On June 1, we entered the 2014 North Atlantic hurricane season. The National Oceanic and Atmospheric Administration (NOAA) is predicting a mild to normal hurricane season. Colorado State University forecasters have also predicted below-average activity, though they have since altered this prediction to include one more potential storm and downplay the role of El Niño. Still, their conclusion remains the same—it will likely be a quiet season.
But no amount of forecaster flip-flopping can change the past. These predictions follow a mild 2013 season when no hurricanes reached the U.S. mainland, one of many complex factors driving down overall property-catastrophe insurance pricing in 2014. If the mild predictions are correct, insurers may be looking at another year of low wind-related property catastrophe losses.
Although we have to wait and see how the hurricane season plays out, agents and brokers can still position themselves now to take advantage of lower pricing and write more business in this market. To do so, they need the right understanding of property-catastrophe market conditions and strategies to navigate these conditions for their clients.
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