Huge climate and health risks require urgent action – and will also be a catalyst for innovation

When we think about climate change, we might not immediately think about our own health. But the challenges posed as our planet warms up are wide-ranging and will impact almost every aspect of our lives.

The quickening pace of environmental change – extreme weather events, prolonged droughts, melting glaciers, rising sea levels – is the most visible and devastating aspect of global warming. But the impact of rising temperatures is also taking a huge and often underreported toll on the world’s wellbeing. In fact, the World Health Organization has warned that climate change is now the single greatest threat to human health.

This rapidly evolving risk landscape – for both climate and health – is a major challenge for governments, businesses and NGOs that requires urgent action. At the same time, the issues it presents will create opportunities for innovation.

By rising to the systemic challenges of climate change and its knock-on impact on health, the insurance industry has an important role to play in protecting people from direct physical risks and their indirect consequences.

The climate risk – and the need to rethink business as usual

The impact of climate change is clear to see: heatwaves, forest fires, floods, and the increased likelihood of natural catastrophes around the globe. 

There is an imperative on all of us to act, with the United Nations (UN) warning it’s “now or never” if we want to limit global warming to 1.5°C in line with the Paris Agreement.

For companies, there isn’t really such a thing as “business as normal” anymore. Organisations are already coming under increasing pressure from governments, investors, customers and employees to embark on an aggressive journey towards net zero. Momentum is also building from within, as management teams grasp the need to transform their business models to keep risks under control.

The need to rethink our everyday practices is true for the insurance industry, with climate risks rising across all business lines.

The health risk – and the rising protection gap

It’s also important not to overlook the rising health risks of climate change. The Climate Impact Lab predicts that by 2100, if carbon emissions continue to rise unabated, climate change could cause more annual deaths than all global infectious diseases.

The WHO estimates that an additional 250,000 people will die each year between 2030 and 2050 from causes related to climate change, such as malnutrition, malaria, diarrhoea and heat stress. What's more, a recent study found that 58% of known human infectious diseases can be connected to climate change. People in low-income and disadvantaged countries and their communities are most at risk.  In fact, according to a recent Swiss Re Institute expertise publication, Climate Change Impact on Life & Health, of the mortality already attributed to climate change, deaths from climate change in the period 2000-2017 were reported as 130 per million in low-income countries, 75 per million in lower-middle countries and 92 per million in upper-middle countries. The highest income countries had a lower mortality rate – evidence of the unequal human cost of climate risk – but even 18 per million is not a cost that we should accept.

The UN’s Intergovernmental Panel on Climate Change recently reported that risks from climate-sensitive diseases transmitted through food, water and insects are expected to rise. Among them, dengue fever – a deadly mosquito-borne disease – will pose a greater risk with longer seasons and wider geographic distribution.

These warnings come as global healthcare systems continue to be under significant strain following the COVID-19 pandemic. Developing countries have suffered especially badly, because of lower health resilience in their populations, less robust health infrastructure and high levels of out-of-pocket spending on healthcare.

In emerging markets, 60% of respondents to a Swiss Re Institute survey said they are increasingly concerned with their health as a result of COVID-19.

When it comes to insurance, 40% of the respondents to the same survey said they are concerned about the adequacy of their existing coverage. The global health protection gap widened by 8.1% to USD 747 billion in 2020, according to a sigma report from the Swiss Re Institute.

When it comes to insurance, 40% of the respondents to the same survey said they are concerned about the adequacy of existing coverage. The global health protection gap stood at USD 737 billion in 2021, a sigma report published this year by the Swiss Re Institute shows.

The sustainability connection: working together to find solutions

When the United Nations published its influential Our Common Future report back in 1987, sustainable development was hardly top of the international agenda. Its call for a development path that “meets the needs of the present without compromising the ability of future generations to meet their own needs” is now the defining challenge of our time. In the 35 years since that report appeared, the pace of climate change has accelerated, and the need for urgent action is clear.

Affordable health insurance can play a central role in enhancing protection and reducing the financial risks associated with healthcare crises. At Swiss Re, we are working together with our partners and stakeholders to meet this need through our Group Sustainability Strategy.

We believe that only by engaging across business lines and with parties from every sector of society will we be able to work towards closing mortality and health protection gaps.

Digital technologies and partnerships are also key to providing affordable, accessible protection. By harnessing innovations we can simplify and automate processes as well as cut operating costs.

We are already doing this through developments such as our Magnum platform for life and health insurance. Another example is Smart Access, a solution that dovetails with our sustainability goals and widens access to mortality protection – even for those with more complicated medical histories – in a low-cost and simple manner.

We are also working with partners like Lancet Countdown – a research network of global experts – to mitigate the effects of climate change on health. One project we are collaborating on is estimating the health and economic impact of exposure to air pollution in urban areas of Chile.

A coordinated response

Addressing the health threat posed by climate change is an essential part of creating a sustainable future and we all need to pull together to overcome this immense challenge.

While some work is already under way, there is some way to go, and the insurance industry is an important part of the response.

By making life and health coverage more affordable and accessible, especially to communities who are poorly understood and weakly served by the industry, we can help make society more resilient.

Let’s keep working together to find innovative solutions that will help us better manage the increasing risks we face. That’s how we can meet the future with greater confidence.