Building Economic Resilience to the Health Impacts of Climate Change 2025

The insurance sector, accounting for over 7% of global GDP ,72 plays a vital role in protecting people from the economic impact of ill health and subsequent financial hardship through health, life and casualty coverage. Yet climate change threatens to erode profitability. It’s forecasted that climate change will cause 0.75% excess mortality annually by 2050 under a moderate warming scenario.73 As climate-health risks escalate, insurers face rising medical, life and casualty claims, straining capital and pushing premiums higher. Insurers have a unique opportunity and responsibility to build resilience. By developing innovative products, building climate expertise and helping prevent climate-related illness, insurers can protect both communities and the bottom line. As enablers of resilience, insurers also play an important role in incentivizing other sectors to reduce their own risks.Insurance key takeaways BOX 11 With global insurance premiums totalling more than 7% of global GDP , the insurance sector plays a vital role in providing financial protection against climate-related public health risks for individuals, businesses and communities.74 While property insurers have so far been most affected by physical climate risks and mounting losses from extreme weather events, climate change now poses an existential risk across all insurance lines.75 Health, life and casualty insurance lines are particularly important for climate resilience. Coverage gaps persist, however, across both developing and developed markets. Unlike other focus sectors in this report, the workforce for the insurance sector is not disproportionately exposed to climate-health risks, so the following analysis focuses on consumer-level interventions.Insurance can lower individuals’ risk of health impacts and support other sectors. The primary role of the insurance sector is to pool resources and evenly distribute risk, thereby reducing the financial impact of losses. The insurance sector can, however, also support other sectors in mitigating their climate exposure by sharing data, quantifying risk and incentivizing action through tailored pricing of premiums. Without adaptive action across the economy, climate-driven health impacts are likely to erode insurer profitability and push coverage costs higher for consumers, further widening the protection gap in vulnerable markets. 6.1 The insurance sector Without adaptive action across the economy, climate- driven health impacts are likely to erode insurer profitability and push coverage costs higher for consumers. 35 Building Economic Resilience to the Health Impacts of Climate Change