With the Atlantic hurricane season set to begin on June 1, NOAA's first outlook for 2026 pointed to a below-normal year -- yet the message for insurers and reinsurers is to stay firmly on guard.
NOAA's forecasters see a 55% chance of a below-normal Atlantic season, a 35% chance of a near-normal one and only a 10% chance of above-normal activity. They expect 8 to 14 named storms, of which 3 to 6 could become hurricanes, including up to three major hurricanes of Category 3 of higher.
That compares with a long‑term average of around 14 named storms, seven hurricanes and three major hurricanes.
It is the first time since 2015 that NOAA has issued a below‑normal seasonal forecast – that year still produced 12 named storms. By contrast, the 2025 season generated 13 named storms, five hurricanes and four major hurricanes, three of which reached Category 5 strength, demonstrating how a basin that looks “near average” on paper can still deliver extreme loss events.
The outlook is driven largely by the expected arrival of El Niño in the equatorial Pacific. El Niño usually increases wind shear over the tropical Atlantic, disrupting storm formation and suppressing overall activity. At the same time, sea surface temperatures in the Atlantic and Gulf are running warmer than average, even if they are below the record levels seen in 2023 and 2024 that helped storms intensify despite El Niño.
From an insurance perspective, the key point is that a below‑normal storm count does not translate into a below‑normal loss year. A single major landfall in a heavily exposed region can still generate tens of billions of dollars in insured losses and strain already fragile coastal markets.
Most global and regional forecasts – including those from Colorado State University – broadly agree on slightly reduced activity, but none can say where storms will track or how many will make landfall. Seasonal outlooks are therefore unlikely to drive any immediate softening in catastrophe pricing or a material shift in how capacity is deployed.
The forecast comes after several seasons that have reshaped property and reinsurance markets.
US coastal property pricing has risen sharply, with higher wind deductibles, tighter sub‑limits and more restrictive terms in wind‑exposed postcodes. Reinsurers have pushed for higher attachment points and more risk‑adequate pricing, particularly at lower layers that absorb frequent secondary‑peril and smaller wind losses. State‑backed carriers of last resort, especially in states such as Florida and Louisiana, have seen rapid growth as private capacity has retreated, prompting regulatory and political pressure to stabilise markets.
In that context, 2026 is more likely to be treated as a consolidation year than an opportunity to relax discipline. A quieter landfall season, if it materialises, would help carriers rebuild surplus and could support more stable renewals into 2027, but reinsurers will want to see actual loss experience – not just seasonal guidance – before making significant concessions on rate or terms.
For primary carriers, there is little appetite to reverse recent underwriting changes. Many will look to maintain or strengthen wind and named‑storm deductibles in high‑hazard coastal zones, continue close scrutiny of roof age and vulnerability, secondary modifiers and flood exposure, and ensure sums insured reflect higher rebuild costs after the construction inflation of recent years. Even in a below‑normal season, a cluster of mid‑sized events, inland‑flood catastrophes or rapid‑intensification landfalls could still produce challenging aggregate losses.
The outlook provides a useful talking point with clients, but not a reason to dilute risk messaging. Many commercial and personal‑lines policyholders will see headlines about a “quieter” year and be tempted to defer mitigation or coverage reviews. The coming weeks are a critical window to steer them the other way.
Advisers have an opportunity to encourage households and SMEs to verify that limits and deductibles are appropriate, and to confirm that any flood cover – whether via the National Flood Insurance Program or private markets – is in place and properly integrated with property programmes. For commercial and high‑net‑worth accounts, there is renewed focus on roof reinforcements, shutters, elevation of critical equipment and continuity planning to reduce both physical‑damage and business‑interruption exposures. Clarity around claims handling and catastrophe‑response arrangements, including temporary accommodation and BI triggers, will also be crucial if a major event occurs.
At portfolio level, the forecast underscores the growing importance of secondary perils and “non‑headline” events. Even weak or short‑lived systems can generate severe flooding, storm surge and tornado outbreaks far inland, driving attritional and medium‑sized claims that accumulate across large books. That reality is shaping how carriers calibrate aggregates, manage accumulation hotspots and purchase reinsurance and retrocession protection.
NOAA’s below‑normal forecast is as favorable a starting point as the market could reasonably hope for after recent seasons. But for insurers, reinsurers and intermediaries, it should be read as breathing space to strengthen portfolios and client preparedness – not as an all‑clear.
In a climate where ocean temperatures are trending higher and the most intense hurricanes are becoming more damaging, the industry’s working assumption remains unchanged: it still only takes one well‑placed storm to turn a “quiet” season into a very active one for loss ratios.
