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The central and eastern Pacific experiences a lot of year-to-year variability in Sea Surface Temperatures (SST). Some years the water is much warmer (El Niño), and some years the water is much cooler (La Niña). The current phase of the El Niño/Southern Oscillation (ENSO) is approaching its peak warmth with near-record SST anomalies. This relatively predictable El Niño weather pattern should help the insurance industry prepare for weather patterns that could cause insured losses this winter.

Although the media often highlights the negative aspects of an El Niño weather pattern, there are many positives for the insurance industry: overall insurance loss data suggests that an El Niño weather pattern generally produces better financial results for the industry than a La Niña weather pattern.

Hurricanes, which are the largest cause of insured loss across the U.S., are a great example to show how El Niño has improved financial results. An El Niño weather pattern increases wind shear over the tropics, which significantly reduces the season’s Atlantic hurricane activity and therefore lowers the probability of a U.S. hurricane making landfall – ultimately leading to lower insured losses overall in El Niño years. However, as hurricane season ends and winter begins, El Niño may impact Florida weather, and consequently the insurance industry, in less financially favorable ways.

Previous El Niño patterns suggest that the Gulf Coast will see cooler and wetter conditions this winter; not because of numerous arctic outbreaks, but because of the stronger influence of the subtropical jet stream. Storm tracks will then move farther south producing more clouds and rain. On the positive side, more precipitation reduces the risk of wildfires across region. On the negative side, these conditions can also lead to severe weather that includes hail and tornadoes.

Figure 1 shows a comparison of storm tracks during El Niño versus La Niña years.

Figure 1. Winter storm tracks in El Niño versus La Niña years. (Source: NWS)

Figure 2 shows that the El Niño severe weather signal is most pronounced in central and south Florida and illustrates increased tornado reports from National Weather Service (NWS) local storm report data for the period, 1950-2014. El Niño years produce 77% more tornadoes than ENSO-neutral years and 53% more tornadoes than La Niña years. Further, it should be noted that Florida tornadoes typically occur in the evening hours which can increase fatalities.

Figure 2. NWS severe weather local storm reports between November and March during Neutral, La Niña, and El Niño years for the period 1950 to 2014 in Central and South Florida (NWS Melbourne, Tampa and Miami Warning Areas).

Property Claims Services report that Florida insured wind and thunderstorm event losses vary drastically between El Niño and La Niña years: a whopping 152% difference between an El Niño year and La Niña year, and an even greater difference (188%) between an El Niño year and ENSO-neutral year. The higher loss levels are driven partly by specific large loss events that impacted Florida during El Niño years. The following tornado outbreaks are prime examples:

• The 1998 February 22 – 23 “Kissimmee” outbreak continues to live in infamy as the deadliest tornado event in Florida history. In all, 12 tornadoes touched down across Central Florida. The strongest was rated EF3 and was one of the strongest tornadoes ever recorded in Florida.
• The 2007 February 2 “Groundhog Day” outbreak was deadly and costly for Sumter, Volusia and Lake Counties and for the insurance industry: it caused over $100 million in insured losses and damaged or destroyed over 2,000 structure.

Tornadoes are highly correlated to the other perils that result from severe thunderstorms, and these other perils such as hail can result in high insured losses. In fact, one of the costliest severe weather events in Florida history was during the 1991-1992 El Niño winter which produced large hail storms that hit the Orlando metro area on March 25. Some locations reported hailstones the size of grapefruit; other locations reported that small hailstones piled up inches deep. At the time this event was the largest insured disaster in the state history; it even topped the notorious hurricane Donna in 1960. Unfortunately, the devastating hail storm was soon eclipsed when Andrew blew through southern Florida later that year.

Of course, global factors other than the ENSO cycle complicate seasonal forecasting. From soil moisture in the U.S. to winds way up in the stratosphere and early winter Eurasian snowpack, these other factors sometimes cancel each other out. However, as shown above, the data suggest that although Florida has not seen the wind blow as a result of a hurricane in over a decade, El Niño could cause the wind to blow from severe thunderstorms that ultimately lead to potentially higher-than-expected severe weather losses across the state.

