How much does a heat wave cost? Insurers and CEOs want to know.
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The property information firm Cotality, previously known as CoreLogic, recently started offering heat-hazard modeling on its widely used risk-analysis platform. And Mercer, a unit of Marsh & McLennan Cos Inc., in May launched a climate health cost forecaster tool evaluating how extreme heat and other risks could impact companies' health insurance costs. It draws on historical incidence data, medical claim codes associated with climate events, and published research.
'The health cost is but one of many,' said Tracy Watts, Mercer's US leader for health care policy. 'You've got increased workers' compensation cost, disability issues, life insurance, absentee issues.'
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These newer tools follow the emergence of hedging instruments like weather derivatives, forward contracts, and parametric insurance. Using a forward contract, for example, a utility might agree to buy extra electricity from a producer at a certain price for the summer. If temperatures stay low, they lose; if they soar, they win. Parametric insurance pays out only if predetermined physical criteria are reached — say, temperatures above 95 degrees Fahrenheit for five days running.
'I think when we look more closely at extreme heat,' said Garrett Bradford, a principal at Milliman Inc., an actuarial and management consulting firm, 'we will find the risk often isn't taken sufficiently into account' in insurance, 'and the downside of a major heat event is potentially significant.'
Last year was the hottest ever recorded, and the United States has experienced deadly heat waves this decade such as the 2021 heat dome in the Pacific Northwest that killed hundreds of people. Heat waves in US cities have become more frequent and the heat season has gotten longer, according to the US Environmental Protection Agency.
As doctors and public officials tackle the rise in dangerous health effects, there are early efforts to assess heat's financial toll. In California alone, the state found in a study published last year that seven extreme events over a 10-year period from 2013 to 2022 caused $7.7 billion in economic harm, including $44 million in lost milk production from a single 2017 heat wave in the Central Valley. (Cows produce less milk in very hot conditions.)
One challenge for predicting a heat wave's impacts, said Anand Srinivasan, a Cotality executive who develops climate change-related products, is that heat damage is relatively complex to model. Many different variables determine its impact. For starters: How long does the heat wave last? Is it dry or wet heat? Does it cool down at night? And the risks are industry-specific. A business with an outdoor workforce has much more to worry about than one whose employees have air conditioning.
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As of last year, Cotality models not just 'acute' perils like wildfires and floods but also 'chronic' ones: extreme heat, drought, cold waves, and extreme precipitation. The first edition of its chronic-peril modeling tool offers risk indices for heat down to an address level but doesn't estimate the monetary impact of a heat event.
'What we can do is provide the analytics and data for people,' Srinivasan said. 'That way, a typical [company] risk manager would say, 'OK, do I keep my office open during this heat wave? What kind of extra support do I need to provide to my personnel?''
Srinivasan said he expects modeling of heat waves' financial consequences, industry by industry, will follow eventually.
The data firm Skyline Partners, which has offices in Colorado and the UK, has developed metrics for a custom parametric insurance policy covering dairy cows stressed by heat. Laurent Sabatié, Skyline's cofounder and executive director, said figuring it out required a 'substantial amount of analysis.'
Wildfire and hurricane models have been 'commoditized' to a certain extent, he said, but heat prediction is still 'bespoke' since it is industry-specific as much as place-based.
In the past, insurance companies have sometimes perceived changes in climate risk too late and ended up paying out dearly after outsized events. Two examples are Hurricane Andrew in Florida in 1992 and Northern California's Camp Fire in 2018. In both cases, insurers sustained losses far outside the expected parameters; each disaster led to investments in far more accurate modeling of hurricanes and wildfires, respectively (and then in higher premiums for customers).
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The technology to run a full hazard analysis on heat for any industry or city is there, said Cole Mayer, who runs parametric products for Aon Plc, a risk management firm. But clients' appetite to pay for more insurance is still limited. 'There's a risk perception evolution that needs to happen,' Mayer said.
AI and crypto, with their dependence on heat-sensitive data centers, may propel the growth of the market, he adds: 'These are exposures that didn't exist to the same extent 10 years ago.'
