Climate Risk and the Future of Insurance

Overview

Climate change is no longer a distant concern for insurers: it is already reshaping mortality patterns, life expectancy, and long-term risk. Rising temperatures, more frequent extremes, and uneven adaptation across populations pose fundamental challenges to how life and health insurance products are priced, managed, and regulated.

This project, developed in collaboration between IE University and Vienna Insurance Group (VIG), translates cutting-edge climate and health research into tools that insurers can actually use. We study how temperature and other climate-related risk factors affect mortality across age groups, regions, and future climate scenarios, and we embed these effects directly into actuarial quantities such as death probabilities, life expectancy, and life tables.

The outcome is a new generation of climate-adjusted life tables that allow insurers to explore how different climate pathways may impact portfolios over time. By combining public data, scientific projections, and proprietary information, the project supports more informed decisions around pricing, capital requirements, and long-term risk management in a changing climate.

Methodologically, the project builds on exposure–response functions linking temperature to mortality, combined with high-resolution climate data and future climate scenarios (Shared Socioeconomic Pathways, SSPs). These relationships are propagated through an actuarial pipeline to produce climate-adjusted mortality rates and life tables by age, sex, and region. The framework integrates results from state-of-the-art epidemiological studies with demographic and actuarial modeling, enabling scenario-based projections of longevity and climate risk relevant for insurance portfolios.

To learn more about the project, visit the project website. We are organizing the 3rd edition of the Climate Change and Insurance conference series (CCI 26) at IE University’s campus in Segovia, from 2-4 September 2026.