When the "strongest El Niño" moved from forecast to confirmed fact, another major test for the insurance industry had already begun.
According to recent information from the National Climate Center, a super El Niño event officially formed in September this year, and this El Niño event will become the strongest since systematic monitoring began.
From an industry perspective, the super El Niño is both a stress test for the claims cycle and a window for the insurance sector to shift from "paying out to backstop losses" toward "pre-disaster prevention."
At the results briefings of several listed insurers in September this year, El Niño became a frequently mentioned keyword.
For the general public, it is easy to associate it with insurance payouts when disasters strike, but more noteworthy than the payout figures is this: how can risk reduction services be pushed further forward? And how should the natural disaster protection gap be filled?
Rising claims pressure was already expected
According to recent information from the National Climate Center, a super El Niño event officially formed in September this year, of the eastern Pacific type, meaning the warm sea surface center is located in the eastern equatorial Pacific.
"Based on domestic and international dynamic climate models and statistical method projections, it is expected that sea surface temperatures in the central and eastern equatorial Pacific will continue to rise over the next three months, peaking in late autumn and early winter. This El Niño event will become the strongest since systematic monitoring began," the National Climate Center also noted.
For China's insurance industry, the most direct impact falls on the claims side.
As for what aspects of impact the super El Niño may bring to the insurance industry, Li Wenzhong, deputy director of the Rural Insurance Research Institute at Capital University of Economics and Business, said that, first, from a global perspective, the impact of this round of super El Niño is essentially a redistribution of risk, not a simple increase or decrease in the amount of risk.
Some research points out that it will significantly suppress Atlantic hurricane activity while systematically pushing up risk levels for strong typhoons in the western North Pacific, tornadoes in the United States, drought in Australia, and flooding in southern China across multiple regions and multiple disaster types.
Second, the most direct impact of the super El Niño on China's insurance industry is a rise in insurance claims levels.
It is worth mentioning that the El Niño event also became a hot topic at listed insurers' 2026 interim results meetings.
Zhang Daoming, vice president of PICC and president of PICC P&C, said at PICC's 2026 interim results briefing that considering this year's strong El Niño weather expectations, catastrophe losses in 2026 are expected to be greater than in 2025.
It is understood that before and after disasters, insurance lines prone to triggering claims include agricultural insurance, property insurance for enterprises, auto insurance, and engineering insurance.
The claims pressure faced by related lines deserves particular attention.
Li Wenzhong said that at the agricultural insurance level, El Niño will increase flood risks in southern China and drought risks in the north, while abnormal weather may also raise the risk of pests and diseases.
At the enterprise property insurance and auto insurance level, urban waterlogging, mudslides, and other disasters triggered by heavy rainfall directly hit enterprise property insurance and auto insurance.
At the engineering insurance level, flooding and extreme precipitation damage transportation infrastructure, power facilities, and other assets, thereby affecting the claims performance of engineering insurance.
For typhoon-related insurance lines, El Niño causes typhoons in the western North Pacific to form farther east, remain longer over warmer ocean surfaces, possibly become stronger, and show a northward shift in tracks, which will significantly increase catastrophe risk from typhoons in China's coastal areas.
How much more work does the insurance industry still have to do?
The numbers on the claims bill are the result, not the cause.
Therefore, what is more worth asking is: what can the insurance industry do before a disaster occurs?
The term risk reduction services is not a new concept.
"In recent years, property insurance companies have adapted to economic and social development trends, actively responded to the insurance needs of the real economy, and actively carried out risk reduction services such as disaster prevention and loss mitigation," pointed out the relevant person in charge of the former China Banking and Insurance Regulatory Commission.
As early as 2023, the former China Banking and Insurance Regulatory Commission issued the Opinions on Property Insurance Companies Actively Carrying Out Risk Reduction Services, requiring companies to expand service content and actively assist insured enterprises in carrying out risk reduction work such as risk assessment; broaden service scope and actively provide risk reduction services in various property insurance businesses such as liability insurance, auto insurance, and agricultural insurance; and encourage companies to enrich the forms of risk reduction services and improve service accessibility and convenience.
The policy framework is already clear, but the implementation path needs to be explored by the industry itself.
Regarding specific measures that can be taken, Li Wenzhong believes they cannot be separated from accurately identifying high-risk customers before disasters, intervening in advance, resolving risks in the bud, and controlling high-risk business at the source; promptly sending disaster warnings to customers and conducting pre-disaster inspections to effectively reduce the possibility and severity of losses; responding quickly during disasters and implementing engineering interventions to keep losses within the smallest possible scope; empowering risk reduction management with technology to improve its scientific nature and efficiency; and establishing an effective incentive and guarantee mechanism to link disaster prevention and loss mitigation expenses with claims ratio indicators through a dynamic adjustment mechanism, encouraging insurers to increase investment in long-term disaster prevention and loss mitigation measures.
Risk reduction addresses "how to lower existing risk," while the coverage issue concerns "who will backstop incremental risk."
Some data points out that natural disaster insurance coverage in the Asia-Pacific region is only about 10%, facing a huge protection gap as strong typhoon and flood risks rise.
So how can natural disaster insurance coverage be increased? Li Wenzhong believes it needs to be systematically advanced from six levels.
These include consolidating and expanding government-led inclusive natural disaster insurance coverage.
"This is currently the type of natural disaster insurance with the broadest coverage and the most direct relationship with ordinary residents," Li Wenzhong said.
In addition, this also involves greatly increasing agricultural insurance coverage; using rural housing insurance as a breakthrough to fill the largest gap in rural residents' property protection; promoting index insurance to solve the coverage bottleneck caused by traditional insurance's "difficulty in loss assessment and slow claims settlement"; continuously enriching and improving insurance products to better meet consumers' risk protection needs; and strengthening institutional and fiscal safeguards so that expanded coverage has sustainable support.
In Li Wenzhong's view, agriculture is the sector most directly affected by El Niño and also the sector with the greatest room to improve natural disaster insurance coverage.
The focus of increasing agricultural insurance coverage cannot be separated from concentrating on specialty agricultural insurance, incorporating local specialty agricultural products into the protection system to solve the problem of "industries without insurance"; and deepening the advancement of full-cost and income insurance, upgrading from "protecting costs" to "protecting income," so that farmers truly feel insurance's role in underpinning income.
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