By Randal Waters ,
Senior Vice President, Emerging Risks Group, Marsh Advisory
10/03/2023 · 3 minute read
Extreme heat has become a pressing issue affecting many regions around the world, including the US. According to the US Environmental Protection Agency (EPA) , from the 1960s to the 2020s, there has been a noticeable upward trend in the frequency and intensity of heatwaves, especially among the Southwestern states (CA/TX/AZ) and southern Atlantic coast (VA/NC/SC).
These increases have led to a range of adverse effects on human health, infrastructure, and the environment. Despite the amplified impact on worker safety, and unlike other common forms of workplace injury, extreme heat has not yet been the subject of protective regulations to date. This further amplifies worker safety risk in the absence of proactive steps by organizations.
Extreme heat has been shown to exacerbate the rate of injuries in both indoor settings, such as manufacturing, and outdoor settings, such as construction. Older people tend to be more vulnerable to extreme heat in general, but in workplace settings, even young people are susceptible — such as the 24-year-old UPS driver in California whose unfortunate death last summer was attributed to dehydration and heat stroke. This tragedy contributed to the prolonged negotiation with Teamsters to secure air-conditioning in new trucks.
An academic study, using data spanning injury claims from the nation's largest workers’ compensation system (2001-2018), found that rising temperatures are significantly contributing to workplace injuries. This increase is estimated to cause approximately 20,000 injuries per year. More recent analysis has estimated the total economic loss in the US to be at least US$100 billion annually according to a report in the Atlantic Council.
Earlier this year, Marsh conducted analysis which demonstrated that heat-related workers’ compensation claims have increased significantly over the last 10 years. In particular, the Southwestern United States has seen the incidents of heat-related claims double during this period.
Notably, the El Niño event during the period of 2014 to 2016 saw a peak in the number of claims; El Niño conditions release additional heat into the atmosphere and are associated with warmer years on average, so this highlights the sensitivity of worker wellbeing to climatic fluctuations.
Addressing extreme heat's impact on workers is important for a number of reasons:
This analysis is based on data from the Marsh casualty big data lake. As the largest broker in the world, we are able to leverage our data to provide clients with unique insights into insurable losses. Our casualty big data lake contains millions of unique claims covering thousands of different organizations, with billions of data points that can be leveraged to provide unique insights into business interruption and workers’ compensation claims.
Heat-related claims were identified using relevant NCCI nature-of-injury codes across all industry groupings for workers’ compensation claims in the United States.