Accurate assessment promotes:
Sound pricing
Adequate loss reserves
Prevents overexposure to catastrophic risk
Underestimating the impact of natural catastrophes creates a discrepancy between the expected and actual risk, leading to a potentially unstable and dangerous financial situation where insurance payouts exceed the premiums collected.
However, hurricane risk is not static; it changes over time due to environmental conditions and shifts in exposure, making it crucial to update hurricane risk assessments every year to reflect the latest data and insights. CoreLogic® is committed to being a trusted advisor and reliable source for updated and ongoing global natural disaster risk assessments.
The CoreLogic 2024 Hurricane Risk Report quantifies and explains the magnitude of hurricane risk to the U.S. Atlantic and Gulf States this year. Risk quantification is necessary for all parties interested in protecting property, including insurance carriers, mortgage lending institutions, real estate professionals and individual homeowners, whose livelihood can be upended by a single catastrophic event. A data-driven assessment of risk leads to effective and practical mitigation measurements which will reduce the catastrophic financial impact left in the wake of a major hurricane.
The Ingredients for an Active Season
The 2023 Atlantic hurricane season was a battle between two opposing forces: meteorological phenomena associated with the El Niño phase of the El Niño Southern Oscillation (ENSO) and record warm sea surface temperatures (SSTs) in the Atlantic Ocean. The former creates an unhabitable environment for hurricanes as it is typically associated with increased vertical windshear (change in wind speed or direction with elevation), which hampers development.
Hurricanes also require heat from the oceans to develop and grow, and there was an abundant amount of heat in the Atlantic Ocean in 2023. 2023 global surface temperatures exceeded the 20th-century average by 2.12°F (1.18°C).[1]
[1] https://www.ncei.noaa.gov/news/global-climate-202312
Arlene
Bret
Cindy
Don
Emily
Franklin
Gert
Harold
Idalia
Jose
Katia
Lee
Margot
Nigel
Ophelia
Philippe
Rina
Sean
Tammy
Vince
Whitney
The 2023 season saw 20 total named storms -- the fourth-highest amount in recorded history -- and 10 hurricanes, three of which became major hurricanes (Category 3 or greater on the Saffir-Simpson scale). This compares to an average of 14 named storms per season from 1990-2021.
Despite the high level of activity, only one Atlantic Ocean storm made landfall in the U.S. as a hurricane (other landfalls included Tropical Storms Harold and Ophelia). Hurricane Idalia was the largest to make landfall on the U.S. East or Gulf Coasts when it lashed the Florida Big Bend coastline as a Category 3 hurricane. Hurricane Idalia made landfall in a relatively remote part of the Florida coastline and that helped mitigate the final insured loss total. CoreLogic® estimated insured losses across the southeastern U.S. from Idalia to be less than $2 billion.
The U.S. East and Gulf Coasts were fortunate to see only one landfalling hurricane. The National Oceanic and Atmospheric Administration (NOAA) 2024 Hurricane Season Outlook indicates that La Niña conditions will return to the Pacific Ocean, which will reduce the amount of vertical windshear in the Atlantic Ocean. Additionally, Atlantic Ocean SSTs are already warmer than any previous year on record. All indications point to another very active hurricane season.
2024
NOAA Outlook
The National Oceanic and Atmospheric Administration (NOAA) 2024 hurricane forecast called for 17 - 25 named storms, 8 - 13 hurricanes, and 4 - 7 major hurricanes. It also indicates a 85% chance of 2024 being an above-normal season. This high forecast is due to near-record high ocean temperatures in the Atlantic, the onset of La Nina conditions in the Pacific, diminished trade winds, and reduced wind shear. These factors create an environment conducive to tropical storm formation.
NOAA scientists are predicting that the shift to La Nina conditions will be swift as one of the most intense El Ninos in history winds down. This transition is expected to boost Atlantic hurricane activity due to La Nina’s tendency to lower wind shear in the tropics. Substantial heat content in the tropical Atlantic Ocean and the Caribbean Sea also provides ample energy for storm development.
CoreLogic remains committed to providing clients and readers up-to-date data & information on the changing risk environments across the globe.
As we head into the 2024 season, continued vigilance and preparedness will be crucial in mitigating the potential impacts of future hurricane seasons.