August was the joint-hottest month ever recorded globally, equalling July 2023, according to the EU's Copernicus Climate Change Service. Temperatures sat 1.65C above pre-industrial levels, exceeding the threshold countries agreed to avoid. The Met Office found Britain's record-breaking summer was made around 130 times more likely by human-caused climate change, the BBC reported.
The El Niño pattern building in the Pacific is expected to push global temperatures higher over the coming year. Copernicus described it as still strengthening and potentially one of the most powerful on record. Munich Re warned of a "dangerous mix" as warming and a super El Niño converge, with effects expected in the second half of the year.
UK farmers are already absorbing the damage. The Energy and Climate Intelligence Unit (ECIU) estimates revenue losses of between £293 million and £390 million from this year's harvest alone. Wheat, barley, and oat yields are all forecast below the ten-year average.
Three consecutive poor harvests since 2024 have cost UK arable farmers an estimated £4.8 billion in lost revenue adjusted for inflation, the ECIU found. Much of that exposure sits outside the insurance market. A European Investment Bank and European Commission study put average annual EU agricultural losses from extreme weather at around €28 billion.
Around 80% of that is borne directly by farmers. Against that backdrop, agricultural insurance is entering a period of structural change as farm risks become harder to define.
Debbie Airey, area managing director at Brown & Brown UK, said farming clients have already changed how they think about risk. "Periods of prolonged heat and drought are no longer unusual events and can affect everything from crop yields and livestock welfare to cash flow and long-term business planning," she said. "From an insurance perspective, we are seeing increasing interest in resilience rather than simply protection."
Farmers are reviewing coverage alongside diversification, business continuity planning, and risk mitigation. "While insurance cannot prevent extreme weather, it plays an important role in helping farming businesses recover, adapt, and continue operating during periods of uncertainty," Airey said. "As climate volatility becomes a more prominent feature of the agricultural landscape, resilience will remain a key focus for the sector."
Brokers advising farming clients face compound risk scenarios where drought and flooding can occur within the same growing season. When successive poor harvests have already weakened farm finances, a further weather event in the same policy period leaves less capacity to absorb the loss. Business interruption can cascade across an entire operation, rather than just a single crop.
Crawford has warned that a super El Niño could trigger longer-tail losses and increased claims costs across UK agricultural portfolios, with compound weather events complicating loss assessment and settlement. Some farmers are turning to parametric products in response, where payouts are triggered by pre-agreed weather indices rather than assessed losses. As drought years accumulate, the historical data underpinning those products shifts and premiums can rise, so product design adjustments are becoming part of agricultural risk conversations alongside coverage reviews.
