RMS has issued some details on its hurricane risk forcast for 2021, which is always interesting for global insurance brands;
North Atlantic Hurricane
The question on everyone’s mind is: How will the Atlantic basin follow up last year’s record-breaking hurricane season? Most prominent forecast agencies, including NOAA and Colorado State University, are projecting another above-average season. If these forecasts verify, the 2021 Atlantic hurricane season would be a record sixth consecutive above-normal season.
The probability of a hurricane making landfall in the U.S. increases during more active seasons, although there are exceptions to this tendency. This year’s forecasts reflect the projection of phases of key atmospheric influences – including the El Niño-Southern Oscillation, Atlantic sea surface temperatures, and the Atlantic Multidecadal Oscillation – that are generally favorable for tropical cyclone development.
Each forecast agency has their own expectation of the skillfulness of their own forecast; in some cases, forecasts exceed these expectations and in other cases they fall short. RMS analysis shows that when Atlantic seasonal forecasts are wrong, they tend more often to be underestimates of activity, rather than overestimates. That was certainly the case last year, when no agency correctly projected the 30 named storms and 14 hurricanes that formed during the 2020 hurricane season, the most active on record.
Western North Pacific
Last year, Japan registered no tropical cyclone landfalls for the first time in 12 years, which acted to suppress the level of insured tropical cyclone losses suffered across the broader Asia region. This year, the majority of forecasts call for near-average number of tropical storms and typhoons to develop. The Western North Pacific typhoon season runs throughout the calendar year with no seasonal boundaries, although most of the activity typically occurs between May and November.
The forecasts of a near-average year reflect opposing signals of key meteorological influences, including the El Niño-Southern Oscillation, which is forecast to slightly hinder activity, and warm Western North Pacific sea surface temperatures, which are forecast to support higher overall activity.
Of course, no matter the forecast, it only takes one event to make for a costly season in either the North Atlantic or Western North Pacific.