May Tropical Update

Seasonal Hurricane Forecast Skill

Seasonal hurricane forecasts, with varying lead times, have been produced in the Atlantic basin since 1984 by the late Dr. Gray from Colorado State University (CSU).  Partly as a result of the early success of those forecasts, seasonal named storm forecasts are now a dime a dozen with many different research and operational groups making seasonal hurricane forecasts for tropical basins around the world.  Although there are some very brilliant minds making these forecasts, some might argue there has been little skill improvement over the last several years. The insurance industry is accustomed to using climatology to understand the risk of a U.S. landfalling hurricane.  This climatology also suggests, on average, the more active the overall Atlantic basin hurricane season is, the greater the probability of U.S. hurricane landfall which can be useful guidance to the insurance industry heading into the hurricane season. However, when it comes to seasonal landfall forecasts, really no skill has been demonstrated; this is ultimately what matters for the insurance industry.  In fact, there isn’t a forecast group that has skillfully predicted the current drought in major hurricane strikes over the last 11 years.

CSU Atlantic Basin wide hurricane forecasted and observed hurricanes with missed forecasted number shown.

CSU provides easy access to historical forecasts which allows for simple validation of there seasonal forecasts.  In a simple analysis, the CSU forecast has done fairly well with their April predictions when compared to using historic climatology (6.5 hurricanes per year) .  Fourteen CSU forecasts since 1995 have come within three hurricanes of the seasonal hurricane total in the Atlantic Basin.  On seven occasions, they have only missed the cumulative number by one.  They hit the mark in 2008.  Of course, CSU have posted a few wayward forecasts as well: 2005 (undershot the total by eight hurricanes) and 2012 (fell short by six hurricanes).

CSU Atlantic Basin wide major hurricane forecasted and observed hurricanes with missed forecasted number shown.

Regarding the major hurricane forecasts, CSU has made seven forecasts that failed to fall within two storms of the final tally. This should not obscure the fact that they’ve also posted four perfect forecasts of major hurricane occurrence and 13 others that approximated the seasonal total within one storm.
It is very easy for one to sit back and grade objective season hurricane forecasts like CSU, and there is no doubt a lot of work goes into the refinement of these forecasts each year. I am a firm believer that seasonal forecasts and even landfall forecasts will improve over time. Currently, many of these seasonal forecasts are statistical schemes which will inherently fail some years. There is some promise that a hybrid of statistical and dynamical forecast could be the future of seasonal hurricane forecasting.

https://www.gfdl.noaa.gov/hyhufs/

The Real Value – Landfall Forecasts

As mentioned, the real value to the insurance industry is in getting an accurate picture of potential landfalling storm activity. CSU issues probabilities for landfalling hurricanes across various regions of the U.S. This year, they are forecasting a 75% probability of a hurricane landfall. The probability of landfall for any one location along the coast is very low and reflects the fact that, in any one season, most U.S. coastal areas will not feel the effects of a hurricane no matter how active the individual season is. And, given the variation of exposure along the coast, providing accurate estimated insured loss ahead of season is very difficult if not impossible.
However, given the current state of the science of seasonal forecasting it is possible to provide guidance to which area of the coastline will see a higher than normal probability of landfall. This year, landfall forecasts may prove to be one of the more challenging years. This is due to the large amount of uncertainty of many of the climate forcers used to predict Atlantic named storm activity. One of the most common climate forcers used is El Niño Southern Oscillation (ENSO) and, this year, many forecasts are uncertain if an El Niño event will take hold during the summer, which historically suppresses hurricane activity. CSU thinks an El Niño will be weak or moderate by the peak of the Atlantic hurricane season based on their April forecast. However, as mentioned a few weeks ago, spring El Niño forecasts can be notoriously misleading, and result in difficult forecasts. (This phenomenon is so familiar that it has its own name – the “spring predictability barrier”.) Over the last few months many of the monthly climate models have backed off of the idea of a strong El Niño during the peak of the Atlantic hurricane season and now have a weak to neutral ENSO condition. If the El Niño is weak, it could result in increased landfall chances, and El Niño historically has little to do with any activity in the Western Caribbean / Gulf of Mexico and any activity in this region increases the chances of U.S. landfall.