All week the discussion around the track of hurricane Joaquin has been about the uncertainty. Today the end game for Joaquin is much more certain as Joaquin has now started its northward movement away from the Bahamas where Joaquin grew to an impressive category 4 hurricane. Joaquin is the first category 4 hurricane to hit the Bahamas in October in 149 years (1866) and should easily cause billions in economic loss for the country.

The latest NHC advisory shows Joaquin gaining a bit of latitude, and most forecast model guidance now show that Joaquin will track northeastward away from the U.S. East Coast. There is only a small probability Joaquin will make U.S. landfall, and the NHC cone of uncertainty no longer touches the U.S. coastline. Nantucket, MA, has the highest probability of impact at 14%, with other northeast cities at a lower percentage. Overall, by Monday, Oct 8, Joaquin should be tracking between the U.S. northeast coastline and Bermuda as a weakening hurricane. It should be noted, however, that there is still a possibility that Joaquin could be captured by the coastal nor’easter moving up the coastline this weekend, which could pull Joaquin into New England. But again, the probability of that scenario is low.

There still remains a high flood threat along the East coast as Joaquin funnels tropical moisture northward. Rainfall totals will continue to increase across much of the East Coast with the potential that some locations could experience more than five inches of rain by the end of the weekend with a large part of South Carolina forecasted to experience 10+ inches of rain.

NOAA quantitative precipitation forecast 3 Day Forecast Rainfall amounts.

Minor coastal flooding is already occurring along the East Coast due to strong onshore winds being sandwiched between Joaquin to the south and strong Canadian high pressure to the north. That flooding will likely worsen over the next few days, regardless of the track of Joaquin.

Joaquin has generated more Accumulated Cyclone Energy (ACE ) in 3 days than all other Atlantic storms during the month of September. Joaquin might have been a bit of a surprise given all the talk that this season is an El Niño year and overall activity should be lower than normal. However, Joaquin did not originate in the deep tropics off the coast of Africa where El Niño has its greatest influence. Instead, El Niño had very little influence on Joaquin because of the location of its origin. Joaquin formed at 27.5 degree north latitude and moved southwestward toward the Bahamas where it was able to feed off the very warm waters of the Bahamas.

The Tropical Cyclone Heat Potential anomalies around are among the highest in the Atlantic basin along the East Coast which will support continued genesis of tropical systems if they form

With 59 days left in the Atlantic hurricane season, we need to watch for more storms like Joaquin that form without El Niño’s calming influence. There is very warm water off the East Coast which will continue to cause headaches for the insurance industry right through the winter. These warm waters can strengthen tropical systems like Joaquin and/or stronger nor’easters like we are seeing this weekend. Historical climatology data suggests typical October tropical cyclone development should occur in the western Caribbean, but given the hostile conditions in the deep tropics due to high wind shear from El Niño, the development will likely be closer to the U.S. Coastline and into the Gulf of Mexico.

Climatological areas to see tropical storm development and the likely tracks of that development

The quote above is often ridiculed, but it’s actually a brilliant description of Joaquin. In fact. the insurance and reinsurance industry are all too familiar with knowns and unknowns. Model uncertainty is part of doing business, and it is common knowledge that all catastrophe models have some degree of unknown error. There has been a push by insurance companies to funnel better location-level data into the catastrophe models in an effort to limit the overall model uncertainty in modeling risk at a location level.

Weather models are similar to catastrophe models in terms of uncertainty: uncertainties exist in every model run; but generally, the more detailed the input, the greater the accuracy of the output. Better input helps limit uncertainties. Already this year we anxiously awaited the arrival of a Tropical Storm Erika as a catastrophic hurricane to impact Florida hurricane, only to watch Erika fizzle a couple hundred miles south of Cuba.

View post on imgur.com

Meteorologist view after every new forecast model run for Hurricane Joaquin

I have highlighted the overall uncertainty in Joaquin’s forecast track all week. As anticipated, we have already seen the model and official forecast for Joaquin change drastically from east to west to back east.  Most arm chair meteorologist are unaware that behind the scenes increasing amounts of data detail are feeding the weather models to try to get a better picture of the overall atmosphere. Extra weather balloons are being launched at sites all over the Eastern U.S and Caribbean. NOAA and the U.S. Air Force have multiple aircraft sampling the environment in and around Joaquin. All this data is being fed into the weather model to hopefully limit overall uncertainty: just like in a catastrophe model.

