Atlantic basin, U.S. and Caribbean landfall activity rates over the 2006–2010 period: an insurance industry perspective

Atlantic hurricane activity has been particularly high since 1995, with nine seasons recording more hurricanes than the long-term average. The recognition that current activity is not the same as the long-term historical average means that, for the purpose of catastrophe risk assessment, we need to be explicit as to the time period over which expected activity is evaluated.We have chosen to explore activities over a 5-yr forward looking time window, which bounds the range of business applications for which catastrophe loss models are employed. This time horizon is also shorter than the pattern of past multidecadal periods of high and low activity.

The methodology used to assess activity rates for the next 5 yr contains a blend of statistical analyses and an expert elicitation. A panel of experts was convened to discuss expected levels of activity for the next 5 yr across the Atlantic, along the U.S. and Caribbean coasts. The results indicate hurricane activities along the U.S. coast are expected to be between 20 and 35% higher than the long-term average, depending on storm intensity. The implementation of these findings has included work to determine how increases are distributed by track type and by region, and the impacts on expected losses.