Global warming is reshaping the El Niño equation

The established relationship between El Niño, La Niña and Atlantic hurricane activity may be changing as global temperatures rise, introducing new complexities into the climate signals used to assess catastrophe risk.

According to Peter Dailey, head of research at Aeolus Services Corp, scientists are finding that the interaction between global warming and Pacific Ocean temperature patterns is more complicated than previously understood.

“Observations and modelling studies are showing that yes, the relationship between El Niño–Southern Oscillation (ENSO) and Atlantic hurricane risk may be changing,” he told Bermuda:Re+ILS in the context of ILS Bermuda Convergence, held October 12-14.

“While some might guess that our warming climate will naturally bring on more El Niño events and reduced hurricane risk, the research is revealing a much more complex picture.”

During El Niño, warmer Pacific waters contribute to increased wind shear over the tropical Atlantic, disrupting hurricane development. La Niña generally produces more favourable conditions for Atlantic hurricane formation.

Dailey explains that this connection, known as a teleconnection, has been understood for decades, with research published by meteorologist Dr William Gray in 1984 establishing how Pacific temperature changes influence upper-level Atlantic winds.

But climate change is adding another dimension: “Because global warming affects the Pacific differently than El Niño, the two combined produce what’s called ‘patterned warming' with local hot spots and variations that can dramatically change the pattern of Atlantic wind shear.”

That growing complexity is driving interest in new forecasting tools. “Here is where AI can help – since AI models are fundamentally powered by pattern recognition, pattern-based forecasting of climate cycles like ENSO is becoming an emerging area of research,” he said.

“By combining big data from modern observing networks with state-of-the-art weather models, we're learning more about how El Niño affects not only hurricane risk, but also how it can have profound impacts on the weather globally.”

For the ILS market, the relevance extends beyond improving seasonal predictions. A better understanding of how ENSO interacts with a warming climate could help refine assessments of hurricane risk and inform decisions about risk selection, portfolio construction and hedging.

Dailey cautions, however, that even increasingly sophisticated seasonal forecasts cannot reliably predict the precise number, intensity or landfall locations of hurricanes.

The challenge is therefore to translate advances in climate science into better-informed assessments of risk while recognising the uncertainty that remains.

As Dailey puts it, the objective is to “benefit from the best science and the best models”, while acknowledging the inherent volatility of every hurricane season.

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