The UK is heading for a wet, stormy autumn, forecasters say, and with more confidence than usual. What's less clear is whether insurers' models can actually tell them what that means once the water starts moving through supply chains, mortgages and balance sheets.
The Met Office confirmed this week that the El Niño event now developing across the Pacific is on track to be the strongest in living memory, and possibly the biggest since the 19th century. Professor Adam Scaife, the forecaster's head of long-range forecasting, called it "an unprecedented event," adding he has never seen a signal this intense in decades of monitoring the phenomenon.
The warning lands weeks after Insurance Business reported that the same super El Niño had already been flagged as a threat to an already loss-making UK home insurance market, and days after WTW warned that the industry's biggest blind spot isn't the weather itself but how disruption cascades through supply chains once it hits. Speaking to Insurance Business earlier this year, two more senior figures at WTW's climate and research arm argued the gap runs deeper still, down to how flood risk itself is priced, modelled and discussed at board level.
A weather pattern with a 3°C problem
El Niño recurs every two to seven years, triggered when the trade winds that normally push warm Pacific water westward weaken or reverse, letting that heat spread east and eventually into the atmosphere. What's different this time is scale. Sea surface temperatures in the key monitoring zone are already running more than 2°C above the long-term average, well past the 0.5°C threshold used to declare an El Niño at all, and the Met Office's latest projections suggest that figure could pass 3°C by the time the event peaks later this year. Some independent climate researchers put it as high as 4°C.
For the UK, that means a heightened chance of a wet, unsettled autumn and early winter, alongside a smaller increased risk of cold snaps later on. El Niño's usual warming effect on global temperatures also means the Met Office now rates 2027 "very likely" to overtake 2024 as the hottest year on record.
That's an unwelcome backdrop for a property market already under strain. Insurance Business reported last week that a fresh super El Niño had arrived just as reinsurance pricing hit cyclical lows, a combination the market has arguably never had to price before. Association of British Insurers claims data shows why the timing matters: UK property insurers paid out a record £6.1bn in 2025, with domestic flood claims alone up 38% year-on-year to £312m, and the average flood payout up 60% to roughly £30,000. That's before this autumn's weather has arrived.
Speaking to Insurance Business, Hélène Galy, who has spent close to three decades working on natural catastrophe modelling and reinsurance optimisation and now leads the Willis Research Network, gave a view of how the industry's risk models have evolved that was measured rather than alarmist, but still pointed.
"In most cases, I don't think the nature of risk has necessarily changed," she told Bryony Garlick. "But the risks are definitely more cascading, more interconnected than they used to be. We've got a very interconnected world, with very interconnected supply chains, so those risks transmit really quickly, and you get contagion effects and feedback loops between them that can take organisations by surprise."
That interconnectedness, she said, is precisely what most catastrophe models still don't capture. Models tend to be built around individual perils, and even within a single peril, hurricanes for instance, the modelling of secondary effects such as the transition to extra-tropical storms remains patchy. Cross-class "clash" scenarios, where one event hits several lines of business at once, are typically caught by exposure management and scenario planning rather than by the models themselves.
Ester Calavia Garsaball, WTW's senior director for natural catastrophe and risk financing within its climate practice, went further in the same interview. She argued the biggest gap sits in business interruption modelling: tracing how a distant climate or geopolitical shock ripples through a client's supply chain.
"If you model the climate impact of a port, the key equipment is the ship-to-shore cranes," she said. "The port might be in the US, but the cranes are manufactured in China, and it could take up to two years to get a replacement delivered. That link isn't captured in the models." She points to a similar exposure in data centres, where chips manufactured in Vietnam are often packaged in California: two separate points in the same supply chain, both exposed to their own climate and geopolitical risks, neither of which typically shows up in a standard model run.
The consequences aren't hypothetical. Calavia Garsaball described a semiconductor sector client hit by the deep freeze that struck Texas in February 2021, when a prolonged power outage triggered a significant business interruption loss. Afterwards, the client's insurer cut its cover limit by $100 million.
Working through what actually caused the loss, not just the climate exposure of the site itself but the vulnerability of the utilities it depended on, allowed WTW to help the client rebuild its case for cover. The limit was eventually restored in full. "We're using these insights to negotiate with insurers and lenders, and to help clients be better prepared if something happens again," she said.
Galy's own view of what gets organisations through a genuinely extreme event had less to do with modelling and more to do with culture. She pointed to Maersk's recovery from the 2017 NotPetya cyberattack, when a single computer in a branch office in Ghana, disconnected from the main network at the time, ended up being the one machine that let the company rebuild its systems. "How many companies nowadays have that kind of computer in Ghana?" she asked. "Something seemingly random, that doesn't cost much, but that could help you recover."
Both pointed to a simple, low-cost fix that's rarely used: asking employees. Galy referenced WTW's Emerging and Interconnected Risks Survey, which found that 40% of wider employees at the firms surveyed had never been asked to feed into their organisation's emerging risk process, despite often sitting closest to clients, markets and supply chains. Calavia Garsaball recalled running a flood workshop for a large UK defence and aerospace client that did exactly that, walking staff through which sites were most exposed and what they'd actually do if water started rising. "It would be great to see the same with all clients," she said. "It's free, and it's internal education."
For UK insurers and brokers, the sharpest edge of this El Niño may turn out to be flood rather than wind. A wetter autumn arrives at a moment when UK flood exposure is already a live financial stability question, not just an underwriting one.
The Environment Agency's National Flood Risk Assessment puts around 6.3 million properties in England in areas at risk from rivers, the sea or surface water, a figure researchers expect could climb toward 8 million, or roughly one home in four, by the middle of the century. Flood Re, the reinsurance scheme that has kept cover affordable for high-risk homes built before 2009, is due to be wound down in 2039. A report published earlier this year by Public First for the UK Sustainable Investment and Finance Association estimated that around 430,000 mortgaged households in England, roughly the population of Birmingham, could become effectively unsellable or unmortgageable "climate mortgage prisoners" by 2050 without further action.
Galy, who sits as a commissioner on the National Preparedness Commission, told Insurance Business in an April interview that she was working on a forthcoming Commission report looking at flood as a wider financial system risk, not purely an insurance one. The report was still in progress at the time, with findings yet to be published. What she could say already: lenders were already declining mortgages in some areas because of uncertainty over what happens to insurance after 2039, so the impact is being felt well beyond the insurance sector, years before the scheme actually expires. Insurance Business will follow up once the Commission's report is published.
Flood risk in the UK isn't purely a climate story, either. Housing delivery targets mean developers can build without being required to check for flood risk beforehand, and even developments that avoid a floodplain directly can displace surface water onto neighbouring land that has never flooded before, turning new-build estates into a source of flood risk for the streets around them rather than simply a target for it.
Every El Niño plays out differently, and the Met Office is careful to caveat its own forecasts, so this isn't a call to panic about a single autumn's weather. It is, though, a strong enough signal, arriving in a flood-exposed property market already under financial strain, with models that both WTW experts say still struggle to capture how one loss triggers the next, to justify insurers, brokers and lenders stress-testing their own assumptions before the wet weather arrives rather than after.
In practice, that means building test cases more extreme than the standard "realistic disaster scenarios" already used across the market, tailored to each organisation's own exposures, and actually rehearsing them with staff rather than leaving them in a document nobody outside the risk team ever reads.
