How are actuaries assessing climate-related mortality and morbidity risks today, what are the main challenges to their modelling, and what support do practitioners say would help accelerate progress? To help answer these questions, in this blog we provide the key findings from a survey of UK actuaries on modelling climate-related risks. We’re also presenting the findings at an IFoA sessional meeting on 15 June. Find links to the full report and sessional meeting at the end of this blog.
Climate change is increasingly recognised as one of the most significant systemic risks facing society, with wide-ranging implications for population health, economies, and financial markets. For actuaries working within the life, health, and pensions sectors, the intersection between climate change and human health outcomes represents a frontier of risk assessment and modelling.
Climate perils including extreme heat, air pollution, flooding, and the spread of infectious diseases are expected to exacerbate mortality and morbidity risks, particularly across vulnerable populations.
While the broader health impacts of climate change are well-documented in public health literature, the application of these insights in actuarial models remains limited. Data limitations, methodological uncertainty, and a lack of scenario-based modelling frameworks tailored to the needs of actuaries have contributed to a lag in the integration of climate health risks into actuarial practice.
To investigate these issues, the IFoA’s Demographics – Mortality and Morbidity Working Party in the sustainability practice area conducted a survey among UK pension consultancies, insurers and reinsurers. The working party thanks the 26 respondents who contributed. While not statistically representative, it offers an indicative snapshot of current actuarial practice.
The primary aim of the survey was to understand how climate perils are currently being modelled in relation to mortality and morbidity, and to identify areas where further support and guidance are needed. To this end there were 5 key areas of investigation, each covered in turn below. The figures presented below focus on mortality, where actuarial practice is most developed. Morbidity findings are noted in the text where they materially differ.
We first asked respondents to identify the climate-related factors that, firstly, would influence the severity and, secondly, which they considered most likely to significantly affect UK population mortality.
Respondents identified several climate change related perils as potentially having a major impact on mortality, with temperature volatility, increases in infectious diseases, and changes to diet/lifestyle standing out.
Most respondents expect a realisation of a substantial deterioration in life expectancy due to climate change to emerge over time. Of those that responded, the largest share, 46%, anticipate a rise in mortality rates occurring within 10 to 15 years.
We then investigated the current level of integration of climate factors in actuarial models.
The responses show varied levels of integration of climate change into mortality modelling across the profession (see table 1). Scenario analysis (based on indicative factors) was the most widely used, although respondents shared that while scenarios are helpful for context and planning, they are often not reliable alone for setting assumptions, particularly given common concerns about their ability to capture extreme risks or tipping points.
Table 1: Approaches to considering mortality outcomes from climate change
| Approach | Currently used | In development | Not considered |
| Scenario analysis, based on indicative factors | 78% | 0% | 22% |
| Parameter setting, based on plausible outcomes | 25% | 40% | 35% |
| Full climate models (in-house), based on available data and analysis | 16% | 16% | 68% |
| Full climate models (external), based on available data and analysis | 18% | 12% | 70% |
The responses show varied views on the extent to which mortality and morbidity assumptions already reflect the effects of climate change. Mortality impacts are considered more often than morbidity impacts, with 54% believing climate risk is one of many factors incorporated into overall mortality assumptions, though its impact is not separately identifiable and explicit adjustments are rare.
On the other hand, many participants indicated that they do not explicitly incorporate climate change effects into morbidity assumptions. A substantial proportion of respondents report using no quantitative modelling techniques at all.
The responses suggest that the primary trigger for adopting more pessimistic mortality assumptions in light of climate change would be clear, reliable, and consistent evidence showing that climate change is materially impacting mortality rates. Changes to assumptions are expected to be gradual. Sudden collapses are seen as possible, but unlikely.
We explored and identified methodological barriers and data constraints that impede the effective integration of climate factors in actuarial practice.
The responses reveal mixed views, with significant gaps in current practice. Several respondents acknowledged they have not investigated this area or have no opinion, while others noted the extreme difficulty in distinguishing climate change impacts on current mortality rates, particularly given the typically short experience periods used in analysis.
Attribution of deaths to climate change is inherently complex, with no reliable UK experience data expected in the foreseeable future. Respondents noted that even where data exists, it’s often very limited and relies heavily on judgement.
It was noted that while there is information available on economic variables under climate scenarios, there is far less on health. While useful data does exist in scientific research and specialist organisations, the profession will need to stay open to new science and develop more advanced ways of modelling future impacts.
Survey responses reveal that modelling the impact of climate change on mortality and morbidity in actuarial practice is characterised by a wide variation in approaches, ranging from limited current analysis to detailed multi-factor frameworks.
While many organisations rely heavily on historical mortality data and compliance-driven scenario illustrations, some welcome incorporating broader health and macroeconomic variables under plausible climate scenarios.
Respondents emphasised the complexity of isolating climate impacts from interconnected drivers, such as lifestyle, healthcare, and economic conditions. This encourages pragmatic approaches that combine expert judgment, scenario analysis, and integration with broader risk models.
There is consensus on the importance of including physical risks alongside transitional risks, despite the latter’s perceived greater short-term relevance, reflecting the need for robust, holistic models that improve risk understanding rather than yield precise predictions.
When asked about how the uncertainties in modelling the risk of climate change on mortality and morbidity can be adequately communicated with stakeholders, respondents suggested multiple approaches.
Common themes included using scenario analysis to illustrate a range of potential outcomes under different climate pathways, complemented by qualitative narratives to capture factors not explicitly modelled.
Several emphasised making model limitations explicit, assessing whether they lead to over- or underestimation of risk (often the latter), and quantifying the potential magnitude of any underestimation. Others advocated expressing impacts in financial terms, using relative risk measures, and taking a holistic view of both assets and liabilities.
Some recommended promoting understanding of deterministic models and ensuring stakeholders appreciate that extreme, but plausible, outcomes remain possible.
Most respondents felt that modelling climate change risks for mortality and morbidity does not necessarily lead to better communication with stakeholders than scenario modelling. They caution that such models can become complex ‘black boxes’ whose assumptions are difficult for non-technical audiences to interpret. Many noted that scenarios are generally easier to explain and can help stakeholders visualise how risks may materialise and interact.
The findings highlight a need for improved access to climate-health data, and practical frameworks to support the consistent integration of climate-related mortality and morbidity risks into actuarial work.
Respondents expressed strong support for collaborative development of standardised scenarios, illustrative modelling approaches, and case studies to bridge the gap between public-health research and actuarial application.
Peter Carr and Chris Tavener on behalf of the IFoA’s Demographics - Mortality and Morbidity Working Party in the sustainability practice area.