Ironically, with more detailed input, the overall forecast for Joaquin has become more certain, but yet the overall track options for Joaquin extend past the National Hurricane Center’s (NHC) cone of uncertainty in this case.  In my opinion, Bermuda, which is not even in the cone of uncertainty, is just as likely as Boston to feel Joaquin’s impact.

In the short term, Joaquin will significantly impact the islands of the Bahamas as Joaquin will fluctuate in intensity as a major hurricane for the next 24 – 36 hours. As mentioned yesterday, after 36 hours the door is wide open for several different track paths. A U.S. landfall is still possible, but the new forecast models (that are being fed all this higher resolution data) suggest a more eastward shift in track away from a U.S. landfall.

I consider the ECMWF model (image below -Right) to be very good and reliable, and it illustrates Joaquin moving out to sea and closer to Bermuda. I expect by Friday we will have a much clearer picture of where Joaquin will track this weekend, and with that, insured impacts can start to be calculated.

American (GFS Model) left and the European (ECMWF Model) right ensemble runs which in total is over 75 separate model runs of possible tracks for hurricane Joaquin.

So until the track is known it’s best to focus on what is known:

Hurricane Joaquin rapidly intensified overnight and is now a Category 1 hurricane tracking west toward the Bahamas. As I wrote about yesterday, the forecast uncertainty for Joaquin is extremely high. The National Hurricane Center (NHC) has clearly communicated this uncertainty in their forecast discussions which I have quote below.

“Confidence in the details of the track forecast late in the period remains very low, since the environmental steering currents are complex and not being handled in a consistent manner by the models. Given that a wide range of outcomes is possible, it is too soon to say what impacts, if any, Joaquin will have on the United States.”

Further, the Director of the NHC tweeted:

Until models are consistently in better agreement, the direct impacts, if any, of #Joaquin on US are very uncertain. http://t.co/CrL5cUYcVV

— Dr. Rick Knabb (@NHCDirector) September 30, 2015

Although uncertainties exist, I think it is safe to warn about what the known impacts will be “IF” Joaquin approaches or makes landfall along the East Coast.

We do know that hurricane Joaquin is now located 215 miles east-northeast of the Central Bahamas and will continue to strengthen into what will likely be a major hurricane off the East Coast by Saturday. In fact, water temperatures near Joaquin are currently at all-time record warm levels and could, if all other factors align, easily support a Category 5 hurricane. In fact, a high-end Category 3 or 4 is now likely for Joaquin, which would pack sustained winds of more than 120 mph over the Bahamas. However, it should be noted that regardless of the hurricane’s strength over the Bahamas, as hurricanes move northward out of the deep tropics, climatology suggests they tend to weaken and speeds up. How much Joaquin could weaken is still unknown. Therefore it is still premature to estimate a landfall location and insured impacts along the East Coast.

Regardless of storm strength, as an East Coast hurricane, Joaquin will create large waves, and the stronger the hurricane, the larger the waves will be. In this case, a constant on shore flow will cause extensive beach erosion along the coastline and impact coast properties.

GFW wavewatch model with 45-50 foot waves off NC coast, 20 plus all the way to Long island by early Sunday AM

Depending on the final track and if Joaquin makes landfall, a large storm surge will likely accompany Joaquin. In fact, the devastating current possibility that Joaquin could track up the Chesapeake or Delaware Bays can’t be ruled out. This type of storm track has been modeled to produce devastating storm surge for these coastal bay waters, and the already high water levels from rainfall and a near super moon will not help the situation.

In addition to the torrential rainfall currently impacting much of the East Coast, some models are forecasting more rain depending on Joaquin’s forecast track. Some forecast models produce an additional 8 – 10” of rain on top of saturated ground. And with already high river levels, some major river flooding can be expected.

A foot of rain—or more—is possible across much of the East Coast this week as Hurricane Joaquin approaches.

In summary, the uncertainty in the current track forecast cannot be understated, and it is not even represented well by the official track forecast by the NHC. Unfortunately in this situation, the spread in the forecast models is far greater in size than the cone of uncertainty in the official forecast by the NHC. As the image below shows there are still several models including the very good and reliable ECMWF (not shown) that take Joaquin out to sea.  I expect by Friday we will have a much clearer picture of where Joaquin will track this weekend, and with that, insured impacts can start to be calculated.

