Two competing factors are set to drive conversations during the 2023 Atlantic hurricane season, as well as risk. But there are other important areas insurance, reinsurance and ILS market interests should remain alert to, according to Jeff Waters of Moody’s RMS.
Jeff Waters is a meteorologist and has been the Product Owner for the RMS North Atlantic Hurricane Models since 2018. He’s been at the company for over a decade in roles focused on hurricane modelling and joined us for this video interview to discuss the hurricane season just as it officially began.
Commenting on the forecasts we’ve reported on, Waters said, “The majority of the forecasts tended to focus on two competing factors, the first is the the ENSO state, the other competing factor is the sea surface temperatures in the Atlantic basin, those continue to be well above average.
“So you have two different competing items happening and I think in a lot of instances, the forecasts that are coming out for this season, are are almost expecting the two to offset each other to an extent.”
He went on to explain the uncertainty this presents though, not least due to timing, saying, “Some of the more recent forecasts that have come out have started to deviate from that, that average range there, so certainly pointing to some of the uncertainty that could play out over the next four to six months, especially if one of those signals, whether it be the state of the basin in terms of sea surface temperatures, or the transition to an El Nino state, if one of those happens earlier or later than expected.
“Or perhaps the El Nino state isn’t quite as strong as it’s currently projected to be, that could have a direct influence on how the season plays out in terms of hurricane hurricane activity and the total number of named storms.”
Waters went on to discuss how these climate signals could translate into direct risk for US landfalls, what insurance, reinsurance and ILS markets should be watching closely and how to think about the latest risk modelling tools that can assist with analysing hurricane risk this season.
Watch the full video for more insights into the 2023 Atlantic hurricane season from Moody’s RMS’ Jeff Waters.
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