2015 Atlantic hurricane season forecasts well below averages

Forecasts for 2015 Atlantic tropical storm and hurricane season activity remain well below both long-term and more recent historical averages, suggesting another low impact year for the U.S. coastline, at least in terms of storm numbers.

Updated forecasts are now available from both the Colorado State University Dept of Atmospheric Science forecast team of Klotzbach and Gray and the Aon Benfield supported Tropical Storm Risk initiative.

Both teams have lowered their forecast view for the 2015 Atlantic hurricane season, in fact the Colorado State team of Klotzbach and Gray have delivered their lowest pre-hurricane season forecast ever for 2015.

Klotzbach and Gray are calling for a record-low number of tropical storms and hurricanes, with a forecast for the 2015 season of 7 named tropical storms, 3 hurricanes and just 1 major hurricane of Category 3 strength or greater.

It’s the lowest forecast numbers since CSU began publishing forecasts back in 1984, a strong indication that the hurricane lull of recent years is set to continue.

The forecasters commented:

We anticipate that the 2015 Atlantic basin hurricane season will be one of the least active seasons since the middle of the 20th century. It appears quite likely that an El Niño of at least moderate strength will develop this summer and fall. The tropical and subtropical Atlantic are also quite cool at present. We anticipate a below-average probability for major hurricanes making landfall along the United States coastline and in the Caribbean.

In terms of landfall probabilities, Klotzbach and Gray forecast the following:

Probabilities of at least one major Cat 3+ hurricane landfall on the U.S. coastline:

1. Entire U.S. coastline – 28% (average for last century is 52%)
2. U.S. East Coast Including Peninsula Florida – 15% (average for last century is 31%)
3. Gulf Coast from the Florida Panhandle westward to Brownsville – 15% (average for last century is 30%)

Probability for at least one major Cat 3+ hurricane landfall in the Caribbean:

• 22% (average for last century is 42%)

As the landfall probabilities show, the forecast from Klotzbach and Gray is for a 2015 hurricane season with activity that is roughly half the long-term averages.

Tropical Storm Risk has lowered its forecast since its December 2014 announcement, to now predict 11 named storms, 5 hurricanes and 2 major hurricanes for the 2015 season. While this is significantly higher than CSU, TSR’s projected hurricane season activity forecast is 45% beyond the long-range average since 1950 and 50% below the 2005-2014 norm.

After the last few years of low-hurricane impact on the United States coastline, the forecasts are good news for coastal dwellers and state and federal governments. They are also good news for homeowner insurers and their reinsurance firms, who will be hoping for another low impact hurricane season which would help to boost their profitability for another year, as hurricane and tropical storm season losses remain one of the largest risks they face.

Of course another low-impact hurricane season in 2015 will not do anything for reinsurance rates and pricing, but with capital so high in the insurance and reinsurance sector it would take something really impactful to move the needle anyway.

The 2015 Atlantic hurricane season is of course extremely relevant to the reinsurance, catastrophe bond and insurance-linked securities (ILS) marketplace, with it providing the single highest peril exposure to all of these marketplaces.

Now much nearer to the season’s beginning, these forecasts suggest that 2015 will see Atlantic and Caribbean basin tropical storm and hurricane activity at levels well below the historical averages. If the season pans out as the forecasters expect it could buoy results for reinsurers and ILS funds, but it’s important to remember that a single landfall from a strong hurricane could wipe out results for much of the sector.

The new forecasts put the average across the forecasters we track on our 2015 Atlantic Tropical Storm & Hurricane Season page at 10.66 named storms, 5.33 hurricanes and 2 major hurricanes.

We will update you as more forecasts become available as the 2015 hurricane season nears.