According to the World Health Organisation, climate change contributes to humanitarian emergencies, from heatwaves and wildfires to floods and tropical storms. In recent years, these events have become more frequent, more intense and increasingly severe. Research shows that 3.6 billion people already live in areas highly susceptible to climate change. Between 2030 and 2050, climate change is expected to cause approximately 250 000 additional deaths per year, from undernutrition and malaria to diarrhoea to heat stress.
For Laurette Coetzee, senior account manager at Esri South Africa, this reality could cause life insurers to rethink how they assess and price risk. If a person's exposure to the hazards mentioned above is increasingly influenced by where they live, work and spend time, there’s an opportunity for insurers to move beyond broad geographic risk categories. By combining geospatial data with climate projections, health trends and demographic information, insurers could build a much more granular picture of climate-related health risks. This image could potentially inform premiums, policy design and preventative interventions.
The harsh realities of climate change
The Lancet Countdown is an international, multidisciplinary research collaboration that independently tracks and monitors the evolving impacts of climate change on human health. The Countdown information sheet on health and climate change in South Africa shows that heatwave exposure among infants under one and adults over 65 increased by approximately 130% and 200%, respectively, between 2014 and 2023. Heat-related deaths among people over 65 increased by 173% during the same period.
Geospatial datasets can identify areas experiencing greater heat exposure. By overlaying this information with population density, age demographics, air quality and access to healthcare data, an insurer can better understand where climate-related health risks could become more concentrated.
Some insurers are already doing this, explains Coetzee. For example, Santam Group’s Climate Wise Report outlines the brand’s response to increasing climate and weather risks. Keen to better monitor and manage climate-related risks, Santam is geocoding its property book. By geocoding metrics including proximity to fire stations, flood lines and floodplains, the insurer can improve pricing and set appropriate excesses and exclusions.
“In this way, insurers can be proactive in determining what the impact is on life, and if there is an impact, they can start looking at managing premiums more strategically,” she says. This is also important because climate change means that historical claims data may no longer be the most reliable predictor of future risk. The fact that a property hasn't experienced a flood in the past doesn't mean it won't flood in the future because rainfall patterns are changing so much, she adds.
The goal here is not to simply say: "You live in a hot area, therefore your health premium should go up," cautions Coetzee. This would raise obvious questions about fairness, affordability and discrimination, particularly for people living in communities most exposed to climate change.
But this data can support preventative interventions and improve policy design. An insurer might identify particularly vulnerable groups, such as infants under one and adults over 65, and provide them with heat-related health alerts and preventive health services. Climate-aware insurance isn’t about finding reasons to charge certain customers more; it’s about using the right data to understand risk earlier and intervene before it becomes a claim.
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