A twofer from Artemis, first up, March 8:
ECMWF forecast for 2024 hurricane season seen as particularly aggressive
Seasonal forecasts for tropical storm and hurricane activity issued at this time of year are often seen as needing to be taken with a large pinch of salt, but another early forecast from the ECMWF is seen as particularly aggressive and so worth highlighting, in calling for 17 named storms and 9 hurricanes in the Atlantic before the end of September 2024.
The European Centre for Medium-Range Weather Forecasts, or ECMWF, runs one of the most highly respected meteorological forecast models and has one of the largest supercomputer data centres to run it on, so it deserves some attention.
As we reported the other day, early long-range forecasts for the 2024 Atlantic hurricane season are calling for it to be particularly active.
The timing of a shift to La Niña conditions is seen as one of the critical factors for the 2024 hurricane season, as that could make conditions more conducive to storm formation and reduce the wind shear that hinders tropical storm development.
Another key factor for the 2024 hurricane season is the fact sea surface temperatures (SSTs) in the tropical Atlantic are already above average and in some cases well above, providing conditions that should see a ready supply of the fuel hurricanes require to form and intensify.
Finally, forecasts for steering currents also suggest that the United States could be more under threat this year than last, while the Gulf of Mexico is also highlighted as a potential hotspot for 2024 tropical storm activity.
The ECMWF provides a seasonal outlook for tropical storm activity in the Atlantic from April through the end of September and during that period the model ensemble average calls for around 17 named tropical storms, with 9 of them becoming hurricanes.
The ECMWF model forecast also suggests accumulated cyclone energy (ACE) levels 170% above normal, which would translate into ACE of 165 by the end of September, which would signal an active first few months of the 2024 hurricane season.
Experts point out that forecasts at this lead time tend to lack skill, as do the ones from December we had covered in our recent article.
But, for insurance, reinsurance and insurance-linked securities (ILS) market interests, it’s still important to watch the evolving forecasts, to be informed as to how conditions may turn out.
Of course, this is an industry where decisions on portfolio construction are rarely taken due to long-range forecasts, but as the hurricane season approaches, any suggestion of more hurricane threat for one part of the coast or another can influence investment decisions, especially in the cat bond market (for example with Florida specific or Gulf Coast specific risks).
Some are saying that this ECMWF forecast is the most aggressive it has ever issued this early on, but there is a lot that can happen meteorologically and climatologically before the season begins, as well as lot that can happen through it.....
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And March 14:
2024 hurricane season – La Nina with lower odds of re-curving: Klotzbach at SIFMA ILS
Speaking today at the SIFMA ILS conference in Miami, Phil Klotzbach, Ph.D., a Senior Research Scientist at the Department of Atmospheric Science of the Colorado State University, provided some insights into what to expect for the coming 2024 Atlantic hurricane season.
Klotzbach and his team provide one of the seasonal hurricane forecasts that the insurance, reinsurance and insurance-linked securities (ILS) community watches most closely.
His comments are telling, of the potential for an active year. While he also provided some insights that suggest the track of Atlantic tropical storms and hurricanes in 2024 could prove to be more threatening for losses than seen last year.
“There’s been a lot of discussion already, a lot of excitement about the 2024 hurricane season and one of the big reasons why is because we had El Niño last year which, at least somewhat put the brakes on the season for being too active.
“But that El Niño is going away, I would say right now it’s on life support and certainly likely to be knocked out here in the next couple of months,” Klotzbach explained.
“But if you look at the Atlantic, that’s a lot of very, very dark red and so that record warm Atlantic hasn’t gone anywhere. So the big concern is, if we have that record warm Atlantic, we don’t have El Niño putting somewhat of the brakes on, you know what the heck are we going to see for 2024.
“So when it comes to El Niño, the odds of it going away are very high. This is the forecast that has just come out from the Climate Prediction Centre, and they’ve actually upped the odds now to over 80% of La Nina for August through October.”....
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These follow on Hurricane Watch: "Long-Range Forecasts Suggest 2024 Hurricane Season From Hell":
This is part of what we were thinking about back on January 29 when we mentioned:
...An interesting situation. Depending on how the equities act over the next few weeks this may be setting up an odd little pair trade, long U.S. natural gas producers, short U.S. insurers and/or international reinsurance companies....
Possibly of interest, January's " The Habitués Of London's Square Mile Like Them Some Catastrophe Bonds":
We shall mount an expedition to glean what we can of their manners and customs.
