Global insurers and reinsurers face a reshuffling of catastrophe exposures in the second half of the year, as conditions across the tropical Pacific drift toward neutral and a developing El Niño takes shape, according to analysis from Guy Carpenter.
The reinsurance broker's forecast indicates sea surface temperatures are warming in the central and eastern Pacific, with most models pointing to a continued shift through the summer.
Colorado State University (CSU), in its April outlook, is calling for 13 named storms, six hurricanes and two major hurricanes in the 2026 Atlantic season. The numbers sit below the 1991–2020 averages of 14, seven and three, and mark CSU's lowest predicted storm count since 2019.
Phil Klotzbach, CSU's senior research scientist, said current weak La Niña conditions were likely to transition to El Niño in the coming months, "with the potential for a moderate to strong El Niño for the peak of hurricane season."
Guy Carpenter cautioned that while the magnitude of the event remained uncertain, the directional signal toward a warming Pacific was becoming clearer.
Forecast confidence is historically limited at this time of year because of the so-called spring predictability barrier, though skill typically improves through April and May.
CSU put the probability of at least one major hurricane landfall along the continental US coastline at 32%, against a 1880–2020 average of 43%. Caribbean landfall odds were placed at 35%, compared with a historical 47%.
Vertical wind shear across the tropical Atlantic is expected to be the second highest since 1981, with Accumulated Cyclone Energy projected at roughly 75% of average.
Other houses diverge sharply. Tropical Storm Risk projects 12 named storms and just one major hurricane. The University of Arizona, by contrast, anticipates 20 named storms and four majors. The gap reflects an unresolved debate over whether El Niño-driven shear can overpower record-warm Atlantic sea surface temperatures.
The contrast with 2025 is instructive. NOAA's post-season review showed 13 named storms, five hurricanes and four major hurricanes, with three reaching Category 5 strength – the second-most on record. No hurricane struck the US mainland, the first such occurrence in a decade.
Hurricane Melissa, however, made landfall in Jamaica as a Category 5 and caused close to US$9 billion in damage across the Caribbean, underscoring how concentrated Caribbean losses can occur even in muted US seasons.
Each El Niño episode carries different regional signatures, Guy Carpenter said, with cyclone tracks shaped by shifts in sea surface temperatures, trade winds and atmospheric circulation.
Flood and wildfire exposures redistribute accordingly. Australia and Indonesia historically see suppressed rainfall and accelerated fuel drying through the phase.
Past analogs cited by the broker include flooding in California and Peru in 1997–98 and drought-driven wildfires in Indonesia in 1997–98 and 2015–16.
Carriers, it added, should treat the cycle as a driver of portfolio reshaping, reassessing geographic concentrations and peak peril assumptions before the second half of the year.
