Atlantic Hurricane Season

Tropical Storm Risk (TSR) has released its April forecast update for the upcoming 2025 Atlantic hurricane season and lowered the number of named storms it calls for by one, but also provides its guidance for landfalling storms, saying that it forecasts there could be 2 hurricane landfalls in the United States this year.

There are now a number of long-range forecasts available for the upcoming 2025 Atlantic hurricane season and between them the indication is that meteorologists are anticipating a season about in-line with the recent historical ten-year average.

The first long-range forecast for the 2025 Atlantic hurricane season was released today, with Tropical Storm Risk (TSR) projecting there could be 15 named storms, 7 hurricanes and 3 major hurricanes next year, which would be roughly aligned with the 30-year norm.

According to global reinsurance giant Munich Re, both economic and insurance market losses from tropical cyclone activity around the globe in 2024 are “significantly higher” than averages, with the insured total for the year estimated at $51 billion.

Making adjustments to the exposure of insurance-linked securities (ILS) portfolios based on inputs gleaned from the early July hurricane season forecast can drive opportunities to generate excess returns in reinsurance, according to a study from Euler ILS Partners and Tropical Storm Risk (TSR).

Analysts in the J.P. Morgan European equity research team have said that if hurricane Milton’s industry impact comes in between $20 billion and $40 billion, they “don’t see Milton driving a reinsurance market turn” in 2025.

Hurricane Milton is estimated to have caused total insured losses of between $17 billion and $28 billion, CoreLogic has said, with this figure including losses to the NFIP, bringing the firm’s estimate in towards the lower-end of those seen so far.

Moody’s RMS Event Response has estimated that private market insured losses from hurricane Milton will fall in a range between $22 billion and $36 billion, with a best estimate of $26 billion.

Another estimate for insurance and reinsurance industry losses from hurricane Milton has been released, with Verisk saying it anticipates the private market insured loss will fall in a range from $30 billion to as much as $50 billion.

Having shown a divergence in manager strategies as NAVs moved in different directions at times and by different amounts as hurricane Milton approached, the US mutual investment funds that allocate to catastrophe bonds and other insurance-linked securities (ILS) diverged again at pricing on Friday, but have since stabilised having incorporated post-landfall net asset value adjustments.