Insurers with exposure in coastal states may be facing another year of elevated claims from tropical systems as the National Oceanic and Atmospheric Administration's Climate Prediction Center expects a busy 2021 Atlantic hurricane season.
NOAA said its forecast for elevated tropical storm activity is due to a combination of warmer-than-average sea surface temperatures and weaker tropical Atlantic trade winds. The forecast also cited elevated West African monsoon activity as a factor in its prediction, adding that El Niño Southern Oscillation conditions currently are in the "neutral phase," with La Niña conditions likely to return later in the season.
NOAA anticipates 13 to 20 named storms during the Atlantic hurricane season, which began June 1 and runs through the end of November. It expects six to 10 of those named storms to become hurricanes and three to five systems to reach major hurricane strength.
An early forecast from Colorado State University likewise calls for an active hurricane season, with an elevated probability of major hurricanes making landfall along the continental U.S. and hitting Caribbean nations.
Phil Klotzbach, a research scientist in CSU's Department of Atmospheric Science, said in a news release that this year's hurricane season has characteristics similar to 1996, 2001, 2008, 2011 and 2017.
"All of our analog seasons had above-average Atlantic hurricane activity, with 1996 and 2017 being extremely active seasons," Klotzbach said.
CSU predicts that the hurricane activity will be about 140% of the average season, as compared to about 170% of the average season seen in 2020. Six hurricanes hit the continental U.S. in 2020.
Hurricane Laura, a Category 4 hurricane that made landfall in Louisiana in late August 2020, was the most expensive weather event of the year, according to NOAA, which pegged total losses at approximately $19 billion.
The 2020 season was the fifth-straight Atlantic hurricane season where activity was above normal, according to Allianz Global Corporate & Specialty report.
The hurricane activity can be divided into two distinct seasons, in which the first four months were fairly active, but the economic impact was relatively minimal, the report stated. However, in the last two months of the season, there were seven named storms, four major hurricanes and damage of about $15 billion. But even though it was the busiest year in the history of named storms, 2020 was not among the costliest Atlantic hurricane seasons.
There were 416 natural catastrophe events across the globe in 2020, which resulted in economic losses of $268 billion, according to a report by Aon plc. Aon estimated that about $22.73 billion of worldwide tropical cyclone damage was insured.