Full Breakdown
Europe’s Heatwaves Reveal a Growing Insurance Gap for Businesses
8/16/2026, 7:43:51 AM
Heatwave Impact on Hospitality and the Wider Economy
Europe’s fifth heatwave of the year has forced traditional outdoor “aperitivo” gatherings in Padua to shift later, leaving terraces empty. A survey of about 600 hospitality firms in Padua and its province found that more than 80 % reported turnover declines of roughly 20 % during the spell, a loss that “wipes out your margin.” “A 20% decline wipes out your margin,” — Federica Luni, president of hospitality association APPE Padova The same heat has disrupted trains, reduced agricultural yields and raised factory cooling costs, compounding the strain on productivity across the continent.
Scope of the Protection Gap
Moody’s estimates that last summer’s European heatwaves cost €43 billion in lost economic output while generating only about €500 million of insured payouts. A 2023 survey of 9,000 small- and medium-sized firms for Europe’s insurance regulator showed that 28 % held business-interruption cover as part of property insurance and 17 % had non-damage business-interruption protection for events such as strikes. CDP data indicate that 35 % of the companies it tracks identified heatwaves as a risk driver, especially in manufacturing, services, infrastructure and food-related sectors.
Industry and Insurer Responses
“Heat in itself is not a traditionally insured risk,” — Swenja Surminski, managing director for climate and sustainability at Marsh Swiss Re’s head of UK and Ireland public-sector solutions, Aidan Kerr, argues that “parametric insurance can really play a role,” offering automatic payouts when temperatures exceed predefined thresholds. “Parametric insurance can really play a role,” — Aidan Kerr, head of UK and Ireland public sector solutions at Swiss Re Parametric products are already used in agriculture, and KBV Research projects the European parametric-insurance market to reach $7.93 billion by 2031, growing at a compound annual rate of 9.5 % between 2025 and 2032.
Verbatim Quotes
- “A 20% decline wipes out your margin,” — Federica Luni, president of hospitality association APPE Padova “A 20% decline wipes out your margin,” — Federica Luni, president of hospitality association APPE Padova
- “Heat in itself is not a traditionally insured risk,” — Swenja Surminski, managing director for climate and sustainability at Marsh “Heat in itself is not a traditionally insured risk,” — Swenja Surminski, managing director for climate and sustainability at Marsh
- “The real loss is the revenue you don't make and the business activity that never takes place because of the outage,” — Federica Luni, president of hospitality association APPE Padova “The real loss is the revenue you don't make and the business activity that never takes place because of the outage,” — Federica Luni, president of hospitality association APPE Padova
- “Parametric insurance can really play a role,” — Aidan Kerr, head of UK and Ireland public-sector solutions at Swiss Re “Parametric insurance can really play a role,” — Aidan Kerr, head of UK and Ireland public sector solutions at Swiss Re
What’s Next
Insurers are expanding parametric offerings, but many firms must also adapt operations—investing in cooling technologies, redesigning workplaces and stress-testing supply chains—to mitigate future heat-related revenue losses.
