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Colorado State University (CSU) and Tropical Storm Risk (TSR) have forecast the activity levels for the 2021 North Atlantic Hurricane Season to be above average.

CSU has forecast 17 named storms, 8 hurricanes and 4 major hurricanes, whilst TSR has forecast 17 named storms, 8 hurricanes and 3 major hurricanes. Both forecasts are above the long-term average and slightly above the average of the last 10 years. TSR also provides a US landfall forecast, in which they predict 4 named tropical storms and 2 hurricanes making landfall. This prediction is well below the record-breaking levels seen in 2020 and in-line with the 10-year average. Both forecasts state that the key reasons for the above-average activity are warmer sea temperatures and lower trade winds in the area.

The US National Oceanic and Atmospheric Administration (NOAA) is due to make its prediction in late May but has recently amended its definition of an ‘average’ Atlantic Hurricane to include an additional 2 named storms and 1 hurricane, citing improvements in observation platforms and climate change for possible reasons behind the increase.

Measure Named Storms Hurricanes Major Hurricanes
CSU Forecast 2021 17 8 4
TSR Forecast 2021 17 8 3
Long-term Average 12 6 3
10-year Average 17 7 3
NOAA new ‘Average’ 14 7 3
2020 Actual 30 13 6

Alpha comment: after the most active hurricane season on record in 2020 it is welcome to see CSU and TSR forecasts close to the 10-year average figures. There is scope for the forecast to change, as was the case last August when CSU uplifted their forecast significantly. From an insurance perspective the number of hurricanes making landfall and the insured values at the affected locations will be the defining factors for how 2021 is measured, since despite being the most active hurricane season, 2020 was far from the costliest for insured losses.

The stark difference between the long-term average (1950-2020) and the 10-year average, as well as NOAA re-evaluating what they see as an ‘average’ hurricane season, shows the growing effect climate change is having on North Atlantic Hurricane seasons and further demonstrates the need for insurers consistently to challenge their models and factor climate change into their pricing.