As updated hurricane predictions continue to point to an active season with a greater chance of U.S. landfall, Fitch Ratings has warned that the season is approaching as many reinsurers have already used up their catastrophe budgets.
In a recent update to its Atlantic hurricane season prediction, Weather Services International (WSI), a member of the Weather Channel Cos., says it expects 15 named storms, including eight hurricanes and four intense hurricanes.
An active season does not necessarily mean storms will find U.S. land. Last year’s historic season of 19 named storms and 12 hurricanes meant nothing to the United States, as no storm made U.S. landfall.
However, WSI Chief Meteorologist Todd Crawford says, “We do expect a much more impactful season along the U.S. coastline.”
The U.S. has been spared a hurricane landfall since 2008, but the country has not had a three-year stretch without a landfall since the 1860s, he adds.
Among other recent predictions, the National Oceanic and Atmospheric Administration says conditions in the Atlantic are ripe for 12 to 18 named storms, six to 10 hurricanes and three to six intense hurricanes. And the well-known team at Colorado State University calls for 16 named storms, nine hurricanes and five intense hurricanes.
Intense, or major, hurricanes are Category 3 or above on the Saffir-Simpson Hurricane Wind Scale, which mean the storm packs sustained winds of 111-130 mph and is expected to cause serious damage.
Each of the forecasts exceeds what is considered the historical average hurricane season, although what is defined as “average” varies somewhat according to the source. Predictions for 2011 do fall within the level of activity that has occurred during an active tropical period that began in 1995, says Crawford. Since 1995 the season has averaged 15 named storms, eight hurricanes and four intense hurricanes.
Meanwhile, in a report on the 2011 hurricane season, Fitch says first-quarter global catastrophes, such as the earthquakes in New Zealand and Japan, and spring tornadoes in the U.S., have already drained many reinsurers’ 2011 catastrophe budgets.
Fitch says insurers and reinsurers could face rating actions in the event of hurricane losses depending on the size of the loss relative to capital, options pursued to replenish capital and underwriting prospects going forward.