North Atlantic Hurricane Season begins: 2022 Forecast Update
Posted 01.06.2022 – Quick takes
The North Atlantic Hurricane season officially began today and for the first time in seven years a storm has not formed in the Atlantic prior to the season officially commencing (the recent storm Agatha was in the Pacific). We reported in April that respected forecasters Colorado State University (CSU) and Tropical Storm Risk (TSR) had forecast activity levels in 2022 to be above average. The US National Oceanic and Atmospheric Administration (NOAA) and the Met Office have reinforced this expectation and both have released forecasts with an expectation of an above ‘average’ number of both named storms and, crucially, major hurricanes. The NOAA has forecast between 14-21 named storms (2020: 13-20), 6-10 hurricanes (2020: 6-10) and 3-6 major hurricanes (2020: 3-5). The Met Office has predicted 18 named storms (2020: 14) , 7 hurricanes (2020: 7) and 4 major hurricanes (2020: 3). Aside from TSR, which has released the same forecast as it produced for the 2021 season, all forecasts are higher in at least one of these measures. Therefore, it is thought that hurricane activity will be at least as high this season as it was last year.
Update: 6th June 2022 – CSU has revised its forecast to include an additional named storm, hurricane and major hurricane.
|Measure||Named Storms||Hurricanes||Major hurricanes|
|CSU Forecast 2022||20||10||5|
|TSR Forecast 2022||18||9||4|
|NOAA Forecast (midpoint)||17.5||8||4.5|
|10 year average||17||7||3|
|5 year average||20||9||4|
This ‘above-average’ level of expected hurricane activity has become the norm in recent years. Whilst on one hand this has meant that property reinsurance portfolios have largely been loss-making during this period, it now should also mean that underwriters have positioned and priced their portfolios to manage this heightened level of risk. These forecasts are yet another reason for reinsurance underwriters to demand meaningful improvements to the price and structure of programmes at the crucial 1/6 and 1/7 renewals. As always, we emphasize that there is a high degree of uncertainty in the forecasts and the implications for the insurance industry are wholly dependent upon whether the hurricanes make landfall and if there are significant insured values in those locations.