December 22nd, 2010

2010 Catastrophe Update: Part II, Cyclones, Hurricanes, Typhoons

Posted at 1:00 AM ET

David Flandro, Global Head of Business Intelligence, and Julian Alovisi, Senior Vice President

Tropical Cyclones in 2010

For the second year running, no significant insured loss arose from global tropical cyclones. The 2010 hurricane season in the Atlantic was notable for its above-average activity and negligible impact on (re)insurers’ bottom lines, while typhoon development in the West Pacific was the lowest on record. These trends were driven by the development of a moderate La Niña event and very warm tropical Atlantic seas surface temperatures.

The El Niño Southern Oscillation (ENSO) is the most prominent year-to-year climate fluctuation on the planet. It originates in the tropical Pacific with unusually warm (El Niño) and unusually cold (La Niña) events recurring approximately every 3 to 7 years. Generally, during a La Niña event, tropical cyclone activity is increased in the Atlantic basin and reduced in the Pacific. This trend was dramatically realized in 2010.

2010 Atlantic Hurricane Season

The 2010 Atlantic hurricane season produced a total of 19 named storms, the highest number since 2005 and the joint-third highest since records began in 1851. Twelve storms became hurricanes (the joint-second highest number on record), five of which reached major hurricane status of Category 3 strength or higher.

Despite such high activity, the 2010 season was unique in that no hurricane made U.S. landfall as steering currents meant several storms curved away from the U.S. coastline (5). Only two previous seasons (1969 and 2005) have seen 12 or more hurricanes, and there were U.S. landfalling hurricanes in both these years (Hurricane Camille in 1969 and numerous storms in 2005). Indeed, the 2010 season was unprecedented in generating more than 10 hurricanes without any going on to make a U.S. landfall. Eighteen hurricanes have now developed in the Atlantic since Hurricane Ike hit Texas in 2008. None of these went on to hit the United States, easily surpassing the historical average of one in four Atlantic hurricanes striking the U.S. coastline.

Forecasters, including the Colorado State University (CSU), WSI Corporation (WSI) and the National Oceanic and Atmospheric Administration (NOAA), correctly predicted above-average activity in the Atlantic basin. As early as December, forecasters were calling for an above-average hurricane season and their predictions increased when the formation of La Niña became apparent from mid-2010 onwards (see Table 2).

Table 2

2011-cat-update-4

However most forecasters overestimated landfall rates in the United States, with some saying up to five hurricanes would strike the U.S. coastline. GC ForeCat (6), Guy Carpenter’s pre-season forecast of hurricane landfall rates in the United States, successfully predicted below-average landfalling numbers for much of the country’s coastal regions. GC ForeCat predicted the U.S. East Coast would be most exposed to a landfalling hurricane, and although no storms hit the region, Hurricane Earl did come close in early September.

2010 Typhoon Season

There was uneven activity across the tropical cyclone basins in 2010. While the Atlantic season was very busy, activity is the West Pacific was the lowest in recorded history (7). Only 15 named storms developed in the West Pacific, with eight becoming typhoons (this compares to a long-term average of 27 named storms and 17 typhoons). Typhoon Fanapi caused damage in central and southern Taiwan after hitting the island as a Category 3 storm and Typhoon Megi devastated parts of the Philippines after reaching Category 5 status. However, no significant insured losses were caused by typhoon activity in 2010 (8).

Several forecasters, including the Guy Carpenter Asia-Pacific Climate Impact Centre (GCACIC) (9), accurately predicted that tropical cyclone activity would be below average in the West Pacific in 2010. However, none predicted the season would be as quiet as it was.

Notes:

5. The Azores/Bermuda high was located further east than normal, steering storms away from the US East Coast. In addition, a high pressure over the US Gulf Coast deflected storms away from the region and into Central America.
6. GC ForeCat estimates hurricane landfall rates for four different regions along the US coastline (Gulf, Florida, Southeast and Northeast) from January through to May each year - http://www.guycarp.com/portalapp/publicsite/catdocument.pdf?instratreportid=1929.
7. The previous recorded low occurred in 1951 when 17 named storms developed.
8. Although nearly 150,000 homes were damaged or destroyed by Typhoon Megi in the Philippines, Munich Re said insured losses were restricted to around USD100 million.
9. http://www.cityu.edu.hk/gcacic/Research%20Brief_2010-04.pdf.

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