Dave Bigelow, a climate risk adviser for Aon, thinks time alone will do it. 'We've got hundreds of years of records of floods and hurricanes and acute perils,' he notes. 'But for heat, we're just starting to see it' in the data.
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Boston Globe
9 hours ago
- Boston Globe
How much does a heat wave cost? Insurers and CEOs want to know.
Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up Advertisement The property information firm Cotality, previously known as CoreLogic, recently started offering heat-hazard modeling on its widely used risk-analysis platform. And Mercer, a unit of Marsh & McLennan Cos Inc., in May launched a climate health cost forecaster tool evaluating how extreme heat and other risks could impact companies' health insurance costs. It draws on historical incidence data, medical claim codes associated with climate events, and published research. 'The health cost is but one of many,' said Tracy Watts, Mercer's US leader for health care policy. 'You've got increased workers' compensation cost, disability issues, life insurance, absentee issues.' Advertisement These newer tools follow the emergence of hedging instruments like weather derivatives, forward contracts, and parametric insurance. Using a forward contract, for example, a utility might agree to buy extra electricity from a producer at a certain price for the summer. If temperatures stay low, they lose; if they soar, they win. Parametric insurance pays out only if predetermined physical criteria are reached — say, temperatures above 95 degrees Fahrenheit for five days running. 'I think when we look more closely at extreme heat,' said Garrett Bradford, a principal at Milliman Inc., an actuarial and management consulting firm, 'we will find the risk often isn't taken sufficiently into account' in insurance, 'and the downside of a major heat event is potentially significant.' Last year was the hottest ever recorded, and the United States has experienced deadly heat waves this decade such as the 2021 heat dome in the Pacific Northwest that killed hundreds of people. Heat waves in US cities have become more frequent and the heat season has gotten longer, according to the US Environmental Protection Agency. As doctors and public officials tackle the rise in dangerous health effects, there are early efforts to assess heat's financial toll. In California alone, the state found in a study published last year that seven extreme events over a 10-year period from 2013 to 2022 caused $7.7 billion in economic harm, including $44 million in lost milk production from a single 2017 heat wave in the Central Valley. (Cows produce less milk in very hot conditions.) One challenge for predicting a heat wave's impacts, said Anand Srinivasan, a Cotality executive who develops climate change-related products, is that heat damage is relatively complex to model. Many different variables determine its impact. For starters: How long does the heat wave last? Is it dry or wet heat? Does it cool down at night? And the risks are industry-specific. A business with an outdoor workforce has much more to worry about than one whose employees have air conditioning. Advertisement As of last year, Cotality models not just 'acute' perils like wildfires and floods but also 'chronic' ones: extreme heat, drought, cold waves, and extreme precipitation. The first edition of its chronic-peril modeling tool offers risk indices for heat down to an address level but doesn't estimate the monetary impact of a heat event. 'What we can do is provide the analytics and data for people,' Srinivasan said. 'That way, a typical [company] risk manager would say, 'OK, do I keep my office open during this heat wave? What kind of extra support do I need to provide to my personnel?'' Srinivasan said he expects modeling of heat waves' financial consequences, industry by industry, will follow eventually. The data firm Skyline Partners, which has offices in Colorado and the UK, has developed metrics for a custom parametric insurance policy covering dairy cows stressed by heat. Laurent Sabatié, Skyline's cofounder and executive director, said figuring it out required a 'substantial amount of analysis.' Wildfire and hurricane models have been 'commoditized' to a certain extent, he said, but heat prediction is still 'bespoke' since it is industry-specific as much as place-based. In the past, insurance companies have sometimes perceived changes in climate risk too late and ended up paying out dearly after outsized events. Two examples are Hurricane Andrew in Florida in 1992 and Northern California's Camp Fire in 2018. In both cases, insurers sustained losses far outside the expected parameters; each disaster led to investments in far more accurate modeling of hurricanes and wildfires, respectively (and then in higher premiums for customers). Advertisement The technology to run a full hazard analysis on heat for any industry or city is there, said Cole Mayer, who runs parametric products for Aon Plc, a risk management firm. But clients' appetite to pay for more insurance is still limited. 'There's a risk perception evolution that needs to happen,' Mayer said. AI and crypto, with their dependence on heat-sensitive data centers, may propel the growth of the market, he adds: 'These are exposures that didn't exist to the same extent 10 years ago.' Dave Bigelow, a climate risk adviser for Aon, thinks time alone will do it. 'We've got hundreds of years of records of floods and hurricanes and acute perils,' he notes. 'But for heat, we're just starting to see it' in the data.
