El Niño arrives: what US property brokers should tell clients now

The arrival of El Niño conditions, confirmed by NOAA to likely persist through 2026, is creating a significant protection gap in the U.S. property insurance market as private flood premiums decline. While the weather pattern may suppress Atlantic hurricane activity, it simultaneously increases flood and storm surge risks for the West Coast and Southwest. For property brokers, this shift necessitates urgent client conversations regarding coverage adequacy, particularly as primary carriers and reinsurers maintain strict underwriting discipline despite seasonal forecasts.

According to NAIC data, private flood direct premiums written dropped from $803 million in 2023 to $730 million in 2024, a trend that conflicts with the heightened flood exposure brought by El Niño. NOAA Administrator Neil Jacobs reports a 98% probability of El Niño being present this summer, with an 80% chance of it reaching moderate strength. This pattern significantly impacts regional risk profiles: California faces elevated exposure from atmospheric rivers, particularly in southern regions, while Arizona is likely to see a wetter winter. Conversely, while El Niño can suppress hail and tornado activity in Texas and Oklahoma, experts warn that these risks are not eliminated.

The influence of El Niño typically reduces Atlantic hurricane formation through increased vertical wind shear, leading NOAA to project a 55% probability of a below-normal Atlantic season. However, the eastern Pacific faces a 70% chance of an above-normal season, increasing exposure for the West Coast and Hawaii. Despite the potential for a quieter Atlantic, industry leaders like Danny Stock of Allianz Commercial emphasize that climate change continues to drive storm intensity. Stock pointed to Hurricane Melissa in 2025, which intensified to a Category 5 in just 39 hours and resulted in economic losses between $6 billion and $7 billion, as evidence that individual events can still cause catastrophic damage regardless of overall storm counts.

The property insurance sector continues to face tightening conditions as reinsurers push for higher attachment points and risk-adequate pricing. Primary carriers are maintaining firm stances on wind and named-storm deductibles in high-hazard coastal zones, leaving brokers with a smaller capacity buffer than seasonal headlines might suggest. Steve Bennett of Mercury Insurance notes that while El Niño influences probabilities, it is only one component of a complex weather puzzle. With Insurance Information Institute data showing that only 78% of homeowners who acknowledge flood risk actually carry insurance, brokers are encouraged to use the current El Niño signal as a catalyst for closing the coverage gap before seasonal risks materialize.