Examining the Indirect Health Consequences of Air Quality Shifts on Life Expectancy Actuarial Data

CHICAGO — The life insurance industry is undergoing a fundamental shift in how it calculates human longevity, as new actuarial data reveals that deteriorating air quality has become a primary driver of chronic disease and premature mortality. According to a landmark series of reports released by the Society of Actuaries (SOA) Research Institute in late 2025, the indirect health consequences of air pollution—specifically fine particulate matter known as PM2.5—now rival the historical impact of major pandemics, forcing insurers to rethink decades of established life expectancy models.

The intersection of climate risk and longevity has moved from a theoretical long-term concern to a present-day pricing variable. Actuaries are now grappling with data showing that prolonged exposure to wildfire smoke and industrial pollutants is reversing years of progress in cardiovascular health.

The New Mortality Multiplier

For nearly a century, life expectancy in developed nations followed a predictable upward trajectory, bolstered by medical advancements and tobacco cessation. However, the SOA’s December 2025 reports, The Impact of Wildfire-Related and Environmental Air Pollution on Morbidity and Modeling the Impact of Wildfire-Related Air Pollution on Mortality, suggest a stagnation or reversal of these gains in regions heavily affected by air quality shifts.

The data indicates that the combined effects of PM2.5 and extreme heat were responsible for between 2.3% and 8.6% of the prevalence of certain chronic conditions studied—a magnitude that the SOA noted "rivaled and often exceeded that of the COVID-19 pandemic and its aftermath."

"Exposure to PM2.5 is a material driver of circulatory conditions, neoplasms, and even mental and behavioral disorders," the SOA Research Institute stated in its executive summary. "Capturing this indirect, delayed relationship between pollution and mortality is the primary modeling challenge for the modern actuary."

From Direct Disasters to Indirect Decay

Historically, insurers viewed climate change through the lens of property and casualty (P&C) risk—focusing on the immediate destruction caused by hurricanes or the direct fatalities from wildfire burns. The new data, however, highlights a more insidious "indirect" consequence: the long-term health decay caused by breathing degraded air.

The 2025 Air Quality Life Index (AQLI) report from the University of Chicago underscores this shift, finding that particulate pollution remains the greatest external threat to global life expectancy. The report found that reducing global PM2.5 levels to World Health Organization (WHO) guidelines would add approximately 1.9 years to the average person's life, an impact greater than that of smoking (1.7 years) or alcohol use (0.3 years).

In North America, the trend is particularly alarming for the life insurance sector. Decades of air quality gains under the Clean Air Act are being erased by the increasing frequency of "smoke seasons." In 2023 and 2024, particulate pollution in Canada and the northern United States reached levels not seen in over 25 years.

"We are seeing a reversal of clean air progress," said Michael Greenstone, the Milton Friedman Distinguished Service Professor in Economics and creator of the AQLI. "This isn't just an environmental issue; it’s a longevity issue that hits the bottom line of every life and health provider."

Actuarial Adaptation: The Rise of Climate-Adjusted Tables

To manage this emerging risk, the life insurance industry is moving away from backward-looking mortality tables in favor of forward-looking, "climate-conditioned" models. The SOA has identified three primary frameworks currently being integrated into actuarial practice:

1. The Stochastic Mortality Framework: An adaptation of the classic Lee-Carter model that incorporates climate variables to estimate short- to medium-term mortality shocks.
2. The Prevalence Scenario Approach: A method that projects future deaths based on the expected rise in chronic disease "prevalence" caused by environmental factors.
3. WHO AirQ+ Methodology: An epidemiological tool used to estimate the number of deaths attributable to specific pollutants like ozone and PM2.5.

"The renewal conversation has changed," noted industry analysts at Environment+Energy Leader in early 2026. "Environmental exposure is being modeled as forward-looking loss probability, not backward-looking claims history."

For life insurers, this means refined underwriting. Some companies are beginning to explore "mortality zoning," where premiums may be adjusted based on a policyholder’s geographic exposure to long-term air quality trends.

The Role of Non-Communicable Diseases

A key finding driving this actuarial re-evaluation is the link between air quality and non-communicable diseases (NCDs). The State of Global Air 2025 report revealed that nearly nine out of 10 air pollution-related deaths are now attributed to NCDs, including heart disease, stroke, lung cancer, and diabetes.

Crucially, for the first time in 2025, dementia was formally included as a major health impact of air pollution. The report estimated that air pollution contributed to over 625,000 dementia deaths globally in 2023, accounting for nearly 12 million "healthy years of life lost."

"As the global population ages, the burden of these diseases is growing," the Health Effects Institute noted in its October 2025 update. "For life insurers, who are in the business of managing long-term health risks, this data is a wake-up call."

Industry Outlook for 2026 and Beyond

Despite these challenges, some industry leaders remain cautiously optimistic about the future of mortality improvements. Speaking at the Global Economic and Insurance Market Outlook for 2025/26, Paul Murray, CEO of Life & Health Reinsurance at Swiss Re, suggested that medical breakthroughs might provide a counterweight to environmental risks.

"We are seeing promising technologies—advancements in obesity drugs, immunotherapy, and mRNA vaccines—that provide reasons for optimism," Murray said. However, he warned that "the factors that have driven mortality improvements in the past are probably not those that are going to drive them in the future."

As the industry enters 2026, the focus is squarely on "stress testing" portfolios against environmental volatility. While the 2026 Global Insurance Outlook from Deloitte projects more measured growth for life insurers, the successful integration of air quality data into actuarial models is seen as a prerequisite for long-term sustainability.

For the policyholder, these shifts may eventually translate into a new reality: where the air they breathe is as significant to their insurance profile as their family medical history or lifestyle choices.

Data Summary: Air Quality and Longevity

Source: Air Quality Life Index (AQLI) 2025 Annual Report.