CNET
2 days ago
- CNET
Don't Forget to Thaw Your Frozen Meat Ahead of Fourth of July Cookouts
Planning on grilling over the Fourth of July weekend? Don't forget about the meat in your freezer. If you're planning to indulge in it this holiday weekend, you'll want to make sure that you properly thaw it beforehand. Experts warn against cooking frozen meat because the internal temperature often doesn't get high enough to kill lingering bacteria, especially around bones and more central structures. If consumed, it could pose a very serious health risk. I asked Diego Campos Vargas, executive chef at CAMP in Greenville, South Carolina, an expert when it comes to churning out high-quality dishes for carnivores. I recently dined at his establishment, where I noshed on everything from seared scallops and grilled octopus to steak pinchos and merguez agnolotti -- all of which were cooked perfectly and left a lasting impression. "Unfortunately, we live in a society where we expect things to move fast and to be ready, but food shouldn't be that way. You shouldn't speed up cooking methods and processes," he says. "You can cook meat from frozen, but not with all products." That said, Vargas shares with us one exception to the thaw process. Here are his top tips for anyone who may be short on time, but who still want to achieve flavorful mealtime success. Best practices for safely thawing meat Poultry and other large cuts if meat should be thawed slowly in the fridge for safety. Getty Images 1. The slow thaw is best Nothing beats a slow thawing method to preserve the integrity of meat and prepare it safely. "Ideally, you want to thaw proteins slowly in a fridge," says Vargas. "At CAMP, we plan ahead. When we get our delivery on Wednesday, we know we will need to prepare the duck confit, octopus, etc. over the weekend." "Instead of storing in the freezer, we will store it in sheet pans inside our walk-in. This way, the product slowly gets to the same temperature as the walk-in. By the second day, the protein is ready to be processed and cooked as needed," he adds. 2. Thaw under cold running water But if time is of the essence and you're in a situation where meat must be thawed immediately, Vargas says that the best practice is to place the protein in a container under the sink and allow cold water to run continuously over it. " This will ensure the water stays at a constant temperature," he says. "The Department of Health and Environmental Control recommends that you run cold water when practicing this technique because bacteria love that 70 degrees Fahrenheit to 100 degrees Fahrenheit environment." Read more: How to Properly Thaw Turkey 3. No time to thaw? Braising is your best bet If there is one cooking technique that yields the most successful cooking-from-frozen outcome, it's braising. Not only does the initial high temperature and subsequent extended cooking time kill bacteria and break down the meat's tough fibers, but it's a method that also allows the layering of flavors along the way. "You will be able to infuse more flavor and moisture to the end product throughout the cooking method," Vargas says. The best way to thaw frozen meat is in the fridge over night. AnnickTo braise frozen meat, start by searing each side of the cut (see below on the best cut types) with olive oil or butter in a Dutch oven or heavy pot over medium-high heat. The meat should develop a crust and turn golden brown. Once this happens, remove the meat from the pot and set it aside. Next, add aromatics such as garlic and onions and soften them in the leftover fat. You may need to scoop out a bit of the protein's juices beforehand, as frozen meat will release more liquid than thawed meat. Deglaze the pan with a liquid of choice. This will typically be stock, broth, wine or even beer. Bring the pot to a simmer and add your meat, ensuring that the liquid doesn't completely cover it. Instead, the protein should be sitting in a shallow bath on low heat. Cover the pot and allow for the meat to cook for a couple hours or until it reaches desired tenderness. You can also add vegetables, herbs or anything else to enhance flavors, though cooking times will vary by ingredient (i.e. a potato is going to take longer to cook than celery). It's also advised that frozen meat be cut into smaller pieces before or after searing, as it will cook more evenly and timely. Safety tip: The type of meat and cut matters Tender cuts of steak should be thawed before cooking, no questions asked. Chowhound It's no surprise that different protein cuts