(Bloomberg) --Europe's insurance and pensions watchdog warned extreme heat is adding to the risks the two industries face.
The European Insurance and Occupational Pensions Authority said multiple coverage areas are likely to be impacted as temperatures rise, including medical costs and income protection.
While the summer's wildfires captured headlines, "climate change also has quieter, less visible consequences," EIOPA Chair Petra Hielkema said in a statement on Wednesday.
"The impact of heat waves on human health is one of them," she said. "Our preliminary study shows that it could become a material risk factor for certain insurance lines and pension providers, despite offsetting factors and strong diversification across products and risks."
The warning is the latest by EU authorities charged with safeguarding the bloc's economic stability. The European Central Bank's top climate official
Europe's banking industry must do more to address the risks climate change poses to collateral, Morningstar DBRS said in an Oct. 1 note, describing it as one of the "most important channels" through which the physical impacts of extreme weather can hit lenders.
The credit ratings company said that while the recent wildfires are unlikely to significantly affect scores, more frequent extreme weather events risk undermining "the resilience, insurability, liquidity, and valuation of certain assets and borrowers." It urged lenders to check the extent to which potential losses can be mitigated through insurance and other instruments.
In the UK, meanwhile, the Financial Conduct Authority on Wednesday
Civil organizations criticized the decision. The move "risks leaving stakeholders, including investors safeguarding more than £3 trillion of UK pension savings, without complete, reliable and comparable data," said Luke Hildyard, head of UK policy at ShareAction.
