The World Meteorological Organization says the current El Niño is intensifying faster, and further, than its earlier forecasts suggested. UN secretary-general António Guterres has described the situation as a danger zone of extreme weather. For insurers, it's a redistribution of catastrophe risk across almost every peril and geography a diversified book touches - not a one-off weather story.
El Niño is a natural warming of the central and eastern Pacific that reshuffles rainfall and storm patterns worldwide, typically recurring every two to seven years. This one has moved fast. The WMO's June briefing put an 80-90% probability on El Niño conditions emerging through the summer. By August, NOAA's Climate Prediction Center was putting a 69% probability on the October-December reading exceeding every El Niño in its record back to 1950. The chart below shows the anomaly's climb through the year and where forecasters expect it to peak.
UK insurers paid out a record £6.1 billion in property claims in 2025 - the highest total since the Association of British Insurers started collecting the data in 2017. Weather-driven claims rose 14% year-on-year, and the average flood payout jumped 60% to £30,000. Chris Bose, the ABI's director of general insurance policy, pointed to "the toll that increasingly severe weather is taking on homes and businesses," and premiums fell over the same period. Deloitte has forecast a combined ratio of 102.1% for UK home insurers in 2026 - meaning the sector is already on course to pay out more than it collects, before this event has even peaked.
Subsidence is the domestic thread most directly tied to El Niño. The pattern tends to bring hotter, drier UK summers, and the market has already been through three subsidence "surge" years since 2018. Steven Coxon, head of subsidence at Claims Consortium Group, said conditions at the start of 2026 were tracking closely with the last surge: "Since 2018 we have had three surge events (2018, 2022 and 2025)," he said, adding that current data pointed to the potential for another this year.
Swiss Re Institute put worldwide insured natural catastrophe losses at around $42 billion for the first half of 2026, well below the long-run trend, with no single event topping $5 billion in insured losses. That's largely an Atlantic hurricane effect: El Niño tends to suppress storm formation in the Gulf of Mexico while lifting activity in the Pacific basin.
Brokers aren't reading much comfort into the quiet numbers. Lockton's analysts describe a strong El Niño less as a discrete weather event than as a global risk-redistribution mechanism - it doesn't create new losses so much as move them unevenly between regions, perils and lines of business, flood, drought and agriculture among them. Guy Carpenter's advisory team has made a similar point about hurricane risk: a quieter season on paper says nothing about the size of the one storm that does make landfall.
Global coverage of this El Niño has focused heavily on the Panama Canal, and for good reason from a marine and supply-chain perspective. The Panama Canal Authority reversed an earlier pledge not to restrict traffic this year, confirming in late August that daily transits would be capped at 34 vessels from 4 September, cut further to 32 from 15 September, down from an average of roughly 35 crossings a day. Rainfall through the watershed has run around a third below the historical average this year, with inflows to the reservoir system down more than 40%.
Around 5% of global maritime trade moves through the canal. For UK cargo, marine and business-interruption underwriters with exposure to transpacific or transatlantic supply chains, congestion, rerouting and delay claims tend to cluster exactly where drought-driven restrictions bite hardest. Standard catastrophe models were built to price direct property damage, not this kind of disruption moving through interconnected supply chains - a gap WTW's climate practice has flagged publicly this year.
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