Insurers are on standby as New South Wales and Victoria manage the impacts of storms, heavy rain, and falling temperatures that increased short‑term flood and wind risk across both states on Monday and may leave a legacy of claims into Tuesday.
A cold front that crossed south‑east Australia on Sunday and Monday delivered cooler air and widespread showers to New South Wales, Victoria, and parts of Tasmania, prompting the Bureau of Meteorology (BOM) to issue several severe weather warnings for heavy rainfall and potentially damaging winds. Sky News Weather presenter Wendy John described the pattern as “ominous conditions” likely to persist through Monday, with a continued risk of thunderstorms in parts of both states. “By and large, the chance of storms (is) pretty strong. Over Sunday night we’ll see the possibility of those severe storms across the highland regions between Victoria and New South Wales, creating very strong wind gusts and isolated heavy falls. Then into Monday, even afternoon along Batemans Bay and along that Sydney coastline and in the interior (of NSW),” John said.
The highland corridor between the two states and the New South Wales South Coast includes areas of concentrated exposure to flash flooding, roof and tree damage, and disruption to power and local infrastructure. Short, intense rainfall can cause localised flooding that often leads to a large number of lower‑severity claims, particularly where drainage or roofing is already under strain from earlier weather. The BOM indicated that six‑hourly rainfall totals of up to 65 millimetres were possible across parts of the northeastern Victorian ranges. Heavy rain and potentially damaging winds were forecast for the East Gippsland, North East, and West and South Gippsland forecast districts. In New South Wales, alpine areas of the Snowy Mountains and adjacent South‑west Slopes were expected to see six‑hourly totals up to 70 millimetres into Monday morning before conditions eased.
While the most immediate concern for insurers has been in New South Wales and Victoria, conditions across other capitals on Monday pointed to a broader weather pattern that could contribute to accumulation risk. Melbourne began the week with showers and a maximum of about 20 degrees, while Sydney recorded cloudy conditions with showers and a top near 25 degrees. Canberra faced a rainy start to the week with a forecast high around 17 degrees.
Hobart saw light rain in places but was expected to remain mostly dry with a top close to 20 degrees. Adelaide was forecast to see further rain and a maximum of about 19 degrees. Perth entered the working week with milder, more stable conditions and a high near 23 degrees. Brisbane was expected to reach around 26 degrees, and Darwin was forecast to be the warmest capital at roughly 34 degrees under partly cloudy skies. Such a pattern points to localised severe weather in some regions combined with lower‑severity, weather‑related losses elsewhere. Even without a single major catastrophe, this can increase demand on claims handling, repair networks, and event response plans as insurers deal with multiple small‑to‑medium events occurring close together.
Beyond the immediate storm activity, insurers are monitoring rapid changes in Pacific Ocean temperatures that could influence the hazard mix in the second half of 2026. Reporting by the ABC indicates that sea surface temperatures in the central Pacific have risen by more than 1 degree Celsius since January, marking a fast shift toward El Niño conditions and the quickest transition from La Niña to El Niño since 1976.
The NIÑO3.4 index, a widely used indicator of Pacific climate state, is currently modestly positive and is forecast to rise further. The BOM’s ACCESS‑S model projects that the index could approach +2.9C in October, which would represent an unprecedented oceanic El Niño signal if it occurs. International forecast centres generally anticipate a strong event, with most projections between +1.5C and +2C. A strong El Niño typically shifts probabilities toward drier and warmer conditions in northern and eastern Australia between June and November. Historically, El Niño years account for nine of the 10 driest winter-spring periods on record in eastern Australia, with implications for crop yields, water‑dependent industries, hydropower, and bushfire‑exposed property portfolios.
Climate scientists stress that even a strong or record‑strength El Niño does not guarantee record drought or heat in Australia, introducing uncertainty for insurers seeking to integrate the outlook into pricing, accumulation controls and reinsurance programs. University of New South Wales climate scientist Andrea Taschetto has noted that one of the strongest El Niño events in 1997/98 produced only modest changes in Australian rainfall, while a weak El Niño in 2002/03 coincided with severe drought.
Additional climate drivers, including regional sea‑surface temperature patterns and atmospheric circulation, can modify how El Niño conditions translate into local weather. Taschetto also highlighted the broader role of the El Niño–Southern Oscillation (ENSO) in spring rainfall variability, noting that “[the El Niño Southern Oscillation] accounts for up to 40% of the precipitation variability from September to November. So, it’s a significant number.”
Recent observations across parts of eastern Australia already point to emerging dryness. Sites in Gippsland, central and northern New South Wales, and southern Queensland are tracking their driest April in decades, with some locations recording only a few millimetres of rain or none at all. Reduced rainfall has lowered soil moisture in regions such as New England and parts of southern Queensland, contributing to early indicators of drought. These conditions have implications for crop performance, pasture condition, water resources, and the build‑up of bushfire fuels, with potential flow‑through to agribusiness and property claims as 2026 progresses.
However, Taschetto and other scientists point to the “autumn predictability barrier,” when climate models tend to be less reliable and individual weather events over the Pacific can alter the evolution of El Niño. In 2014, early forecasts suggested a strong El Niño that did not fully develop, while a major El Niño event followed in 2015-16. The BOM’s current long‑range guidance for winter shows only a slightly increased chance of “unusually dry” conditions in parts of south‑eastern and south‑western Australia, together with a clearer signal for warmer‑than‑average daytime temperatures across much of the country outside the tropics.
The combination of recent storm activity in New South Wales and Victoria and a developing El Niño signal for later in 2026 points to a year in which different perils may dominate at different times rather than a single main hazard. Maintaining flexibility in underwriting, closely tracking climate indicators, and working with policyholders on mitigation and preparedness are likely to remain important in managing volatility across short‑tail and climate‑sensitive lines as the year unfolds.
