Tropical Storm Risk Forecasts Active 2010 Hurricane Season

May 25, 2010

Tropical Storm Risk (TSR) provides “real-time mapping and prediction of tropical cyclone wind fields worldwide.” The firm is co-sponsored by Aon Benfield, with RSA and Crawford & Company. It has just released a “pre-season outlook report to coincide with the start of the 2010 Atlantic hurricane season.”

The timing was eerily prescient, as the first tropical depression of the season has formed in the Atlantic of the eastern coast of the U.S. [See IJ web site – https://www.insurancejournal.com/news/national/2010/05/25/110138.htm]. TSR’s report anticipates “Atlantic basin and U.S. land falling hurricane activity being 55 percent above the long-term (1950-2009) norm.”

TSR is part of Aon Benfield Research’s new academic and industry collaboration. It maintains its April and December forecasts for an active hurricane season. The bulletin noted that the pre-season outlook includes the following:
— A 77 percent probability of an above-normal Atlantic hurricane season; an 18 percent probability of a near-normal season, and only a 5 percent chance of a below-normal season.
— 16 tropical storms including eight hurricanes and four intense hurricanes. This compares to long-term norms of 10, six and three respectively.
For U.S. land falling activity, TSR forecasts:
— A 74 percent probability of above-normal U.S. land falling hurricane activity; a 19 percent likelihood of a near-normal season, and only a 7 percent chance of a below-normal season.
— Five tropical storm strikes on the U.S., including two hurricanes. This compares to long-term norms of three and 1.5 respectively.

The bulletin also explained that three main climate factors will determine the level of hurricane activity in the Atlantic basin. Occurring in August and September, these are “the speed of trade winds over the tropical North Atlantic, sea temperatures in the tropical North Atlantic, and the sign and strength of El Niño Southern Oscillation. U.S. land falling hurricane activity is influenced by the level of hurricane activity occurring at sea, the pre-season North Atlantic Oscillation, and by July tropospheric wind patterns over the North Atlantic and U.S.”

Professor Mark Saunders at Tropical Storm Risk, indicated: “Every main climate indicator points to the 2010 hurricane season being active. If La Niña develops during the second half of 2010 the above-norm hurricane levels will be even higher.”

John Moore, Head of International Analytics at Aon Benfield, added: “Although uncertainty remains within hurricane forecasts, the insurance industry is increasingly informed by this data source when considering how best to manage its exposure to this risk.”

According to Steve Drews, associate director and lead meteorologist at Impact Forecasting, the catastrophe model development center of excellence within Aon Benfield, “TSR’s pre-season outlooks correctly anticipated the active 2004, 2005 and 2008 hurricane seasons and the quiet 2009 season. 2004’s hurricanes barraged Florida, 2005’s hurricanes Katrina, Rita and Wilma slammed the Louisiana, Mississippi, Alabama and Florida coastlines, and 2008’s hurricane Ike affected the major Texas coastal cities of Galveston and Houston.”

TSR’s next hurricane forecast will be issued on 4 June. Professor Mark Saunders will also be updating the forecast for the 2010 hurricane season and revealing new technology to help (re)insurers manage tropical storm-related risks at Aon Benfield Research’s event: The science behind hurricanes, earthquakes and other natural perils in London on 15 June.

TSRs Pre-Season Hurricane Forecast Report is available at: http://www.aon.com/attachments/reinsurance/201005_tsr_forecast_report.pdf .

Source: Aon Benfield

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