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Moody’s links 2026 El Niño to shifting catastrophe risk

Moody’s says El Niño can raise Australia bushfire risk by more than 50%, while effects vary by region and peril.

Reported · Written up by our desk · Reinsurance

Moody’s says the 2026 El Niño, the warm phase of the El Niño-Southern Oscillation, could reshape catastrophe risk for insurers and reinsurers by altering weather patterns beyond the tropical Pacific.

The risk assessment firm says changes to sea surface temperatures, trade winds and atmospheric circulation can shift regional temperatures, rainfall and storm activity, affecting insured losses in uneven ways across perils and geographies.

For insurers, Moody’s highlights that El Niño may increase risk for one peril while reducing exposure to another, potentially changing an insurer or reinsurer’s overall loss profile, portfolio accumulation and diversification.

In Australia, Moody’s says El Niño tends to increase heat and dryness, raising bushfire risk by more than 50% compared with non-El Niño years, while potentially reducing tropical conditions that drive other hazards.

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