A suppressed Atlantic hurricane season tells only part of the story as bushfire, Pacific, and Asian risks all shift.
A quiet Atlantic hurricane season is not the same as a safe one. That distinction is the focus of a new analysis from Moody's, which maps how the 2026 El Niño is simultaneously suppressing some catastrophe perils while amplifying others across multiple regions and geographies.
The 2026 El Niño event is developing at a pace that the National Oceanic and Atmospheric Administration (NOAA) and the World Meteorological Organization (WMO) have described as unusually fast. NOAA confirmed El Niño conditions in the Pacific on June 11. By early September, the event was tracking as potentially the fastest-developing on record, according to forecasters cited by Moody's. NOAA's July update placed an 81% probability on a "very strong" peak during October through December, a strength that would rank the event among the most intense since records began in 1950.
The Atlantic picture reflects what El Niño typically does - suppress tropical cyclone formation through increased wind shear. As of early October, eight named storms and zero hurricanes had formed in the North Atlantic. Forecasters expect continued suppression through the end of the season. But Moody's analysis is direct about what that suppression does and does not mean.
Hurricane Ida, which struck during the 2021 season, produced insured losses exceeding $30 billion. Hurricane Ian generated more than $53 billion in insured losses in 2022, a year of otherwise average Atlantic activity. Both figures come from Moody's RMS event response data. The broader implication is that aggregate season count tells risk managers relatively little about annual loss outcomes. A single landfalling storm can reset the year.
That asymmetry matters more when Atlantic sea surface temperatures are unusually warm, as they are now. The limited cooling effect from a low-activity season means any storm that does form will encounter favorable intensification conditions. Rapid intensification, defined by NOAA's National Hurricane Center as an increase in maximum sustained winds of at least 35 miles per hour within 24 hours, becomes more likely when sea surface temperatures are warm and prior storm activity has not cooled the water.
While the Atlantic has stayed quiet, the Eastern and Central North Pacific has recorded ten hurricanes and 20 named storms, including three Category 5 storms. Hawaii was struck by Hurricanes Lala and Lowell, both causing wind, storm surge, and rainfall-related flooding across the islands. The seasonal picture across US Pacific territories and Pacific Rim assets looks markedly different from the Atlantic.
Australia presents its own complexity. The continent is experiencing its wettest El Niño year on record, which runs counter to the typical El Niño pattern of drying and heat. Moody's notes that this anomaly does not necessarily reduce longer-term risk. Past El Niño events show that the swing from a very wet period to a very dry one can amplify bushfire conditions significantly. A wet growing season increases the volume of available fuel.
When dry, hot conditions follow, that fuel load raises the risk of a major bushfire outbreak. Moody's models indicate El Niño raises Australian bushfire risk by more than 50% compared with non-El Niño years. Australia's National Emergency Management Agency (NEMA) is already warning residents to prepare for a hotter, drier summer.
In Asia, El Niño has contributed to a drier-than-normal monsoon season across much of the region. The relationship between El Niño and typhoon intensity in the Western North Pacific remains uncertain, according to Moody's, but the same circulation shifts that affect monsoon timing also influence where typhoons form and track.
The harder modeling challenge is not assessing any single peril in isolation. El Niño shifts multiple perils in the same simulation year. In Australia, the circulation patterns that increase bushfire risk also tend to reduce tropical cyclone risk, steering systems away from the continent. A model that captures one without the other misrepresents the net portfolio exposure.
Gallagher Re's H1 2026 Natural Catastrophe and Climate Report puts global insured losses from natural catastrophes at $46 billion for the first six months of the year, 28% below the 10-year average and the lowest first-half total since 2018.
Five consecutive quarters have passed without a single insured catastrophe event exceeding $10 billion. That benign period has supported reinsurance capital accumulation and contributed to a 16% decline in property catastrophe rate-on-line at the July 2026 midyear renewals.
Gallagher Re's Steve Bowen noted in the H1 report that El Niño shifts catastrophe risk rather than eliminating it. The aggregate loss tally for the year remains unwritten until an event occurs. The risk map is shifting in real time, across perils and geographies, driven by a single climate phenomenon that is still strengthening.
