“The insurance industry can help people and businesses to absorb climate blows, but only if pricing adequately reflects the escalating risks of stronger, more destructive hurricanes in a warming world. Investing in sophisticated catastrophe modelling and research will be increasingly important if the industry is to properly understand and prudently price risks.”Simon Morgan, Head of Property at MS Amlin
LONDON:
The upcoming 2024 Atlantic hurricane season could be one of the most active on record, according to a new consensus forecast from specialist Lloyd’s of London insurer MS Amlin.
The analysis, which combines over 20 separate forecasts, projects a “substantially above average” number of storms forming between June and November.
The consensus points to an average of 23 named storms, 11 hurricanes and 5 major hurricanes.
Accumulated Cyclone Energy (ACE), a measure of overall hurricane activity reflecting the number, intensity, and duration of named storms, is forecast to hit 204 – significantly above the long-term average of 123.
Two key factors are expected result in heightened hurricane activity – the development of La Niña conditions in the Pacific, and continued abnormally warm sea surface temperature across the North Atlantic and the Gulf of Mexico.
Some of the forecasts have drawn comparisons to the hurricane seasons of 1998, 2005, and 2010 which included Hurricanes Georges, Mitch and Katrina that caused severe damage to parts of the US and Caribbean.
Dr Ed Pope, a Geoscientist in MS Amlin’s Exposure Management team, said: “Unfortunately, all the predictions point towards a potentially active hurricane season in 2024 – with some agencies forecasting record levels of activity for this stage of the year. Importantly, there has been general consensus in those forecasts for a number of months now about potential activity, despite the uncertainties associated with making forecasts early in the year. Even if we hit the low end of these forecasts we are likely to see an above-average season.
“However, it’s important to remember that predictions relate to basin activity, not landfalling hurricanes. Even if record-breaking activity is observed, this could be confined to the oceans. Local weather and steering patterns will ultimately determine storm impacts on at-risk communities – and this is often only predictable weeks, or days, in advance.”
Simon Morgan, Head of Property at MS Amlin, said: “Since 1990, hurricane-related economic losses have soared by $22 billion per decade due to population growth and increasing coastal development. We’re anticipating the frequency of the strongest Category 4 and 5 hurricanes to climb in future years, due to the changing climate.
“The insurance industry can help people and businesses to absorb climate blows, but only if pricing adequately reflects the escalating risks of stronger, more destructive hurricanes in a warming world. Investing in sophisticated catastrophe modelling and research will be increasingly important if the industry is to properly understand and prudently price risks.”
In total, climate scientists at MS Amlin analysed forecasts from 24 research groups, private companies, universities, and government agencies.
In the Pacific basin, the consensus forecast suggests a below-average season with 25 named storms, 15 typhoons and 7 intense typhoons forecast, as the La Niña pattern suppresses activity due to higher wind shear.
Beyond 2024, MS Amlin said climate change is worsening hurricane risk over the long-term. The latest climate science indicates hurricanes are likely to increase in intensity, produce heavier rainfall, and have storm surges penetrating further inland.
Pope added: “The frequency of the strongest storms, Category 4 and above, is expected to increase. Indeed, previous contentions that the overall frequency of hurricanes of all strengths might decrease are now also being challenged for a number of basins. This suggests that the overall frequency of storms may therefore also rise – leading to more cumulative losses for insurers, and a need for communities to double-down on climate adaptation measures.”
The 2023 season saw 20 named storms, 7 hurricanes and 3 major hurricanes.