June 8th, 2012

June 1 Renewal: Reduced Hurricane Activity Expected in 2012

Posted at 1:00 AM ET

mowery_lara_141flandro_david1David Flandro, Global Head of Business Intelligence and Lara Mowery, Head of Global Property Specialty
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Despite the early start to the 2012 hurricane season with the formation of tropical storms Alberto and Beryl in May, the forthcoming season is expected to see reduced activity overall. AccuWeather, the Colorado State University (CSU), National Oceanic and Atmospheric Administration (NOAA) and Weather Services International (WSI) have all released their pre-season hurricane forecasts and the general consensus is that 2012 will see significantly less activity than 2010 and 2011. The most recent forecasts are outlined in Table 1 below.

Table 1

summary-of-hurricane-forecasts-table721

Meteorologists expect key atmospheric and oceanic patterns, particularly the El Niño Southern Oscillation and cool sea surface temperatures (SSTs) in the tropical Atlantic, to hinder tropical cyclone development this year. An El Niño pattern, characterized by above-normal water temperatures in the central and eastern equatorial Pacific Ocean, is expected to develop during the summer. El Niño is often associated with diminished development of tropical cyclones in the Atlantic due to increased wind shear and a large-scale sinking motion that inhibits thunderstorm activity.

Another reason the 2012 Atlantic hurricane season could see below-average activity is due to cooler SSTs. Warm ocean waters fuel hurricanes, and SSTs are currently below-normal in the main development region, an area where over 80 percent of major hurricanes develop in the Atlantic basin. Moreover, they are predicted to remain cooler than recent years through the 2012 season.

This nevertheless does not mean (re)insurers can rest easy. Despite forecasts for subdued activity and a reduced risk of hurricane landfalls overall (1), meteorologists warn the United States and/or the Caribbean could still see some tropical activity this year. Indeed, predicted steering patterns through the heart of the 2012 season suggest the western Caribbean and Gulf of Mexico region in particular could be vulnerable to landfalling storms and/or hurricanes. Furthermore, as a majority of reinsured losses since 2009 have been seismically as opposed to meteorologically-driven, it bears remembering the old axiom that it is always earthquake season.

Note:

1 The CSU said that the chances of at least one major hurricane making landfall in the United States in 2011 is 48 percent, lower than the long-term average of 52 percent.

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