El Niño arrived in 2023 and climate scientists are predicting that it could weaken in Spring 2024. No matter what happens, it will remain a significant weather risk factor for the first part of 2024. This means you should be prepared for and be ready to respond to potential El Niño-driven weather challenges, such as extreme storms, extended periods of drought, and unusual meteorological events that could increase flood risk.
El Niño is a natural climate phenomenon characterized by the unusual warming of surface waters in the eastern Pacific Ocean. It affects ocean temperatures and weather patterns from North America, to South America, to Australia. It occurs every two to seven years and is the “warm phase” of the El Niño-Southern Oscillation (ENSO), with La Niña being its "cool phase."
Under normal conditions, strong trade winds push warm surface water westward across the tropical Pacific, resulting in an upwelling of cold water along the coasts of South America. However, during El Niño events, these trade winds weaken, allowing warm surface waters to move eastward, which disrupts the upwelling. This can lead to significant impacts on coastal ecosystems and fisheries, with potentially devastating economic consequences.
El Niño’s effects on the global climate are far-reaching, creating teleconnections — large-scale, long-lasting, interrelated climate anomalies — that influence weather patterns worldwide. Strong El Niño events can cause increased precipitation in some regions and droughts in others, affecting water supplies, agriculture and farmers, food processors, manufacturers, and retailers.
Such disruptions of global atmospheric circulation and water temperatures may lead to unusual winter weather in some regions and stronger storms in others.
These extreme conditions can increase the risk and intensity of wildfires, providing drier and more easily ignited grass and brush material, and sparks and flames that spread more rapidly, as recently seen in the tragic Maui wildfire. And this can further raise the risk of flooding, as charred soil acts as a barrier to water absorption.
Events exacerbated by El Niño can cause extensive property and infrastructure damage. Inaccessible roads, extended power and water outages, material and labor shortages, and other factors can lead to major supply chain, transportation, logistics, and supplier and customer business disruptions, further complicating the road to recovery.
Notable El Niño events occurred in 1982-83 and 1997-98, creating significant climatic changes across the globe and resulting in US$4.1 trillion and US$5.7 trillion in global income losses, respectively, according to climate researchers.
Business leaders and risk professionals should review and refresh their preparedness, response, and recovery plans in order to safeguard people, properties, and operations — and be ready to promptly report insurance claims in the event of losses. This includes:
Connect with your agent or broker to discuss your coverage and get a flood insurance quote if you do not have a flood insurance policy.