GFS Ensemble model shows 2 distinct solution clusters for storm tracks Door #1 up the east coast. Door #2 out to sea.

As you might have noticed TS Joaquin has been named by the NHC and is currently 425 miles East Northeast of the Bahamas.

I have been saying since the start of the season the main threat this year is along the East Coast of the U.S which follows the pattern over the last several years. Joaquin is forecasted to move closer to the East Coast this week and with it is the threat of a tropical system impacting the East Coast of the U.S. Though the forecast remains very uncertain, heavy rain, coastal flooding and strong winds are possible for the Mid-Atlantic and Northeast starting Friday with upwards of 12” of rain are forecasted to fall by the end of this weekend regardless of the strength of Joaquin.

Though it’s too soon to tell exactly where the storm will head and how strong it will get by the weekend, the possibility remains that Tropical Storm Joaquin could become a weak to major hurricane just off the Eastern Seaboard on Saturday morning. Much like we saw with TS Erika earlier this year the forecast models are handling this storm poorly and there is extremely low confidence in the forecast at this given time.

Above is view of the very wide range in the model forecasts for the storm’s future track. This makes identifying a “most likely” track all the more challenging. Note the tremendous divergence of possibilities, including several models that hook this storm toward the left (west), with potential landfall anywhere from the Outer Banks to Boston. The NHC OFCL track is in the middle of the guidance.

The intensity forecast remains equally problematic. The guidance spread is shown above, which shows the official NHC OFCL intensity remains conservative at 70 mph as the storm comes within striking range of the Mid-Atlantic coastline.

But a sizable number of models do intensify this storm into a Category 1 or 2 hurricane, which the National Hurricane Center notes in their discussion. The rationale for strengthening is the potential for wind shear over the storm to decrease. Wind shear is detrimental to tropical cyclones, and if it weakens it could allow the storm to strengthen to its full potential over the warm waters which are currently at the warmest levels ever measured since weather records began in 1880.

Regardless of the forecast model of the day. The situation is ugly with a similar set up that brought Hurricane Sandy up the East Coast of the U.S in the fall of 2012 which leads me to think the probability of Joaquin impacting the East Coast of the U.S. is higher than the storm tracking out to sea. I also feel the NHC is too conservative on intensity and the NHC should adjust this upward over the next few days.

Even if Joaquin doesn’t make landfall as a hurricane or tropical storm, this meteorological setup is nearly ideal for a high-impact flood event later this week across the core of the Northeast and Mid-Atlantic. Comparing the current pattern with similar historical weather patterns, one of the leading analogs right now is Hurricane Irene in 2011, which produced catastrophic flooding in upstate New York and New England. Other matches include the merging of Tropical Storm Tammy and a subtropical depression in October 2005 and the remnants of Tropical Storm Nicole in 2010. Therefore the rainfall of the 10” – 12” in parts of East Coast states will lead to some of the worst flooding not seen in several years.

Again, there is significant uncertainty in the forecast for this storm, and we will probably continue to see the models toss and turn over the next 24 to 48 hours. Big swings in track and intensity are possible. Social media is abuzz with discussion of a big East Coast hit, but any serious discussion should be tempered at this point concerning specific model solutions. This is something to watch and monitor closely for the rest of this week as this complex forecast situation resolves.

Tropical Storm Erika continues to defy forecasts made earlier in the week. At this point in time Erika was supposed to be much further north of the island of Hispaniola and in a much better overall environment for intensification. However, Erika is currently 90 miles southeast of Santo Domingo, DominicaRepublic, in an environment that is not at all conductive to tropical cyclone development.

TS Erika NHC forecast made Tuesday afternoon showing the track error as Erika continues to defy forecasts

This further westward movement calls for drastic changes to the probabilities forecast options provided in my last update as we play another round of model roulette. In the last update I highlighted the overall uncertainties in tropical cyclone forecasting, and Erika has definitely met expectations with regard to those uncertainties.

Tropical Storm Erika continues to battle an incredibly unfavorable environment. The wind shear, which acts to tear apart tropical cyclones, is already quite strong – about 20 mph from the west – and it is forecast to increase to nearly 30 mph today. That amount of shear is hard for a well-developed storm to fend off, and Erika isn’t even well developed , which increases the overall probability of dissipation.

