Early predictions on 2024 Hurricane Season

Posted 08/03/2024 – Quick takes

Early reports from climatologists are suggesting that 2024 will be an active Atlantic Hurricane Season. This is due to expected strong La Niña conditions coupled with sea temperatures being 1-3 degrees Celsius warmer than average. This is in direct contrast to the 2023 conditions where the El Niño conditions resulted in a benign hurricane season. Some experts are also suggesting that there should be a new category 6 for hurricanes which exceed 195 mph which Lloyd’s mentioned yesterday in its market message.

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US D&F property and reinsurance continues to be a key part of Lloyd’s premium income and this is expected to continue growing in 2024. These early predictions are more on the possible number and strength of hurricanes rather than the trajectory but it is very important for both underwriters and capital providers to remember that we are in a risk business and in any year, large hurricanes could make landfall on built up areas causing major loss. The remediation undertaken in recent years has led to rate uplifts and deductible increases and therefore there is more premium being received to cover potential losses although this has not been tested over the last 12 months. Accordingly to Burkhard Keese in the recent Lloyd’s market message, the reserve margin of the market is at its highest level and means that the market can more easily absorb unforeseen events.

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