TSR ups hurricane activity forecast, Accuweather warns on landfall potential

by Artemis on May 30, 2017

Tropical Storm Risk has increased its forecast for 2017 Atlantic Tropical Storm & Hurricane Season activity, joining others in predicting a more active year. Meanwhile Accuweather is warning of landfall risks for the United States coastline and early season storm potential.

Hurricane image taken from the International Space StationEarlier this year, Tropical Storm Risk (TSR), the climatological research group backed by University College London, Aon Benfield, and Crawford & Company, and other forecasters of Atlantic tropical activity were reducing their forecasts in the expectation that we would see a weak El Niño form by the time of the typical peak of the season, suggesting a slower year for activity.

The El Niño forecasts have moved somewhat and perceptions of the state of sea surface temperatures have also adjusted in recent weeks, meaning that most forecasters are increasing their predictions for 2017 hurricane activity in their latest updates.

Lower hurricane forecasts are positive for reinsurance and ILS interests, although just one major storm would be required for traditional reinsurers to suffer a major impact to their capital adequacy, while ILS and catastrophe bond investors could face significant claims.

TSR had forecast that the 2017 season would see 11 named tropical storms, 4 hurricanes and 2 major hurricanes of category 3 strength of greater.

This has now been increased to 14 tropical storms, 6 hurricanes and 3 major hurricanes, which is more aligned with the longer term averages and very close to the recent 10 year climate norm.

Professor Mark Saunders and Dr Adam Lea explained the change in forecast; “The TSR forecast has increased since early April 2017 due to the recent trend towards negative North Atlantic Oscillation conditions which favour warmer hurricane main development waters in August-September, and to the decreased likelihood that El Niño conditions will develop by August- September.”

Adding the latest TSR prediction into our tracked forecaster mix gives us an increased Artemis average forecast for the 2017 hurricane season of 12.3 named storms, 5.7 hurricanes and 2.6 major hurricanes.

The forecasters at TSR explained that the changing view of El Nino potential for 2017 means; “There is an increased likelihood for lower trade wind strength, increased vorticity and lower vertical wind shear where hurricanes form; factors which all translate into increased hurricane activity.

However, they warn that both factors, El Nino and warmer sea surface temperatures, contain significant uncertainty, particularly; “Whether El Niño conditions will develop and how warm the tropical North Atlantic will be in August-September.”

Further, TSR’s forecast update calls for 3 tropical storms and 1 hurricane to make landfall somewhere on the U.S. coastline, with a 40% chance that accumulated cyclone energy (ACE) will be above average for the United States during the season.

Forecasting landfalls remains very difficult and imprecise, but this is the factor that worries reinsurance, insurance linked securities (ILS) and catastrophe bond interests the most, as activity is not a threat alone, but landfalls are.

In fact, forecaster Accuweather warns of specific threats to southeastern areas of the U.S., including to Florida.

“The Gulf of Mexico coast, especially central and eastern areas including all of Florida, will be the greatest areas of concern for direct and indirect impacts from tropical storms and hurricanes during the 2017 season,” commented AccuWeather hurricane forecaster Dan Kottlowski.

“A secondary area of concern may be from Cape Hatteras, North Carolina, on south,”he continued.

2017 Atlantic hurricane tracks

Accuweather believes that “parts of the southeastern United States are likely to be at risk for multiple major impacts” during the 2017 storm season.

The forecasters believe that a strong area of high pressure over the west-central Atlantic could drive hurricanes and tropical storms further west, which could result in them moving over very warm Gulf of Mexico waters.

They also said that “A slow onset of El Niño is a factor that would likely contribute to a higher number of storms overall in the season,” hinting that they too are aware of the potential for El Nino to push later and for more activity to occur in the Atlantic basis as a result.

Accuweather also sees a threat for early-season tropical development, particularly in the northwestern Caribbean Sea. Most storms that develop here would track west to Mexico, they say, but note that there is a chance that any early season formation in this are could track northwards towards the Gulf Coast.

The reinsurance, ILS and cat bond sectors will all be watching the tropics carefully from June 1st, the accepted start of the Atlantic season. It takes just one storm to create a major loss to the industry and to cause significant loss of life and damage to property.

With the recent forecasts all calling for higher levels of activity, eyes will be cast on the tropics with some trepidation in 2017.

You can track the 2017 Atlantic tropical storm and hurricane season with Artemis as it develops. We’ll update you as more forecasts emerge.

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