Long-term Impact of Climate Change on Mortality - a Study for Portugal

This work aims to study the long-term impact of climate change on mortality rates in Portugal, having in mind the specific setting of life insurance business in the country. Life insurance requires, among other factors, accurate mortality forecasts, reason why considering the effects of climate change on mortality in the long-term is essential for correct pricing and reserving of life insurance products. After a review of the (still scarce) existing literature, it was possible to conclude that only temperature and air pollution will pose a material risk to the population mortality, and consequently to life insurance. Applying models and data already available, the effects of both risk factors were assessed at a regional level, due to the exposure differences among the Portuguese regions, and considering years 2030 and 2050. The option for 2030 and 2050 was made precisely in order to determine the population-weighted mortality shock, resulting from temperature and air pollution variations, in the long-run. The overall results indicate that the effects of temperature change will vary depending on age (younger population and older population, for instance) and the year (2030 or 2050). For air pollution, and because climate projections suggest the decrease in greenhouse gas emissions, the concentration of the main pollutants affecting health will consequently decrease. This results in the cause related mortality to decrease over time, throughout all ages.