You may be forgiven for thinking that hurricane forecasters were being overzealous with their predictions. The high number of storms predicted seemed almost impossible after the quiet season experienced last year and now, over a month in, the season seems benign so far. WSI Corp have revisited their forecast and adjusted it although not as much as you might think.
In their latest update to their forecast for the 2010 Atlantic tropical storm and hurricane season WSI now predict 19 named storms (down from 20) but sticks with their original forecast of 11 hurricanes and for 5 of those to be intense (category 3 or higher). The forecast is well above the average but is close to other forecasters and they all seem to agree on one thing, the season will be more severe than usual.
WSI says that August to October is expected to be a very active period. They also state that the northeast coast from North Carolina to Maine is twice as likely as normal to experience a hurricane this year.
Obviously this will not help the nervousness that the insurance-linked security investment community is experiencing currently. However the appetite to invest is very much still there and this may be a perfect time to market catastrophe bonds which don’t include U.S. windstorm risks.