National Underwriter P&C magazine recently reported that the soft insurance market is showing no signs of reversing as abundant capacity combined with diminished demand combines to keep a downward pressure on rates. This is the seventh consecutive year of soft overall market conditions. At the same time, forecasters are calling for a more active than normal Atlantic hurricane season with fifteen named storms, eight hurricanes, and four “major” hurricanes. Read this article for more details.
After several years of above normal hurricane activity in the Atlantic-Caribbean basin, it appears that the El Nino weather pattern has delivered a very quiet season — so far. Reuters reports that the Atlantic hurricane season has been the quietest in more than a decade with just two hurricanes and a total of eight tropical storms. Read this article for more details.
The National Oceanic and Atmospheric Administration (NOAA) forecasts a “near normal” hurricane season, and so far there have not been any named storms in the Atlantic. NOAA forecasts are closely watched by insurers, investors, and property owners for obvious reasons. After a number of active years, most everyone would like a boring season for 2009. Read this article for information on new option contracts that are now trading based on the outcome of the hurricane season.
With the hurricane season officially starting on June 1, residents of the Gulf and Atlantic Coasts are no doubt listening carefully to the many forecasts that are being made regarding the number of “named storms” that are likely to occur this year. Insurance companies and investors may also look to such forecasts to anticipate damages that may take place during the storm season. The Wall Street Journal published an interesting article yesterday regarding the accuracy of early season predictions. For the most part, such forecasts are not reliable indicators of the severity of the storm season.