Batten Down the Hatches

Hurricane season is here, and forecasts point to an active one

June 04, 2024 Photo

The 2024 Atlantic hurricane season is upon us, and, judging by the predictions, it is shaping up to be an active one. Multiple forecasters have said conditions appear optimal for elevated, and potentially record-breaking, activity. AccuWeather weighed in with a report and a forecast calling for 20 to 25 named storms in 2024, with eight to 12 forecast to strengthen into hurricanes and four to six potentially directly impacting the U.S. The report indicated that 2024 could break a record of 30 named storms in one season.

Meanwhile, researchers at Colorado State University (CSU) predict 23 named storms during the Atlantic hurricane season, with 11 forecast to become hurricanes and five reaching major hurricane strength (Category 3 and higher). The CSU team predicts that 2024 hurricane activity “will be about 170% of the average season from 1991–2020.” By comparison, 2023’s hurricane activity was about 120% of the average season. The report suggests a 62% probability of major hurricanes making landfall “for the entire U.S. coastline (average from 1880- 2020 is 43%); 34% for the U.S. East Coast, including the Florida peninsula (average from 1880-2020 is 21%); 42% for the Gulf Coast from the Florida panhandle westward to Brownsville (average from 1880-2020 is 27%); and 66% for the Caribbean (average from 1880-2020 is 47%).”

According to lead hurricane forecaster at AccuWeather, Alex DaSilva, the four driving forces contributing to the forecast are rising ocean temperatures in the Atlantic; waters near the equator of the eastern Pacific changing from an El Niño pattern to a La Niña pattern by mid or late summer; a stronger African easterly jet stream, and the strength, pressure, and orientation of the Bermuda[1]Azores High pressure area.

The CSU report, describing the conditions that create an environment conducive to hurricanes, states, “A very warm Atlantic favors an above-average season, since a hurricane’s fuel source is warm ocean water. In addition, a warm Atlantic leads to lower atmospheric pressure and a more unstable atmosphere. Both conditions favor hurricanes.”

CSU adds, “Given the combined hurricane-favorable signals of an extremely warm Atlantic and a likely developing La Niña, the forecast team has higher-than-normal confidence for an April outlook that the 2024 Atlantic hurricane season will be very active. This is the highest prediction for hurricanes that CSU has ever issued with their April outlook…however, the team stresses that the April outlook historically has the lowest level of skill of CSU’s operational seasonal hurricane forecasts, given the considerable changes that can occur in the atmosphere-ocean between April and the peak of the Atlantic hurricane season from August to October.”

Is the Industry Ready?

Commenting on the expected active hurricane season, Mark Friedlander, director of corporate communications with Institutes affiliate Triple-I, says, “History has proven states along the Gulf and East coasts face the prospect of catastrophic, hurricane-caused property damage. With more Americans living in harm’s way than ever before, it is critical for everyone residing in a hurricane[1]prone community to make preparedness a priority for the 2024 season.”

Given that there are states that are particularly at risk during an active hurricane season, Friedlander was asked about how prepared the insurance markets are in those states. He says, “Insurers act as financial first responders to catastrophes and are well capitalized to deliver on their promise to customers who suffer a loss during this hurricane season throughout all at-risk states. Florida’s market continues to show signs of improvement following significant legislative reform and is in a much stronger financial position compared to prior years.”

Friedlander adds, “The property and casualty industry continues to stress a predict and prevent approach to catastrophes. In most hurricane-prone states, policyholders can earn premium discounts for home hardening. This may include fortifying their roof, upgrading their exterior windows, garage door and other exterior doors, or just installing storm shutters. Preventing losses benefits insurers and their customers.”

A Specialist’s View

CLM fellow David J. Dybdahl, CEO of ARMR Specialty Holdings, spoke about this year’s forecast, the increased risks from a changing climate in general, and how prepared the industry is to meet the challenges, stating, “There will be more severe weather because of global warming leading to hotter hots, colder colds, wetter wets, and drier dries. From all indications, there will be ever increasingly severe weather events for the next century, and the recovery efforts from severe weather will be paid for through the private insurance mechanism. As long as insurance rates are allowed to free float to adapt to the increasing loss levels of property insurance due to more severe weather, the insurance business has a very positive outlook for profitable growth.”

Dybdahl continues, “The problem for insurance companies today is insurance commissioners approve insurance rates, [and] insurance rates are a political hot potato. Insurance rate regulation protocols look to past losses to predict the losses of the future. Looking at past losses to predict the expected losses in the future has proven to be incapable of adjusting to the unprecedented fast changes in the climate. As a result, regulated insurance rates for property insurance have been inadequate to cover the losses.

“In the past two years there have been unprecedented poor results produced by the insurance companies that write rate regulated homeowners’ coverage. State Farm, the largest insurance [company], recently had its credit ratings downgraded due to poor loss results and is nonrenewing 70,000 homeowners’ policies in California to avoid wildfire risks. Florida has even more pronounced problems with windstorm risks.

“The root cause [behind the insurance availability crisis in places like Florida and California] is Earth is getting warmer; it is not getting colder, and it is not staying the same. The observations of overall warming are from thermometers; thermometers are always objectively accurate and are not affected by politics.”

About The Authors
Multiple Contributors
Phil Gusman

Phil Gusman is CLM's director of content.

Angela Sabarese

Angela Sabarese, Associate Editor of CLM.

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CLM’s Property Committee provides education relevant topics, practical skills, and innovative strategies for handling property claims and litigation related to coverage and insurance claims for CLM’s members and fellows.

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