather than applied uniformly. Insurers with concentrated exposure to older-age annuity books or health portfolios in regions with limited cooling infrastructure face materially higher heat-related claims risk than diversified books.

Occupational health and workers' compensation insurers need segment-specific data on outdoor and manual labor exposure, since heat stress injury rates in construction, agriculture and logistics sectors have risen measurably in regions experiencing more frequent extreme heat days, with direct implications for claims frequency and severity assumptions.

Public health data and model validation

Robust heat mortality modelling draws on public health surveillance data, often published by national health agencies and the World Health Organization, which track excess mortality during heat events and provide a growing evidence base for calibrating actuarial models. Insurers should validate internal assumptions against this external evidence periodically rather than relying solely on internal claims history, which may be too short or too localized to capture tail risk accurately.

Given the relative novelty of heat-adjusted actuarial modelling, transparency about assumption uncertainty is important in both internal risk reporting and external disclosure, since regulators and rating agencies are increasingly asking how insurers have adjusted mortality and morbidity tables for a changing climate.

Conclusion

Heat stress is one of the more directly quantifiable channels linking climate change to insurance liabilities, given the growing public health evidence base on heat-related mortality and morbidity. Insurers that update mortality and morbidity assumptions with appropriate segmentation and adaptation adjustments will price and reserve more accurately than those relying on unadjusted historical tables.

Yonas Osman, CEO of Quantica Risk, stresses that heat-related mortality assumptions should be segmented by vulnerable population group before any portfolio-level adjustment is applied, since uniform adjustments tend to mask where the real reserving risk sits.

Primary sources

heat stressmortalitylife insurancehealth risk