The abnormal heat wave is causing billions in losses for European businesses
Prolonged heat waves in Europe are leading to a drop in sales, business shutdowns, and significant financial losses. At the same time, traditional insurance often does not cover losses related to temperature anomalies.
According to Moody’s estimates, last year’s heat waves alone cost the European economy approximately 43 billion euros in lost GDP. Insurance companies, however, paid out only about 500 million euros to businesses.
Restaurants, retail stores, agriculture, and transportation are the hardest hit. In Padua, more than 80% of restaurants reported a drop in revenue of about 20%. Due to the heat, people are less likely to visit outdoor dining areas during the day, and businesses are forced to shift their operations to late evening.
The problem is that heat waves do not usually cause direct property damage. The main losses stem from reduced employee productivity, cooling costs, transportation disruptions, and equipment damage.
At the same time, only 28% of small and medium-sized enterprises in Europe have business interruption insurance, and only 17% of companies have policies that cover business interruptions without physical damage to property.
Insurers are already developing parametric insurance, under which payouts are automatically triggered once a specified temperature threshold is exceeded. Such a mechanism can help businesses more quickly recoup losses from extreme heat.
Experts are urging businesses to adjust their work schedules, invest in cooling systems, and assess the resilience of their supply chains to weather anomalies.
Source: Reuters.
In Germany, despite a scorching summer, drought, wildfires, and 12,500 heat-related deaths since the beginning of 2026, there has been no new large-scale surge in protests calling for more active climate policy. According to Deutsche Welle, only a few hundred people took part in a rally outside the Federal Chancellor’s Office in Berlin. In 2019, before the COVID-19 pandemic, climate demonstrations drew hundreds of thousands of participants.
