The 2018 Atlantic hurricane season is expected to be characterised by activity levels that are either normal or above-normal, by the U.S. National Oceanic & Atmospheric Administration (NOAA), which forecasts 10 to 16 named tropical storms, 5 to 9 hurricanes and 1 to 4 major hurricanes during the season ahead.
The Atlantic tropical storm and hurricane season begins on June 1st and runs through till the end of November.
U.S. tropical cyclone risk remains the most dominant peril in the outstanding catastrophe bond market and the biggest contributor to ILS fund and many reinsurance firm returns and profits, making the outlook for the season important for the market.
NOAA’s forecast for 2018 Atlantic hurricane season activity is for a 35 percent chance of an above-normal season, a 40 percent chance of a near-normal season, and a 25 percent chance of a below-normal season.
They say there is a 70% chance of 10 to 16 named storms (winds of 39 mph or higher) forming, of which 5 to 9 could become hurricanes (winds of 74 mph or higher), including 1 to 4 major hurricanes (category 3, 4 or 5; with winds of 111 mph or higher). An average hurricane season typically features 12 named storms, of which 6 become hurricanes, including 3 major hurricanes.
As we’ve stated in other recent articles on the hurricane season, the expectation that there could be a weak El Nino developing by year-end, as well as close to average sea-surface temperatures across the tropical Atlantic Ocean and Caribbean Sea, are factors NOAA says drives its outlook.
As we wrote yesterday, JLT Re said that cooler than normal sea surface temperatures may mean that hurricane forecasts get reduced at the next updates. However, NOAA’s forecast would suggest that they may not reduce by much and it could be later in the season that we see changes to forecasts.
Our Artemis average forecast for the 2018 Atlantic hurricane season from the list of meteorological organisations we track remains for 14 named storms, 7 hurricanes and 3 major hurricanes.
Of course storm numbers are not what matters, it is intensity and where they are steered that drives the potential for insurance, reinsurance and ILS market losses.
The 2018 hurricane season could get off to an early start, if a depression currently loitering in the Gulf of Mexico can gain more shape and form into the first named tropical storm of the season, which would be Alberto.
Whether tropical storm Alberto does form or not, the Panhandle and Florida areas are set for significant rainfall levels over the coming days.
Keep track of 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.
NOAA also released its eastern Pacific outlook and calls for a 70 percent chance of 14 to 20 named storms, of which 7 to 12 are expected to become hurricanes, including 3 to 7 major hurricanes.
Register now for our upcoming Singapore conference. Tickets on sale here.