We are slightly past the halfway point of the 2021 Atlantic hurricane season, and its already living up to forecasts predicting a 'wild,' above-average season: Tropical Storm Ana, which formed on May 22, made 2021 the seventh consecutive year that a tropical cyclone has formed before the official June 1st start of the season. Also, June 2021 is now tied with 1886, 1909, 1936, and 1968 as the most active June on record, with three named storms forming. Additionally, Hurricane Elsa became the earliest-forming fifth named storm on July 1, surpassing the record set by Tropical Storm Edouard in 2020.
As each year produces another record-breaking hurricane season after another, what does 2021′s activity so far signal to the insurance industry?
According to James P. Kane, SVP, national personal risk practice leader at USI Insurance Services, the biggest impact from this hurricane season will be the added stress on the property insurance market. "The wildfires out West have already put enormous pressure on capacity, pricing and coverage terms. The active hurricane season and Hurricane Ida will only increase the difficulties in the property insurance segment of our business," he tells PropertyCasualty360.com.
Although there is nothing particularly unique about this year's hurricane season, Kane, who also serves as a board member of the Private Risk Management Association (PRMA), notes that the severity of storms is the new normal — just consider how Ida caused multiple tornadoes in N.J. However, severe recent storms present lessons to the insurance industry about how to approach major weather events.
"The solution to the insurance crisis requires government, the insurance industry and clients to join forces to improve the eroding results, [including] better risk management of home construction near coastlines and open land subject to wildfire; better building codes and enforcement, [and] increased focus on loss control at the client level," Kane says.
Kane also suggests ways the insurance industry and communities can reduce future storm losses, such as implementing more wind-resistant measures for roofs and points of access to a home, improved loss control for storm surge, and leveraging advanced technology and modeling for more granular underwriting of weather risks.
For a mid-season recap of the 2021 Atlantic hurricane season as of September 7, explore the infographic above.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.