Swiss Re has identified extreme heat as a significant insurance threat in its latest annual report on emerging risks with the Zurich-based reinsurer noting that up to half a million people globally die from extreme heat effects each year. The death toll exceeds the combined impact of floods, earthquakes and hurricanes. Heat waves contributed to conditions that generated $78.5 billion in insured wildfire losses globally from 2015-2024, Swiss Re reported.

The Los Angeles wildfires this year could add up to $45 billion in insured losses, according to UCLA Anderson School of Business estimates. The insurance industry has historically underestimated heat-related costs because damages spread across multiple policy types rather than appearing as a single category. Construction firms face rising medical insurance and workers compensation claims when outdoor workers suffer heat injuries, plus potential liability for inadequate cooling breaks.

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