Still Hot and Bothered?

Since Club Vita’s 2018 Hot and Bothered? paper, climate risk has become a increasingly important consideration for UK pension funds and (re)insurers. Whilst the potential for significant financial losses is a major concern, growing regulatory pressure is also a key driver. Bodies like The Pensions Regulator and the Prudential Regulation Authority now expect climate-related risks to be embedded in governance and decision-making processes.

To support this, we present three updated longevity scenarios to help pension funds and (re)insurers assess how climate change could affect future life expectancy. We’ve also mapped these refreshed scenarios to some of the most widely known climate pathways, including those developed by the Intergovernmental Panel for Climate Change (IPCC), enabling a more joined-up view of assets and liabilities and supporting the incorporation of longevity risk into broader risk frameworks.

Whilst these scenarios are not intended to be precise forecasts, they are essential tools for exploring how longevity could be shaped by different climate futures, and for preparing accordingly. In risk management, it’s not just about predicting the future, but being ready for it.