The El Niño climate phenomenon has long given property insurers some comfort heading into hurricane season — historically, it tends to suppress the number of Atlantic storms. But experts across the insurance industry say that reassurance is becoming increasingly hollow.
El Niño is characterized by warmer-than-average ocean surface temperatures in parts of the Pacific, which creates atmospheric conditions that make it more difficult for Atlantic hurricanes to develop. U.S. government scientists confirmed El Niño arrived in June — the same month the Atlantic hurricane season began — and are forecasting a below-average 2026 season, with eight to 14 named storms and just one to three major hurricanes.
In past decades, that forecast would have been welcome news for insurers. But insurance brokers, catastrophe modelers, and analysts say the situation has changed dramatically. The industry has faced an average of $30 billion in insured losses each hurricane season in recent years, and a quieter storm count no longer guarantees relief.
The reason comes down to where people live. Federal data shows that the population of coastal counties has grown by more than 40 million since 1970, putting far more people and property in harm’s way. On top of that, home values have climbed more than 70% over the past decade, and reconstruction costs have risen more than 60%. That combination means even a modest hurricane season can produce catastrophic financial losses.
“All it takes is one landfalling hurricane to create an insured loss of a magnitude we’ve never seen before … And that could absolutely happen in an El Niño year,” said Kimberly Roberts, advisory leader of North American peril at reinsurance broker Guy Carpenter.
History backs up that concern. The 1992 hurricane season came near the end of the 1991 El Niño and produced roughly half the average number of storms — but it included Hurricane Andrew, one of the most powerful storms ever to strike the United States, hitting South Florida and then Louisiana. According to the Swiss Re Institute, if Andrew were to strike today, it would cost the insurance industry nearly $100 billion.
By contrast, the record-breaking 2020 season — a non-El Niño year — saw 30 named storms, 14 hurricanes, and seven major hurricanes, yet generated only around $30 billion in insured losses, largely because most storms avoided densely populated areas.
A government data review shows an average hurricane season produces 14 named storms, including seven hurricanes, three of which are major, with annual insured losses averaging around $30 billion between 2016 and 2024, according to data from Aon. Since 1950, El Niño cycles have on average produced about two fewer named storms, according to Jeffrey Strong, senior scientist for tropical cyclone modeling at insurance data firm Verisk.
Catastrophe risk modeling firm Karen Clark & Company warned this month that a direct major hurricane strike on Miami, Tampa, or Houston — all densely populated, high-value metro areas — could produce insured losses exceeding $100 billion. As the firm put it: “Hurricanes are like real estate: the three most important things are location, location, location.”
El Niño also brings above-average rainfall to parts of the southern United States, raising the risk of flooding, landslides, and related damage — additional exposures that insurers must increasingly factor into their calculations.
“We’re seeing higher insured values, more concentration in coastal areas, and more complex supply chains. That means the severity of a single event today can be materially higher than what we saw even a decade ago,” said Monica Ningen, CEO of Property & Casualty Reinsurance US at Swiss Re.
The broader challenge for insurers extends well beyond hurricane season. Climate change is intensifying flooding and wildfires, making risk modeling more complicated than ever. “History has a limit in terms of how much it can teach us,” said Steve Bowen, chief science officer at reinsurance broker Gallagher Re, pointing out that shifting weather patterns may be eroding the reliability of traditional risk models.
In response, insurers are developing more sophisticated tools that combine seasonal climate signals with detailed property-level data to better estimate potential losses. Some experts are also urging the industry to focus more on long-term trends, including rising reconstruction costs and the shifting cost of capital required to absorb major losses.
Artificial intelligence is also entering the picture. AI can help insurers process larger volumes of weather and exposure data, according to Myra Thomas, an analyst at eMarketer — though she cautioned that the technology can “only go so far.”