Erika is in a area of 20 kts shear and is moving into an areas where shear could be as high as 30 kts. Tropical storms / hurricanes don’t like areas of high shear.

If Erika manages to make it over the mountains of Hispaniola intact and fight of this high shear area, she could quickly intensify again in the extremely warm waters off the coast of Florida. In fact history would suggest a tropical storm tracking up the west coast of Florida could be quite destructive such as the 1935 Labor Day hurricane.

Here is my updated break down of Erika’s forecast options at the moment:

• Stalled hurricane in the Bahamas (0% chance) – Unlike the last update, this is now the least likely option for Erika, given its westward track.
• Hurricane landfall in south Florida (30% chance) – A category 1 hurricane near south Florida on Monday morning with the storm stalling over the state of Florida during the middle of next week.  This would caused 6-8” or rain to fall over much of the state.
• Tropical storm landfall in south Florida, but a hurricane on the Florida panhandle (35% chance) – Maintain a west-northwest heading, gradually intensifying and heading for south Florida as a tropical storm. Then tracking into the western Gulf of Mexico and becoming a hurricane along the west coast of Florida and into the Florida panhandle.
• Death in the Caribbean (35% chance) – Failure to reach the mainland U.S.; and the storm stays further south and tracks over Hispaniola, Cuba, and maybe even northern Jamaica.

Once again there are forecast uncertainties and one can’t rule out Erika playing more forecasting tricks over the weekend as this weak disorganized system tries to stay alive. Hispaniola is historically a tropical cyclone blender.  If the NHC forecast is correct with a tropical storm landfall or close encounter to Florida much of the state may well be affected by the storm’s rainfall.  The last tropical cyclone to make landfall on south Florida was tropical storm Bonnie on July 23, 2010. Before that, the previous one was tropical storm Ernesto on August 30, 2006.  So indeed named storm activity has been very sparse since the wild 2004 and 2005 seasons.

Remember that  tropical storms are still quite capable of causing flash floods and power outages, as well as coastal erosion and flooding, and the winds can throw around unsecured loose objects. Tropical cyclones can also cause insured loss, case in point tropical storm Bill impacting Texas earlier this June.

Looking ahead there are no other tropical systems that should develop in the Atlantic Ocean next week.

Since my last update on Monday at noon, Erika has formed into a tropical storm and is tracking toward the Bahamas. Erika is currently 285 miles east of the island of Antigua in the western Caribbean. Tropical storm watches and warnings are out for many of the northern Caribbean islands. However, the headliner is that for the first time in three years, Florida is under the National Hurricane Center’s (NHC) forecast track cone of uncertainty. With a Florida landfall probability of 30%, there is a very real possibility that the 10-year Florida landfalling hurricane drought could end.

However, I must remind all readers about the overall uncertainties with forecasting hurricanes more than five days in advance. The uncertainty exists for a few reasons. First, the NHC track forecast errors over the past five years are 180 miles at day 4 and 240 miles at day 5, which are represented in the NHC cone of uncertainty. Secondly, intensity errors can also be large. Finally, this season is an El Niño year, which seem to be notorious for major hurricanes that start late in their careers. Betsy in 1965, Alicia in 1972, and Andrew in 1992 all took time to develop, but each El Niño year resulted in a major hurricane.

To demonstrate how a forecast can change look at what happen 10 years ago today as Katrina was moving off the Coast of Florida. In the loop below you will notice how the NHC forecast cone of uncertainty on Auguest 26th 11 am 2005 change in just a 12 hour period. This pivotal shift in Katrina’s forecast track occurred on Aug 26, 2005 moving from a FL panhandle landfall to LA/MS.

The forecast models for Erika are currently all over the place. Many meteorologist and various media outlets may continue to play model roulette, but the fact remains that Erika’s forecasted track and intensity is uncertain. Further, as I highlighted on Monday, we have to consider Erika’s overall weather pattern in light of the fact that the peak of the hurricane season is just 15 days away. Forecasters need to consider El Nino characteristics which include tropical waves and storms that may struggle in the main development region of the Atlantic Ocean. But as these storm move closer to the U.S. coastline, they will be more likely to develop and strengthen. These factors can’t be seen in any one forecast model run.

