The first long-range outlooks and forecasts for the 2019 Atlantic hurricane season both suggest an average level of storm activity, but note some uncertainty over whether an El Niño event occurs and how strong the El Niño Southern Oscillation (ENSO) trend is.
First, Tropical Storm Risk, the insurance and reinsurance industry supported tropical weather researchers from London who published an extended range forecast on December 11th.
The TSR forecasting team call for the 2019 Atlantic hurricane season to see 12 tropical storms (8 to 16), with 5 (2 to 8) that could become hurricanes and 2 (0 to 4) intense hurricanes of Category 3 strength or greater.
This is roughly aligned with the long-term averages of 11, 6 and 3 over the last 69 years, but slightly below recent histories 14, 7 and 3 average from the last decade.
Meanwhile, the tropical forecasting team at Colorado State University published a qualitative outlook for the 2019 Atlantic hurricane season on December 13th.
They don’t provide specific forecast numbers, being a qualitative outlook rather than a quantitative forecast, but do suggest the greatest probability is for an accumulated cyclone energy (ACE) of around 80 for the season, which would equate to 8 to 11 named tropical storms, 3 to 5 hurricanes and 1 to 2 major hurricanes.
However, this forecast team do attach a 25% chance to an ACE of 130 occurring, if the Atlantic Multidecadal Oscillation (AMO) is above average but an El Niño event does not occur.
In that case, an ACE of 130 could equate to a higher number of storms and hurricanes, making for an above average season.
So El Niño is a major factor in the forecasts and the probabilities of an active hurricane season in the Atlantic in 2019.
After 2017 and 2018 the reinsurance and insurance-linked securities (ILS) market will be hoping for a more settled tropical season in 2019.
But as ever, El Niño conditions are a wildcard that can affect reinsurance market and ILS outcomes, being a weather and climatic phenomena that can drive extreme impacts across different regions of the world.
It must be stressed that it is terribly early to be considering how active the tropical Atlantic will be in 2019 and how much hurricane activity there will be.
But given the losses hurricanes can drive through reinsurance, ILS and catastrophe bond positions, these outlooks provide important food for thought for ILS fund managers and underwriters alike.
We’ll keep you updated as further forecast updates come out in the New Year.