Climate risk models, which are widely used in the insurance industry, can estimate the likelihood that fires or floods will affect a specific place in the US. So far, the models don’t typically make detailed projections for extreme heat. But cities, businesses and insurers need the financial risks to be outlined more clearly, and some believe a new market for heat insurance — driven in part by artificial intelligence and the need to cool data centers — is around the corner.
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How much does a heat wave cost? Insurers and CEOs want to know
“The health cost is but one of many,” said Tracy Watts, Mercer’s US leader for healthcare policy. “You’ve got increased workers’ compensation cost, disability issues, life insurance, absentee issues.”
