No need for Halloween scares
This hurricane season has already been a challenging one for the insurance industry. Whether you are in the insurance or reinsurance industry or have been affected by Beryl, Debby, Francine, Helene, Milton, or any other hurricane, just like a scary movie, people are on the edge of their seats and are eager for this season to be over. However, there is still a month left in the 2024 Atlantic Hurricane season. If you have been following any of your favorite weather personalities, the hype is still scaring people with some U.S. Landfall scenarios. This update will closely examine what we know and what could realistically unfold for the rest of the season.
Season To Date
To start, it is important to understand where the season currently stands. Real-time data from Colorado State University shows that, by most measures, this season has been slightly above average but not exceptionally active. Hurricanes and the number of hurricane days are the most above-normal metrics we have seen this year.
Below is an overview of the different forecast considerations from the season's start. Overall, the average forecast predicting 19 named storms has fallen short, while other metrics, such as the total number of hurricanes and major hurricanes, have aligned more closely with forecasted averages. Overall, the lack of short-lived named storms this season likely contributed to the named storm bust, and the overall lack of storm activity from July 9th - August 3rd did not help.
Overall, the Accumulated Cyclone Energy (ACE) shows that the season has been above normal but shy of the 159.6 value considered a hyperactive season. According to the ACE metric, even if we get one or two more named storms, this season will likely be the 14th or 15th most active year in terms of ACE.
In terms of insurance industry loss, it is too early to estimate the ultimate loss for the year as loss development is still occurring. This is exemplified by Hurricane Milton, Florida Office of Insurance Regulation reporting 169,663 claims open without payment yet. Overall, claims are now starting to level off, with 266,833 claims reported with a total payment of $2.98B, and last Friday, October 25th, the total claims count was 247,432 with a total payment of $2.88 billion. Overall, the industry, when factoring in various believable loss estimates, should develop within the range of $27 to $44 billion for the season, pending no new landfalls.
Going Forward Into November
Of course, all the statistics above could change with another named storm or hurricane formation and U.S. landfall. First, it is extremely rare to get a U.S. landfalling hurricane along the U.S. coastline. Of the 287 U.S. landfalling hurricanes in the NOAA database, only four have done so in November, and three of the four have targeted Florida.
- Nicole in Florida (Cat. 1) on Nov. 10, 2022
- Kate in the Florida Panhandle (Cat. 2) on Nov. 21, 1985 (record latest in season U.S. hurricane landfall)
- A South Florida Cat. 2 on Nov. 4, 1935
- The "Expedition Hurricane" in eastern North Carolina (Cat. 1) on Nov. 2, 1861.
Since the satellite era, it has not been so rare to get a named storm in November. November produces an average of 1 named storm every two years and a hurricane every 3 years. Generally, the trouble areas in November tend to be the Caribbean and Central America. We do not have to go back very far to remember in 2020, within 13 days, Eta and Iota impacted Nicaragua. Of course, as climatology states, the National Hurricane Center is hinting at possible development in these areas over the next 7 days. However, the NHC has been watching for on and off-named storm formations to originate from these areas since Nadine developed on October 18th, yet nothing has happened.
Even so, the forecast model signal seems to slowly increase for a named storm to form in the Southwest Caribbean this weekend or early next week. There are still some differences in how quickly it might develop and how a non-tropical low forming in the northern part of the Caribbean would impact its formation and eventual track out of the Southwest Caribbean.
As of now, there are two outcomes. Overall, low-pressure areas will likely form in the southwest Caribbean, but the timing here is significant. If a storm forms earlier, possibly as early as Saturday, it will likely move northeast towards Hispaniola. If a storm were to form later, perhaps as late as Tuesday next week, models show that the storm would move northwest instead of northeast. This immediately gives the insurance industry that scary vibe.
1) A northwest movement will give the storm more time over water.
2) It brings it to the gulf.
This is the problem that the insurance industry is afraid of after an already very active landfalling season with five named storm landfalls so far this year.
Given the time of year and the current lack of an actual disturbance, it is not too surprising to have such volatility amongst the various computer models. There is a relatively wide range of viable scenarios. The greatest potential threat of a direct name storm or hurricane strike would likely be to the Yucatan Peninsula, NW Caribbean Islands, Cuba. From here, the question is whether the storm moves directly east below Florida, into the Gulf of Mexico, and impacts the FL Peninsula / FL Keys. Does it get shared apart?
For now, the forecast does not include anything scary. They have stronger hints at what might happen, but at this point, nothing can be said with confidence. Just enjoy the week ahead, pay attention, and updates will be provided as needed to support the insurance industry.