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El Niño may mean fewer storms, but insurers fear bigger losses
Insurers are shifting from storm counts to landfall location and insured property values after coastal exposure and reconstruction costs have surged over the past decade.
El Niño has often been associated with a quieter Atlantic hurricane season, but Insurance Journal reports that the change may be less beneficial for insurers now because coastal development and property values have grown sharply. U.S. government scientists said El Niño arrived in June, the same month the Atlantic hurricane season began. They expect a below average 2026 season with eight to 14 named storms and one to three major hurricanes, which historically would imply lower catastrophe risk for property insurers. Still, insurers and industry analysts say “quiet” seasons can produce severe losses because the amount at risk is much larger than it was in prior decades. The outlet cites federal data showing coastal counties’ population rose by more than 40 million since 1970, while home values and reconstruction costs have climbed by more than 70% and 60%, respectively, over the past decade. As a result, insurers are rethinking catastrophe models and pricing, focusing less on how many storms occur and more on where hurricanes make landfall and the value of property in their path. Insurance Journal also notes that insurers have faced average insured losses of about $30 billion per season from 2016 to 2024, and it quotes Guy Carpenter advisory leader Kimberly Roberts saying a single landfalling hurricane could trigger an insured loss magnitude insurers have not seen before, even in an El Niño year.