often require different cooking techniques and times to maximize their flavor and tenderness. Vargas recommends, at least with beef, that you take the cut of meat into consideration before deciding to braise from frozen. Typically, larger cuts that demand longer cooking times such as osso bucco are ideal for braising. If it's a filet mignon that only requires a few minutes of sear, the meat must be thawed. A good rule of thumb: If the protein will literally transform and break down through braising, it should be OK to cook from frozen. Anything smaller and with less fat content will require a thaw. How long you freeze your proteins matter, too Simply placing meat in the freezer won't suffice to extend its life. Different types benefit from different freezing techniques and lengths of time. Some meats will thaw quicker thanHigh-fat cuts like rib eyes can certainly last in the freezer for longer, but it's wise to follow these recommended freezing times for more popular options: Octopus: one month Chicken breast: two months Chicken legs and thighs:three months Pork butt: three months Pork chops: two months Beef filets: two months Chuck beef: four months "As a rule of thumb, I would say that you want to freeze proteins for less time if they cook at a lower temperature," recommends Vargas. "For example: fish is cooked 'well-done' at 135 degrees Fahrenheit while beef is cooked well-done at 165 degrees Fahrenheit. You want to freeze fish and all other seafood for less time than you would beef and pork." Proper sealing is key during the freeze To achieve maximum freezer capabilities, Vargas recommends investing in a vacuum seal machine with proper storage bags. "I freeze leftover raw proteins all the time in my house," he reveals. "The bags also make it easy for thawing in the fridge." Fish can also be frozen, but not for as long as beef can be."When freezing, water molecules freeze, but when thawed out, the molecules melt and become the liquid that leaks from the protein," explains Vargas. "All those juices could be part of the protein, but they are lost after freezing. This influences the quality of the product greatly." Looking for the latest and greatest models to keep meat and all of its components intact? Check out our round-up of the top vacuum sealers of 2025.
CNET
2 days ago
- CNET
Don't Forget to Thaw Your Frozen Meat Ahead of Fourth of July Grilling
Grilling for Fourth of July weekend? Don't forget about the meat in your freezer. If you're planning to indulge in it this holiday weekend, you'll want to ensure to properly thaw it beforehand. Experts warn against cooking frozen meat because the internal temperature often doesn't get high enough to kill lingering bacteria, especially around bones and more central structures. If consumed, this can pose a very serious health risk. I asked Diego Campos Vargas, executive chef at CAMP in Greenville, South Carolina, an expert when it comes to churning out high-quality dishes for carnivores. I recently dined at his establishment, where I noshed on everything from seared scallops and grilled octopus to steak pinchos and merguez agnolotti — all of which were cooked perfectly and left a lasting impression. "Unfortunately, we live in a society where we expect things to move fast and to be ready, but food shouldn't be that way. You shouldn't speed up cooking methods and processes," he says. "You can cook meat from frozen, but not with all products." That said, Vargas shares with us one exception to the thaw process. Here are his top tips for anyone who may be short on time, but not on achieving flavorful mealtime success. Best practices for safely thawing meat Poultry and other large cuts if meat should be thawed slowly in the fridge for safety. Getty Images 1. The slow thaw is best Nothing beats a slow thawing method to preserve the integrity of meat and prepare it safely. "Ideally, you want to thaw proteins slowly in a fridge," says Vargas. "At CAMP, we plan ahead. When we get our delivery on Wednesday, we know we will need to prepare the duck confit, octopus, etc. over the weekend." "Instead of storing in the freezer, we will store it in sheet pans inside our walk-in. This way, the product slowly gets to the same temperature as the walk-in. By the second day, the protein is ready to be processed and cooked as needed," he adds. 2. Thaw under cold running water But if time is of the essence and you're in a situation where meat must be thawed immediately, Vargas says that the best practice is to place the protein in a container under the sink