Tropical weather and risk analytics provider Climate Forecast Applications Network (CFAN) has boasted of more accurate hurricane track forecasts for 2017’s active wind season than were provided by the ECMWF weather model or the National Hurricane Center.
Climate Forecast Applications Network (CFAN) uses its proprietary hurricane tracking algorithm as it seeks to improve on the forecasts provided by the European Centre for Medium Range Weather Forecasting (ECMWF) weather model.
The company has assessed how it performed through the critical 2017 Atlantic hurricane season and found that its hurricane track forecasts were more accurate than some of the most widely used in the reinsurance and insurance-linked securities (ILS) industry.
CFAN says that at all forecast lead times beyond 2 days, its forecast track was on average more accurate than those produced by the ECMWF model and the NOAA run National Hurricane Center (NHC).
Further out, at five days before landfall, the average track error for CFAN’s hurricane track forecasts was 131, which it says was 7 miles smaller than the ECMWF’s and 39 miles smaller than the NHC’s.
Additionally, CFAN says that its average track error for hurricane track forecasts was 287 miles at 10 days lead time, which the company notes was comparable to the NHC’s average track error for a 3-day forecast in the early 1990’s.
“Improved weather forecasting is an underappreciated success story,” commented Peter Webster, CFAN’s Chief Scientist. “The average track error of NHC forecasts in 2017 at 5 days lead time was 170 miles, the same as the 2-day error in the mid 1990s.”
“We are pleased with our hurricane forecasts in 2017 and the growth in our business, particularly in the energy, insurance and insurance-linked securities fields,” added Judith Curry, CFAN’s president. “For the 2018 season, we plan to offer real-time track verification as part of our TropiCast hurricane forecast product.”
For the insurance-linked securities (ILS) market and its investors in catastrophe bonds or other collateralized reinsurance assets, having the most accurate view of a hurricanes eventual track as early as possible can be critical.
Accurate hurricane track forecasts can help ILS fund managers in making last-minute portfolio hedging decisions, the so-called live-cat situation. Or in being able to make informed statements to their clients and investors, to keep partners on both sides of the business informed.
Accurate hurricane track forecasts can also help ILS managers or investors who may want to invest in distressed, or potentially distressed, ILS and reinsurance assets, as well as those that seek to provide capacity to insurance and reinsurance firms looking for last-minute coverage.
The improvement of weather forecasting and risk modelling tools means that ILS and reinsurance players can now be much better informed than before.
CFAN’s forecast success in 2017 looks promising, as the industry approaches the next hurricane season with trepidation following its major losses, which should make any forecast enhancement particularly interesting to the market this year.
Keep track of the tropics this year with our 2018 Atlantic Hurricane Season page where we will update the forecast numbers over the coming months and then track every storm of the season.