With Erika still 1,500 miles away from Miami, tropical storm Erika is still disorganized. However, Erika has plenty of time get organized. At this time, several factors support a gradual strengthening of Erika:

1. The vertical wind shear, which can tear storms apart, is not very strong. However, until Friday, wind shear will continue to limit development. So if Erika can survive wind shear this week, as discussed in Monday’s write up, the change in the weather systems will cause shear to decrease as Erika tracks closer to the U.S.
2. Less environmental dry air is getting wrapped into the circulation, which can disrupt thunderstorm development.
3. The ocean temperatures below the storm are becoming increasingly warm.
4. The ocean heat content is increasing along the storm’s forecast track.

Lots of hurricane SST heat potential in the Bahamas, SST’s are 29-29.5 degrees Celsius. Could mean rapid intensification

Here’s how I’d break down Erika’s forecast options at the moment:

• Death in the Caribbean (5% chance)  – Failure to reach the mainland U.S.; storm stays further south and tracks over Puerto Rico, Hispaniola. But it’s looking less likely at this point.
• Weak tropical storm landfall in the Florida panhandle (15% chance) – Maintain a west-northwest heading, avoiding the Greater Antilles, and gradually intensifying and heading for south Florida as a tropical storm (then tracking into the Gulf of Mexico and becoming a hurricane along the west coast of Florida).
• Hurricane landfall in south Florida (30% chance) – A Category 1 or 2 hurricane near south Florida on Monday (as suggested by the historically accurate European model (ECMWF), along with the high-resolution U.S. Hurricane Weather Research and Forecasting (HWRF) model). The HWRF model has been especially insistent on this.
• Stalled hurricane (50%) chance. – Maybe at this time, the most likely scenario would be a hurricane tracking over the Bahamas near Florida where it will get trapped by weak atmospheric steering currents for a few days.

850mb wind and surface pressures from four dynamical models, all valid on Sunday evening. (tropicaltidbits.com)

It is important to note “impacts” of hurricane can occur many hundreds miles away from the cone of uncertainty: rain, storm surge, and strong winds could certainly occur outside of this cone.    In the next post I can start to focus in on the insured impacts.

Fun Fact:
In addition to frequent flights into Erika by hurricane hunters, a NASA Global Hawk drone was scheduled to embark on a 24-hour mission in and around the storm on Wednesday.

This is a quick tropical-storm update for the group as activity in the Atlantic Ocean heats up this week.

You might have noticed named storm Danny is no longer a threat and has been discontinued by the National Hurricane Center (NHC). Instead, it is now an open tropical wave as it approaches the southern shores of Hispaniola. However, there is a very slight chance that this open tropical wave could become better organized once again as it approaches the southern Gulf of Mexico this weekend, but this is a long shot at this point in time.

The new concern is a tropical wave that emerged off the West Coast of Africa last week. This tropic wave is currently has a 90% chance of development according the NHC and should be named storm Erika by tomorrow. The low pressure system is located about 1,250 miles east of the southern Lesser Antilles.

Why should soon to be named Erika be more of a concern than Danny?

First, this tropical wave is at a higher latitude. Danny started out at a latitude of 10.6 degrees north while this new tropical wave is at a latitude of 14.6 degrees north, which is a better location for intensification. Further, climatology indicates that this latitude is more likely to create a U.S. threating storm.

Secondly, Danny also was surrounded by dry, dusty air which limited its development in size and intensity. This new tropical wave will not have to fight as much of this dry, dusty air.

Dust and dry air as Danny was forming last week.

Dust and dry air as TD5 is trying to organize.

Notice how much less dust and dry air is around this tropical wave versus the dust and dry air around Danny last week.

Thirdly, an upper-level trough has brought a taste of fall to much of the East Coast. As the trough slowly lifts out of the East Coast this week, upper-level winds will be much more conductive to less shear in the Atlantic Ocean.

ECMWF 5 day anomaly chart which suggests cooler temperatures lower air pressure (blue area) along the East Coast of the U.S.

ECMWF next weeks (Day 5 – 10) anomaly chart which suggests warmer temperatures and higher air pressure (orange area) along the east coast of the U.S.

