We are approaching the 2026 hurricane season and there is increasing confidence in a strong El Niño. In fact there is a potential for one of, if not the strongest, El Niño on record. This is of particular importance to ILS investors.

El Niño (the warm phase of the El Niño–Southern Oscillation, a recurring, irregular climate pattern of tropical Pacific Ocean temperatures) exerts a strong influence on weather across the global tropics. In the Atlantic, El Niño suppresses storm activity through stronger upper-level westerly winds (i.e. increased vertical wind shear) as well as generally increased atmospheric stability.

While pre-season forecasts for the Atlantic hurricane season are typically viewed with scepticism, and most respected seasonal forecasters advise caution in over-interpreting early outlooks, multiple recent forecasts are now suggesting increasing confidence in below-average, and in some cases significantly below-average, activity during the 2026 season.

None of which precludes the possibility of a severe, impactful storm this season. Hurricane Andrew, often cited as “the exception that proves the rule” for El Niño’s influence on hurricane risk, actually occurred during a waning period following a strong wintertime El Niño. Hurricane Betsy in 1965 (the only storm to reach major hurricane strength during that season) is a better cautionary example. The 1965 hurricane season was driven by a strong El Niño developing from a winter La Niña, just as expected for 2026. Betsy’s impacts in Louisiana set the record 60 years ago as the first hurricane to exceed a billion dollars in damages. A repeat of Betsy today would likely be in the range of $50+ billion in insured losses.

Robust quantification of how climate factors, such as El Niño, as well as global and local ocean temperatures, change the risk profile of a well-constructed, geographically diversified portfolio of ILS has been a key focus of Twelve Securis’ research for multiple years, and our toolbox continues to evolve. Major vendor model updates being released later in 2026 will, for the first time, include explicit representation of the state of the climate within their models; collaboration with leading academics provides insights into the state of the science; and long-standing relationships with climate-connected risk modellers provide us with an established framework.

Twelve Securis’ view of the upcoming season remains cautious, but optimistic about El Niño’s positive influence on risk.

The plot above shows historic hurricane seasons from 1950 – 2025 plotted in terms of two sea surface temperature (SST) metrics averaged over the peak August to October period, as well as an ensemble forecast of the indices from the European Centre for Medium Range Weather Forecasts (ECMWF), released earlier this month. The x-axis represents the Main Development Region (MDR) SST anomaly relative to the 1991-2020 baseline, and the y-axis represents the Relative Oceanic Niño Index (RONI). The size and colour of the markers represent the total basin counts and US landfalls respectively.

The warmer the MDR, the more fuel is available to sustain hurricanes. The RONI index captures the state of ENSO, with RONI values ≥ 0.5° considered as El Niño, and ≤-0.5° considered as La Niña. Historic experience is that the most active seasons tend to lie in the lower half of the plot, i.e. La Niña-like conditions, and/or in the right half of the plot, i.e. warmer than average Atlantic SSTs. Hyperactive seasons such as 2005 and 2020 lie in the lower right quadrant. The forecast is relatively widely spread at this lead time and will tighten as the peak of the season approaches, but the median forecast is for a season with a strong El Niño and moderately warm MDR.

Source: Twelve Securis using data from European Center for Medium Range Weather Forecasting (ECMWF) and National Hurricane Center (NHC). As at 21 April 2026.

We will continue to monitor both public forecasts and proprietary insights from research partners and will keep clients informed accordingly.