Hurricanes, particularly Harvey, Irmaand Maria, alongside other catastrophe events last year wiped out anumber of reinsurers' profitability for the year and drove thesector's profitability to its lowest level since 2005. (Image:National Hurricane Center/NOAA).
Experts predict that this year's hurricane season storm activitywill be near historical averages for the Atlantic Basin, a regioncovering part of the North Atlantic Ocean, the Caribbean Sea andthe Gulf of Mexico, according to a new report from Moody'sInvestors Service.
|Cooler than average sea-surface temperatures (SST) across thetropical North Atlantic, strong trade winds and sea levelpressures, and a neutral or weak El Niño could result inan average season this year, which officially runs from June 1 toNovember 30.
|Related: New York, Boston face coastal flooding due toabove-normal tides
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Hurricanes and other catastropheevents last year wiped out a number of reinsurers' profitabilityfor the year and drove the sector's profitability to its lowestlevel since 2005. (Photo: Moody's)
Signs point to a less active season
On average, the forecasts call for 13 named storms during the2018 seasons, with about six of these storms becoming hurricanes,of which three could major hurricane status.
|According to the National Oceanic and Atmospheric Administration,near-average SST and a nonexistent or weak El Niño duringthe peak of the season (August to October), point to a less activeseason. A key factor behind the evolution of the Atlantic hurricaneseason is the Atlantic Multi-Decadal Oscillation, which sets thebackground for other climate patterns, suchas El Niño.
|Related: Hurricane Bud prompts storm watches on Mexico'sPacific shore
|Down, but not out
Hurricanes, particularly Harvey, Irma and Maria, alongside othercatastrophe events last year wiped out a number ofreinsurers' profitability for the year and drovethe sector's profitability to its lowest level since 2005.However, capital levels were not significantly affected, with onlya few mid-tier reinsurers focused on property cat and specialtybusiness reporting capital decreases at year-end 2017.
|Following one of the most expensive catastrophe loss years onrecord, U.S. property catastrophe reinsurance pricing experiencedonly moderate increases on loss affected accounts, suppressed byoverabundant capacity and intense competition from alternativesources, which were able to reload quickly following last year'sevents.
|Related: The 2018 hurricane season is here: Are youprepared?
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