Overview
- Repeated heatwaves this year have cut consumer footfall and worker productivity, with a Padua survey of about 600 hospitality firms finding more than 80% reported roughly 20% drops in turnover during the latest extreme heat.
- Moody's estimates last summer's heatwaves cost about €43 billion in lost output while insured payouts were roughly €500 million, showing a large mismatch between economic damage and claims paid.
- Traditional property and business interruption policies often do not cover income losses caused by heat-driven operational disruption, leaving many small and medium firms directly exposed.
- Insurers are expanding parametric products that pay automatically when temperatures cross agreed thresholds, but those products must be designed carefully to limit payout errors known as basis risk.
- Longer term, experts say firms should invest in cooling, workplace redesign and supply-chain stress tests to reduce recurring uninsured losses as Europe warms faster than other continents.