1 Earlier in 2024, the planet reached a concerning milestone: each of the last 10 years has ranked as the hottest on record. For the first time, the planet’s average temperature over a 12-month period rose 1.5ºC above pre-industrial levels, currently at 1.62ºC and surpassing the limits set by the Paris Climate Accords. As stated by the UN Secretary- General António Guterres, these prolonged periods of extreme temperatures and increasingly frequent and severe heatwaves are moving the world into an “era of global boiling”. Among the many climate risks impacting the world, extreme heat may have the greatest potential to threaten human health, physical infrastructure and economic activity. It has a uniquely far-reaching impact, affecting mental health, educational outcomes, worker productivity, transport networks, utility infrastructure, human migration and political instability.1 More than perhaps any other stakeholder group, the insurance industry stands at the forefront of an evolving extreme heat risk landscape. This industry works across various sectors – life, health, property and agriculture – all of which face significant exposure to extreme heat through property damage, crop loss, infrastructure degradation, and significant increases in mortality and morbidity. Additionally, insurers are among the largest asset owners in the economy, and the investment risks tied to extreme heat present severe challenges for the industry moving forward. The Forum’s Business on the Edge: Building Industry Resilience to Climate Hazards report states that extreme heat causes 72–73% of potential fixed asset losses across industries over the next decade. The business case for investing in climate resilience and adaptation has never been clearer – each dollar invested in climate resilience yields $13 in savings.2 Despite this compelling business case, 88% of climate disaster financing is still allocated towards post-event response rather than pre-event capacity building. This fast-evolving risk landscape demands a generation-defining commitment from the insurance industry to address extreme heat. Insurers can and should play a critical role in addressing extreme heat through their core products and services, playing a leading role in developing sector-specific and localized resilience strategies, and derisking investment and mobilizing capital into high-impact resilience and adaptation interventions. Growing extreme heat impacts Between May 2023 and May 2024, 6.3 billion people (roughly four-fifths of the world’s population) experienced at least one month of abnormally high temperatures.3 Those living in prolonged periods of extreme heat are struggling to adapt – poll workers in India, street sweepers in Spain, farm workers in the US and over 1,000 worshippers undertaking the Hajj pilgrimage have all died from extreme heat this year.4 An estimated 489,000 people die annually from extreme heat, making it the deadliest climate risk – killing more people than floods, hurricanes and earthquakes combined.5,6 Mass human migration fuelled by extreme heat is already taking place, and the accumulating hazards of climate change could drive food and water shortages, which, in turn, foment political and civil unrest.7 By 2050, nearly half of the world’s population is expected to live through dangerous heat levels for at least one month of the year.8 The long-term impacts of rising temperatures on the global financial system will likely be profound. By 2050, extreme heat and related climate risks could reduce the world economy by $23 trillion,9 with significantly higher losses in the Global South, where nations have fewer resources to adapt their infrastructure and economics. The impacts are even more profound in highly exposed sectors such as agriculture, construction, transport and shipping. In the US alone by 2050, heat-fuelled labour productivity loss is projected to reduce total economic output in construction by 3.5% ($119 billion per year), manufacturing by 1.7% ($90 billion per year) and agriculture by 3.8% ($13.07 billion per year).10Extreme heat risk landscape and the age of global boiling Extreme heat is a severe climate threat, causing immediate health harm and long-term strain on infrastructure and the economy. An estimated 489,000 people die annually from extreme heat, making it the deadliest climate risk – killing more people than floods, hurricanes and earthquakes combined. Insuring Against Extreme Heat: Navigating Risks in a Warming World 5

Insuring Against Extreme Heat Navigating Risks in a Warming World 2025