A rapidly strengthening Super El Niño is set to redistribute catastrophe risk across global insurance portfolios, dampening Atlantic hurricane activity while raising the likelihood of Pacific cyclones, drought, wildfire and extreme rainfall elsewhere.
NOAA said in its July outlook that El Niño will strengthen through the end of 2026, with a 97% chance it will persist into early spring 2027. The agency assigned an 81% probability that the event will become "very strong" during October through December, placing it among the largest El Niños since record-keeping began in 1950.
A Super El Niño is generally defined as an event in which sea surface temperatures in a specified part of the tropical equatorial Pacific rise at least 2 degrees Celsius above average, four times the threshold for a standard El Niño. Although temperatures have already reached that level, the warming must be sustained to qualify.
Mark Bove (pictured), meteorologist and natural catastrophe solutions manager at Munich Re America, said the speed and timing of the warming have distinguished the developing event from previous Super El Niños.
"We have seen the warming ramp up much faster and much earlier in the summer than we have with other El Niños," Bove told Insurance Business. "Large Super El Niños tend to have certain phenomena associated with them. Weather patterns tend to become more fixed and amplified during strong El Niños compared with weaker ones."
Catastrophe models generally incorporate El Niño and La Niña years within multi-year views of risk rather than reacting to a single season. A five-year North Atlantic window, for example, typically assumes one El Niño year, one La Niña year, and several ENSO-neutral years in between.
El Niño typically suppresses Atlantic hurricane formation because of unfavorable upper-level winds over the Caribbean, the Gulf of Mexico and parts of the Atlantic. In its July 2026 outlook, NOAA called for a below-average season of 8 to 14 named storms, 3 to 6 hurricanes and 1 to 3 major hurricanes, with a 55% chance of coming in below average; Colorado State University's own July update was even lower, forecasting just 9 storms, 4 hurricanes and 1 major hurricane.
Reduced probability does not mean zero risk, however. Bove pointed to Hurricane Andrew, which struck Florida during an El Niño year in 1992 and remains one of the costliest hurricanes in US history with insured losses at $27.3 billion in 2017 dollars, according to the Insurance Information Institute.
While Atlantic activity may ease, El Niño tends to increase hurricane risk along Pacific Mexico and Hawaii and elevate typhoon exposure for parts of mainland China, Korea and Japan.
Wildfire and drought risk may also intensify in Australia, Indonesia, Malaysia and parts of Brazil, where the two hazards are closely linked. In North America, Bove expects further fires in the American West, though he was careful to note that not every fire will threaten property.
California presents a more complicated picture. A wetter El Niño winter may temporarily reduce wildfire activity but also stimulate vegetation growth that later dries into fuel once the rains stop and the state's Mediterranean climate reasserts itself. Heavy rain over recent burn scars, including areas affected by the Eaton and Palisades fires, could also raise mudslide exposure.
The warning follows a record wildfire loss year. Munich Re estimated the January 2025 Los Angeles fires caused approximately $53 billion in total losses and $40 billion in insured losses, making them the costliest wildfire disaster on record.
Beyond the immediate catastrophe-risk picture, Bove noted the long-term repercussions of a record-warm year driven partly by El Niño, such as continued stress on coral reefs and the disruption of major fisheries along the South American coast, both systems regularly affected during El Niño events.
"El Niño only shifts the probability (of risk)," Bove said. "Some areas may potentially benefit, while other areas unfortunately face higher probabilities of extreme events.”
