Australia issues El Nino weather warning

Australia’s weather bureau has issued a stark climate warning, suggesting that the chances of an El Nino weather event remain likely in coming weeks.

Such an event could bring hotter, drier weather, which should be of especial concern for (re)insurers as such extreme climate conditions raise the risk of wildfires and associated claims.

Indeed, the Australian bushfires of 2019-2020 affected 80% of Australians and led to some $110 billion in economic losses.

El Nino, characterised by elevated sea surface temperatures in the eastern and central Pacific Ocean, is associated with extreme weather phenomena, from tropical cyclones to intense rainfall and prolonged droughts.

The World Meteorological Organization (WMO) said last month the weather pattern had emerged in the tropical Pacific for the first time in seven years.

Australia’s Bureau of Meteorology (BOM) said in a release it was maintaining a weather alert that it said implied a 70% chance of the phenomenon occurring.

“When El Nino Alert criteria have been met in the past, an El Nino event has developed around 70% of the time,” it said.

El Nino typically suppresses rain in eastern Australia, which poses a risk to the region’s wheat crop.

According to the Insurance Council of Australia (ICA), recent research shows that extreme weather events over the 12 month period from November 2021- November 2022 cost every Australian household an average of $1,532.

Commissioned from leading think tank the McKell Institute by the ICA, The Cost of Extreme Weather also suggested that over the last 10 years the average annual household cost of extreme weather has been $888, but that this figure is expected to jump to more than $2,500 a year by 2050.