and allow cold water to run continuously over it. " This will ensure the water stays at a constant temperature," he says. "The Department of Health and Environmental Control recommends that you run cold water when practicing this technique because bacteria love that 70 degrees Fahrenheit to 100 degrees Fahrenheit environment." Read more: How to Properly Thaw Turkey 3. No time to thaw? Braising is your best bet If there is one cooking technique that yields the most successful cooking-from-frozen outcome, it's braising. Not only does the initial high temperature and subsequent extended cooking time kill bacteria and break down the meat's tough fibers, but it's a method that also allows the layering of flavors along the way. "You will be able to infuse more flavor and moisture to the end product throughout the cooking method," Vargas says. The best way to thaw frozen meat is in the fridge over night. AnnickTo braise frozen meat, start by searing each side of the cut (see below on the best cut types) with olive oil or butter in a Dutch oven or heavy pot over medium-high heat. The meat should develop a crust and turn golden brown. Once this happens, remove the meat from the pot and set it aside. Next, add aromatics such as garlic and onions and soften them in the leftover fat. You may need to scoop out a bit of the protein's juices beforehand, as frozen meat will release more liquid than thawed meat. Deglaze the pan with a liquid of choice. This will typically be stock, broth, wine or even beer. Bring the pot to a simmer and add your meat, ensuring that the liquid doesn't completely cover it. Instead, the protein should be sitting in a shallow bath on low heat. Cover the pot and allow for the meat to cook for a couple hours or until it reaches desired tenderness. You can also add vegetables, herbs or anything else to enhance flavors, though cooking times will vary by ingredient (i.e. a potato is going to take longer to cook than celery). It's also advised that frozen meat be cut into smaller pieces before or after searing, as it will cook more evenly and timely. Safety tip: The type of meat and cut matters Tender cuts of steak should be thawed before cooking, no questions asked. Chowhound It's no surprise that different protein cuts often require different cooking techniques and times to maximize their flavor and tenderness. Vargas recommends, at least with beef, that you take the cut of meat into consideration before deciding to braise from frozen. Typically, larger cuts that demand longer cooking times such as osso bucco are ideal for braising. If it's a filet mignon that only requires a few minutes of sear, the meat must be thawed. A good rule of thumb: If the protein will literally transform and break down through braising, it should be OK to cook from frozen. Anything smaller and with less fat content will require a thaw. How long you freeze your proteins matter, too Simply placing meat in the freezer won't suffice to extend its life. Different types benefit from different freezing techniques and lengths of time. Some meats will thaw quicker thanHigh-fat cuts like rib eyes can certainly last in the freezer for longer, but it's wise to follow these recommended freezing times for more popular options: Octopus: one month Chicken breast: two months Chicken legs and thighs:three months Pork butt: three months Pork chops: two months Beef filets: two months Chuck beef: four months "As a rule of thumb, I would say that you want to freeze proteins for less time if they cook at a lower temperature," recommends Vargas. "For example: fish is cooked 'well-done' at 135 degrees Fahrenheit while beef is cooked well-done at 165 degrees Fahrenheit. You want to freeze fish and all other seafood for less time than you would beef and pork." Proper sealing is key during the freeze To achieve maximum freezer capabilities, Vargas recommends investing in a vacuum seal machine with proper storage bags. "I freeze leftover raw proteins all the time in my house," he reveals. "The bags also make it easy for thawing in the fridge." Fish can also be frozen, but not for as long as beef can be."When freezing, water molecules freeze, but when thawed out, the molecules melt and become the liquid that leaks from the protein," explains Vargas. "All those juices could be part of the protein, but they are lost after freezing. This influences the quality of the product greatly." Looking for the latest and greatest models to keep meat and all of its components intact? Check out our round-up of the top vacuum sealers of 2025.