As you can see, next week’s forecasted weather pattern is much different than this week’s. Although there is some uncertainty in the track and intensity with any named storm forecast. Overall, next week’s weather should allow what will be Erika to track much further northwest ward toward the Bahamas as a hurricane. In fact, Erika could be a major hurricane by the time it reaches the Bahamas on August 30th given the warm sea surface temperatures near the islands. It is a bit early to determine how much of a U.S. landfalling threat Erika will be, but most storms near the Bahamas need to be watched, and this will be the case the first week of September.

0z Aug 24 HWRF model Run Erika

The HWRF model, which did a great job with the intensification of Danny late last week, This model now provides a view of my general thinking as Erika tracks towards the Bahamas.
HWRF modeled 126 hour forecasted wind speeds of soon to be Erika.

Named Storm Fred could also develop behind Erika later this week, but let’s worry about Erika first.

Updates as needed or ask if you have questions.

After the long winter much of Eastern North America experienced, it is sad to say we are rapidly approaching mid-summer. This also means we are past the climatological peak of the U.S. severe weather season, and fast approaching the peak of the Atlantic hurricane season which occurs around September 10th. To many it may seem that the severe weather season has been an active one, while the hurricane season, to this point, has been a yawner. The data suggests, however, that the complete opposite has occurred.

U.S. Severe Weather Season

In terms of local storm report counts from the Storm Prediction Center, this year’s severe weather season has been below normal. The most noteworthy events are attributed to the above normal, and sometimes record breaking, precipitation in the Central Plains and Ohio River Valley which resulted in widespread flooding. In a normal severe storm season, defining events would be attributed to hail/wind/tornado events and not large precipitation events. According to one source, the number of flood losses, or more specifically sewer backup claims, are outpacing hail claims this season.

For the 1st time, Water Damage leads Hail in Claims Opened for the 1st half of a year. Combo of sewer probs, flood & frozen pipes.

— Bryan Wood (@bryanwx) June 9, 2015

As many of us know, flood damage is often excluded under standard homeowners, renters, and business insurance policies. Due to this and the overall lack of severe weather, it is not surprising that insured losses to date are also below normal. In fact, PCS wind and thunderstorm insured losses are still falling below the 10 year average ($9.3 billion) by 53.5%. As of July 9th, $5 billion in insured losses have been reported with two outstanding wind and thunderstorm events. This season, we have yet to see a marque severe weather event causing over $1 Billion in insured loss. Comparing to previous storm seasons, one has to go back to 2005 to be this late into the severe weather season without experiencing a $1 Billion dollar insured loss event.

The severe weather outbreaks this season have been limited due to fluctuating weather patterns, resulting in below normal insured loss. A similar pattern, if it persists, should provide more episodes of severe weather, with less risk of tornadoes and a higher risk of high wind events (derechos) across northern states. This suggests that a marque severe weather event ($1 billion or larger insured loss) is unlikely as we finish out the season. Since 2001, only one marque event has occurred after July 10th which was the Phoenix hail storm in the Fall of 2010.

Atlantic Hurricane Season

Although North Atlantic hurricane activity has been quiet since Tropical Storm Bill (Texas landfall, June 16th), the development of named storms is a major weather concern for the insurance industry. This year, there has already been two named landfalling storms with Bill being the first PCS hurricane event since Sandy in 2012. To see a similar landfall activity before June 16th, one has to go back to 1871.

In terms of Accumulated Cyclone Energy (ACE) year to date, as of Monday July 6th , the basin was running 314% above normal. As we approach the peak of hurricane season, every day that passes without activity will decrease what started out to be a very above normal year statistically. As of July 10th, the North Atlantic ACE is already down to 157% above normal.

Summary of the most recent 2015 North Atlantic season forecast

All forecasts continue to point to a below normal season with many negative factors weighing in on why named storms will have a difficult time developing in the Atlantic basin. Namely,

• Lowest 12 month running average of the Atlantic Multi-decadal Oscillation since 1995. This would suggest that the presence of cold seas surface temperatures in the main development region of the Atlantic basin results in less energy for named storms.
• The developing El Nino in the Central Pacific has created some of the highest wind shear values in the Caribbean since 1979. As a result, tropical convection is not sustainable.
• The Saharan Air Layer (Dust) has been very strong so far this season and should continue to be strong into the heart of the hurricane season. This will limit tropical convection development.

