S&P Warns European Insurers of Growing Claims Risk from Heatwaves and Aging Population

Europe’s intense heatwaves are putting pressure on insurers’ earnings as claims linked to heat-related deaths and worsening health conditions surge, rating agency S&P has warned.

The prolonged period of extreme temperatures is driving an increase in drought and wildfire-related claims. S&P also highlighted fallout for life and health insurers, as well as reinsurers that provide protection to insurance companies.

These rising payouts are likely to translate into higher premiums for customers as insurers seek to offset the additional costs.

Europe’s heatwaves, combined with an ageing population, have created a “perfect storm.” Older people bear a disproportionate share of the health impacts of high temperatures, leading to a surge in life‑insurance claims for heat‑related deaths and greater demand for private medical services. These challenges arise at a time when many original contracts have not yet accounted for the escalating temperatures.

Demographic data underscores the trend: between 2004 and 2024, the share of people aged 65 and over in the EU rose from 16.4% to 21.6%, while the proportion of those aged 80 and over increased from 3.8% to 6.1%. “The increasing share of elderly people – who are particularly vulnerable to heat stress – suggests that heat‑related mortality in Europe is likely to rise,” the S&P report noted.

During the 22‑28 June heatwave, roughly 9,000 of the 10,650 excess deaths recorded were among those aged 65 and over, as high temperatures exacerbated conditions such as heart disease and dehydration.

“Beyond heat‑related deaths, deteriorating health conditions and the resulting rise in treatment and hospitalisations could weigh on re/insurers’ financials and, in turn, drive up premiums,” the report added.

A recent study in The Lancet Planetary Health found that adults aged 60 and over face dangers from heat at much lower temperatures than previously recognised. Older adults sweat less, their hearts work harder in the heat, and their blood vessels are less able to dilate, limiting their ability to stay cool.

In the United Kingdom alone, a four‑day heatwave in May and an eight‑day heatwave in June together caused 2,877 excess deaths, compared with 1,504 recorded during the summer of 2025.

Recent temperatures have continued to break records, with mercury exceeding 40 °C across several European nations, including Slovakia, Austria and Hungary earlier this month. Because heatwaves can affect large regions for weeks, they may compound financial risks for insurers.

While current heat conditions have not yet impacted company ratings, S&P warned that this could change over the medium to long term as extreme summer temperatures become more frequent and intense, and Europe’s population continues to age.

“We will continue to monitor their impact on the performance of rated re/insurers,” the agency added.

Source link