Forecasting Mortality in a Warming World: An Actuarial Lens on Climate and Insurance

Estimated Reading Time: 5 minutes

The weather is no longer background noise, it is rewriting mortality and morbidity trends, forcing actuaries to rethink how life and health insurance is designed and priced. Floods, heatwaves, droughts, and storms are not only humanitarian crises or macroeconomic shocks; they leave measurable fingerprints on claims ratios, underwriting assumptions, and solvency margins. For a profession built on quantifying uncertainty, climate change represents both disruption and opportunity. The disruption comes from breaking the long-held assumption that the past can reliably guide the future. The opportunity lies in building new frameworks that can translate physical hazards into actuarial metrics and guide insurers through uncertain terrain.

Have you signed up to our weekly job alerts on Actuary List? We post 50 new handpicked jobs every week that match your expertise. To ensure you don’t miss out, sign up here. Here are a few examples of new jobs this week:

Climate Risk Through the Actuarial Control Cycle

The actuarial control cycle offers a natural scaffolding for climate risk analysis. Its steps problem definition, measurement, mitigation, and feedback, mirror the way insurers must confront climate-linked mortality and morbidity.

Defining the problem begins with asking: How do heatwaves, declining air quality, and erratic precipitation patterns translate into health outcomes? The answers are not abstract; they appear in excess mortality during extreme heat events, surges in respiratory claims from wildfire smoke, and spikes in mental health claims after repeated flooding.

Measurement demands tools beyond traditional mortality tables and morbidity datasets. Climate change undermines the principle of stationarity, where the past was a guide to the future. Actuaries now need epidemiological models, climate projections, and scenario analysis. For example, projections of extreme heat days can be mapped to observed mortality and morbidity risks and then translated into shifts in claim costs across funeral, life, health, and disability portfolios.

Mitigation and management involve adapting product design, pricing, reinsurance, and capital frameworks. Climate impacts manifest as both acute shocks (a week-long heatwave doubling funeral claims) and chronic drags (gradually rising respiratory illness prevalence). Insurers must build resilience against both.

The feedback loop is essential. Did a record summer generate more claims than modeled? Did hospitalizations in vulnerable populations exceed scenario expectations? Continuous monitoring ensures assumptions evolve with emerging evidence and keeps models responsive to a non-stationary climate.

Translating Hazards into Insurance Outcomes

The key question for insurers is translation: how do environmental hazards become insurance events?

Heat is a prime example. Mortality rises sharply above critical temperature thresholds, particularly among the elderly and those with cardiovascular disease. Health insurers simultaneously see surges in emergency admissions, especially in poorly ventilated, low-income urban areas.

Air quality deterioration from wildfires produces cumulative respiratory and cardiovascular effects, leading to long-term morbidity shifts. Similarly, floods create indirect health burdens through disrupted chronic care, infectious outbreaks, and profound mental health stress.

These examples illustrate why a robust framework must account for multiple, compounding risk pathways rather than isolated hazard-to-claim links.

From Climate Scenarios to Financial Impacts

A structured approach begins with climate scenarios, often grounded in IPCC projections. These scenarios feed into vulnerability assessments (age, socioeconomic status, access to healthcare), which are then mapped onto insurers’ portfolio exposures. The result is financial translation: altered mortality tables, shifted morbidity assumptions, claims inflation estimates, and revised capital requirements.

The practical challenge is data. Climate projections are uncertain at regional levels, health impacts involve complex interactions, and societal adaptation is unpredictable. Nonetheless, integrating climate science with actuarial modeling produces clearer stress-tests and strategic insights.

Illustrative Case: Funeral Claims in a Warming World

Consider a funeral insurance portfolio of 100,000 policyholders, average age 50. Baseline claims are around 700 per year. Epidemiological evidence suggests that under 1.5°C warming, heat-related mortality could rise by 0.02% of exposed populations annually, equating to 15 additional deaths, a 2% uplift. At 2°C, the uplift grows to 25 additional deaths, around 3.5%. In extreme summers with compounding air quality deterioration, the impact could double.

Older policyholders drive the increase: for those aged 70+, excess deaths could spike 10% above baseline during severe summers. Even modest shifts like these, when accumulated across portfolios, alter profitability, solvency margins, and pricing adequacy.

Conclusion: Tomorrow’s Claims Are Already in Today’s Weather

Climate change is not a distant scenario; it is already reshaping the mortality and morbidity curves that underlie insurance business models. The actuarial toolkit, control cycles, scenario analysis, risk quantification, and disciplined feedback remain relevant, but it must be adapted to a future where compound risks dominate, and historical averages lose predictive power.

For insurers, the weather is no longer background context. It is a driver of claims. And for actuaries, the task is clear: forecast mortality in a warming world with the same rigor once reserved for finance, because the next claim is already forming in the climate system.