Insurance Industry Action Items

Long range seasonal forecasts still call for named storm development regardless of the negative factors listed above. In fact, some forecasts call for the expected development of named storms closer to the U.S. coastline, similar to areas impacted by Tropical Storm Bill and Ana. In an El Nino year, insured losses are typically lower than average; however, it only takes one significant event to impact the industry.

The insurance industry should keep an eye on the Madden-Julian Oscillation (MJO), which is a large scale oscillation that propagates eastward across tropics of the globe. When an area of the tropics is under the influence of the MJO, it tends to enhance tropical activity. This year already, we have seen two strong MJO pulses partially trigger two different clusters of named storm development in the West and East Pacific. Carriers can track the MJO to get a better idea of when heighten activity could start to occur in the tropical Atlantic basin. The current MJO appears to be moving into the East Pacific region now, and if it sustains itself, could enhance tropical convection in the Atlantic basin toward the second half of July. This could allow the insurance market to take advantage of LiveCAT markets to protect specific programs.

The other area of concern for U.S. carriers could be Hawaii which has seen an unusual amount of hurricane activity over the past three years. Tropical Storm Flossie passed within 100 miles of the islands in 2013, and an unprecedented three hurricanes in one year passed within 200 miles of Hawaii in 2014. Statically speaking, named storms are about 3 times more likely to come within 100 miles of Hawaii in El Nino year versus in a La Nina year. Keep this in mind knowing that there is an El Nino strengthening in the Pacific.

As we approach the climatological peak, I want to provide an update on the North American severe weather season and paint a picture of what the rest of the season might yield.

Besides the latest round of severe flooding in the South Central U.S., there has not been a noteworthy severe weather event this year. Likewise, there has not been a PCS Wind and Thunderstorm Event bulletin over a billion dollars yet. 2005 is the last year a severe weather season was without a billion dollar event this late in the season (understanding that the 2015 data is still preliminary, future loss development is likely and three events yet to have estimates issued).

Overall, the loss sum of all PCS Wind and Thunderstorm Event bulletin (10) is still running 41% of what would be normally expected by this time of year. This also equates to the slowest loss start to the severe weather season since 2007.
This overall lack of severe weather also shows up in the Storm Prediction Center severe weather reports for tornadoes, wind and hail, all of which show they are trending below the 10-year average report count.

As you might have seen in the media, the South Central U.S. has seen its fair share of rain, which has now reversed the drought conditions that had persisted in the region since 2011.   Flood damage is excluded under standard  homeowners, renters and business insurance policies. Flood coverage is available as a separate policy from FEMA National Flood Insurance Program and from a few private insurers.  However, with 8.8 million households in Texas and only 600,000 flood insurance policies, which are mostly coastal I suspect,  the flood aspect is largely uninsured event outside auto insurance policies.  As the Insurance Council of Texas told A.M. Best  auto insurance losses alone are likely to exceed the Correction: The actual figure is $250m or greater (not $1bn) , there was an incorrect figure in the A.M. Best article Artemis sourced the data from.

Highly correlated with this heavy rain for this time of year would be thunderstorm activity, and this region is where the thunderstorm activity has occurred. But like overall PCS losses, Texas is still running below the 10-year loss average for this time of year with total losses running at a similar level seen over the last three years with further loss development to occur with three more PCS events.

We can speculate about why such heavy rains have impacted the south-central states. The heavy rains can be partly attributed to much warmer than normal sea surface temperatures in the Gulf of Mexico and an active southern jet stream flow from the evolving El Niño in the eastern Pacific. El Niño is a state of the El Niño Southern Oscillation, which is essentially a slowly varying oscillation of currents in the equatorial Pacific Ocean that can either direct warm waters towards the eastern Pacific (El Niño), or towards the Western Pacific (La Niña). El Niño conditions are now established, and I would expect El Niño conditions to prevail through the remainder of this summer and into the fall.  This, combined with the warm Gulf of Mexico sea surface temperatures (concern for hurricane season also), means that more wet conditions will likely be in the cards for the Southern Plains – at least through June and possibly into July with the slow drift of  storms and moisture into the Central Plains in July.