Almost three months ago we passed a
remarkable record in catastrophe loss.
And yet no one seems to want to
No banner headlines in the newspapers.
No speeches at the Monte Carlo Reinsurance Rendezvous.
The first half of 2019 generated the lowest catastrophe insurance loss for more than a decade. The estimates come in at: US$15 billion (Munich Re), US$19 billion (Sigma), or US$20 billion (Aon). In straight dollar terms, independent of any adjustment for inflation or exposure, this is lower than any year since 2006.
Now that we’ve reached the halfway stage of the 2019 North Atlantic hurricane season, now feels like a good opportunity to review the season to date and look ahead to what the remainder of the season might have in store.
A Quiet Start to the Season
If you thought the Atlantic had been a little quiet through
the early summer, you’d be correct. The basin has had its quietest start since
2014. The strongest of these storms to date, Barry, made landfall near
Intercoastal City, Louisiana, on July 13 as a weak Category 1 hurricane. RMS
estimated that the insured U.S. losses from Hurricane Barry would not exceed US$500
million, inclusive of wind, storm surge, and inland flood damage, including
losses to the National Flood Insurance Program (NFIP).
Following Barry, the basin went 35 days without a named storm until Chantal formed over the open water in the far North Atlantic on August 19. It marked the first time since 1982 that the Atlantic had not generated a named storm in the period between July 15 and August 19.
The 2019 North Atlantic hurricane season officially got underway on Saturday, June 1, and marked the start of a six-month period that runs right through to November 30. Blatantly ignoring this official start, the North Atlantic has already produced its first named storm of 2019. On May 20, Subtropical Storm Andrea formed over open water in the western Atlantic, several hundred miles south of Bermuda. It was a relatively weak and short-lived storm, lasting for less than a day before dissipating. This is the fifth consecutive year that a storm had formed ahead of the official start date of the hurricane season.
As I shared in a previous blog, storms can form at any time of year, but it is important to remember that there is no historical relationship between the date of the first named storm and the overall seasonal hurricane activity, so the early start to 2019 does not provide us with any clues as to how the season might pan out.
The North Atlantic hurricane season runs from June 1 to November 30 but based on the large exposure the (re)insurance industry has to hurricanes, intrigue about what each season will deliver persists year-round. And with three months to go until the official start of the 2019 season, (re)insurers and catastrophe modelers are actively looking ahead to see what it might deliver.
Although the National Oceanic and Atmospheric Administration (NOAA) does not issue its annual seasonal activity forecasts before late May, others in the meteorological community do provide early indications of upcoming activity. These started as early as December last year with forecasts and commentary issued by Tropical Storm Risk (TSR) and Colorado State University (CSU). But how skillful are these extended range forecasts and what insight, if any, can we gain from them?