An Allianz insurance study estimated that heatwaves caused about 113 billion euros (about 122 billion dollars) in economic losses across European economies this year, damaging productivity, agriculture, energy and transport while increasing pressure on public budgets and insurers.
Italy, Germany and France bear 65% of the losses
Italy topped the list of the hardest-hit economies, with losses estimated at about 28 billion euros (about 30 billion dollars), followed by Germany with about 25 billion euros (about 27 billion dollars), and France with 20 billion euros (about 21.6 billion dollars). Together, the three countries accounted for about 65% of the total estimated losses.
High temperatures reduced working hours, increased absenteeism and diminished employees’ ability to perform their duties, while disrupting some facilities and workshops and throwing production chains into disarray. Companies also incurred additional costs to maintain suitable operating conditions.
Germany’s losses exceed 54 billion euros over five years
Berlin correspondent Issa Taibi, citing the Allianz study, said the latest heatwave cost the German economy about 25 billion euros (about 27 billion dollars), equivalent to nearly 0.5% of gross domestic product, with the impact extending to sectors linked to production and employment.
Taibi added that Germany had incurred more than 54 billion euros (about 58.3 billion dollars) in losses over the past five years as a result of multiple heatwaves and climate fluctuations. The study identified six climate risks that hit the country during the same period.
In France, Paris correspondent Hafiz Mraibeh said the exceptional heatwave caused damage in various regions after temperatures exceeded 40 degrees Celsius, affecting agriculture, services, transport and energy.
Some nuclear generators were shut down during periods of the heatwave because of rising temperatures, as electricity demand increased. Crops and cold chains were also damaged, harvesting was delayed in some areas, and the productivity of workers in transport, offices and trade declined.
Infrastructure and insurance face mounting pressure
Economist Dr Alexander Kateb said climate change was directly affecting European gross domestic product through lost working hours and declining labor productivity, as well as losses from wildfires and extreme weather events.
Kateb said the continuation of these events in the near future would have social, economic and financial repercussions, increasing the burden on insurers and potentially shifting part of the cost to governments through support and compensation mechanisms.
Europe’s limited infrastructure readiness is adding to the bill, as recurring heatwaves require upgrades to buildings, transport networks, energy facilities and cooling systems. Kateb said rebuilding according to more climate-suitable standards could help reduce losses, while experience from countries in the Middle East and North Africa could be used in designing buildings, air-conditioning systems and infrastructure suited to high temperatures.
El Niño could raise global losses to 400 billion euros
An Allianz study projected that El Niño could trigger a larger global economic shock next year, with losses potentially approaching 400 billion euros (about 432 billion dollars) as a result of drought and disruptions to agricultural production, which could put further pressure on food prices.
European economies face the dual challenge of containing current heatwave losses and financing adaptation and prevention measures, as climate risks increasingly affect production, budgets, markets and the insurance sector.
