Insuring Against Extreme Heat Navigating Risks in a Warming World 2025

Conclusion As the world faces the growing consequences of extreme heat, the insurance industry, policy-makers and other key stakeholders are adopting strategies to mitigate its impacts and protect vulnerable communities and economies. The evidence is clear: extreme heat is reshaping the global risk landscape by creating new vulnerabilities and exacerbating existing ones. Its effects are not only immediate – resulting in loss of life and damage to infrastructure – but also far-reaching, with severe economic implications, particularly in regions with significant insurance protection gaps and limited resources for adaptation. Communities most vulnerable to climate disasters often face significant barriers to accessing insurance, limiting the reach and impact of even the most innovative insurance solutions. For these initiatives to succeed, they must be paired with effective distribution channels and fostered by strong community engagement to ensure widespread participation and impact. As daunting as the challenges are, today’s risk landscape presents opportunities for adaptation, resilience building and innovation. Governments, businesses, insurers and other key stakeholders can mitigate risks and protect vulnerable populations while investing in solutions to reduce long-term damage. For insurers and policy-makers, using innovative financial mechanisms and incorporating climate resilience into business and policy frameworks will be key strategies in addressing the multifaceted risks posed by extreme heat. Business leaders and governments can capitalize on emerging opportunities for a host of jobs, skills development and economic activity in furtherance of resilience and adaptation projects. Over the past two years, the World Economic Forum has convened workshops and published thought leadership with executives at the intersection of insurance and climate resilience alongside key stakeholders from government, philanthropy, multilateral institutions and regulators. The goal has been to identify challenges and map out insurance strategies that strengthen and sustain resilience to extreme heat. The Forum will continue to use its platform for public-private collaboration to stimulate this crucial dialogue and drive impact on this critical issue. While this report centres on the roles of the insurance industry and policy-makers in addressing extreme heat, this challenge demands a holistic all-of-society approach. Tackling extreme heat requires the involvement of wide range of stakeholders (including utilities providers, scientists, public health officials, infrastructure planners, media, mayors and local government, and leaders from highly-exposed sectors like real estate, agriculture, construction, and manufacturing) to develop community-based and sector-specific heat resilience strategies. Individuals and communities also play a critical role in risk reduction through actions such as adopting renewable energy, retrofitting homes for physical climate resilience and enhancing local preparedness. More time and attention should be devoted to educating individuals and communities on risk reduction and prevention measures. Both the impact of extreme heat and the tools to adapt to these risks are unevenly distributed, disproportionately affecting the poor, racial minorities and other vulnerable groups. Risk education and adaptation efforts must be approached through an equity-centered lens to ensure that those who need to build resilience the most are able to do so. Ultimately, these actions at the individual and community levels significantly impact the insurance landscape and are essential to mitigating this growing crisis. Given the urgent need for multistakeholder collaboration to enhance extreme heat resilience, the insights from this report will serve as the foundation for a cross-industry, research-driven initiative focused on this issue throughout 2025. The growing challenge of extreme heat coordinated proactive action. The cost of inaction – measured in human lives, economic losses and societal disruption – is simply too high. Decisions made today will shape how well the world endures and adapts to a fast-warming world in the future. Insuring Against Extreme Heat: Navigating Risks in a Warming World 24