North America

Hurricane warning

There is more than a one in three chance of large hurricane catastrophe-losses in the US according to risk modelling consultancy, EQECAT. This conclusion is based upon analysis by EQECAT of current forecasts by the National Hurricane Center (NHC) which suggest 2005 is likely to be an “above average” year. NHC is a division of the US National Weather Service's Tropical Prediction Centre. Tom Larsen, a senior vice president of EQECAT, said that the most recent forecasts by NHC suggest 12 to 15 named storms are expected for 2005, with 7 to 9 becoming hurricanes, and 3 to 5 expected to be major hurricanes. The 2005 NHC forecast also suggests the accumulated cyclone energy (ACE) index of storms in the current season will be between 120% and 190% of the median value. “Although the current season might not be as severe and unusual as the 2004 season, the potential for large losses in 2005 is likely to be troubling to insurers and reinsurers, which will have to cover the potential hurricane damage claims,” Mr Larsen said. ACE is an index, which the National Oceanic and Atmospheric Administration (NOAA) uses, coupled with other information, to categorize North Atlantic hurricane seasons as being above normal, near normal, or below normal.