Official Climate Prediction Center ENSO probability forecast for Mid-April (Top) and Early May (Bottom) Showing in just a half of month the probability of a El Niño during the hurricane season (Gray Box) went form 70% to below 50%. There is an increasing signal that ENSO will be neutral during the hurricane seasons.

The other challenge this year is that earlier this spring, water in the far North Atlantic and water off the coast of Africa had a relatively cold signal which is potentially indicative of a negative phase of the Atlantic Multi-Decadal Oscillation (AMO).  However, over the last month or so, the Atlantic water has warmed substantially.  This continues the debate as to whether the AMO has switched to a negative phase.  The U.S. government suggests the Atlantic is still in a positive state, whereas the CSU data suggests the AMO has trended negatively over the past few years.  If water continues to warm over the main development region, like it has over the last month, it could allow more storm formation in the heart of the hurricane season.

NOAA SST anomaly (degree C) for 4/10 (left) and 5/11 (right) showing a warming of SST off the west coast of Africa off the East Coast of the US. The cold SST in the North Atlantic have expanded and SST after months of above normal in the Gulf Of Mexico have recently turned colder than normal which should be short lived.

Another factor that has had a large influence on named storm activity over the last few years has been the Saharan Air Layer (SAL).  Named storms interact with the SAL in several ways.  Some named storms get embedded in the SAL their entire life-cycle and often struggle to intensify beyond strong tropical storm strength.  Other named storms can be overrun by the faster moving SAL and are quickly weakened.  The SAL in general can hamper convection, making it hard for named storms to develop.  This year could be similar to the last couple of years which would hamper development of named storm activity in the main development region but, as tropical waves get closer to the U.S. and Caribbean, the SAL decreases, and conditions become more favorable for development outside of the SAL.

SST anomaly for 5/11 showing warmer than normal SST around Hawaii.

Not to forget about Hawaii, which is also a target for named storm activity and, like the U.S. mainland, has gone a long time without a major hurricane impact.   This year, the insurance industry should also keep an eye on this 50th state as, just like the warm sea surface temperature (SST) off the East Coast of the U.S., the SSTs are above normal near Hawaii, and any tropical activity that might come close to the islands could be enhanced by these warmer than normal SSTs.

Summary
Forecasting of Atlantic named storm activity is not easy, and CSU has demonstrated variability in skill year over year, with no real improvement in the April seasonal forecasts over the last several years, but overall there is skill improvement over using basic climatology. Although some forecasts are currently calling for below normal activity in the Atlantic basin, climate forcers are pointing toward the ideas that these forecasts will be adjusted upward as we approach June 1 to a more active or normal season. The major climate forcers suggest there could be less development in the main development region of the Atlantic but, as tropical waves move closer to the U.S., they could have a better chance at developing, due to lack of wind shear and lower SAL environment. SSTs near the U.S. coastline are also expected to be warmer than normal which would add fuel to any disturbances that develop. Therefore, parts of the U.S. coastline have a higher probability of a landfalling named storm this season, with the Mid-Atlantic and Northeast seeing the highest chance.
Resources:
Barcelona Supercomputing Center has a nice summary of the various Atlantic Hurricane Forecasts
http://www.bsc.es/ESS/seasonalhurricanepredictions/
NOAA Climatology Products – Avg Start Dates, Return Periods, Develop Origin by Date, Strike Density
http://www.nhc.noaa.gov/climo/
CSU U.S. Landfalling Hurricane Probability Project
http://www.e-transit.org/hurricane/welcome.html

May Severe Weather Update

The Onslaught of Severe Weather
Last week I posted some general ideas of what to expect over the next few months and briefly touched on U.S. severe weather. In this update I will provide a bit more detail on 2017 severe weather and what to expect over the next few months.
As mentioned in my last blog, this year is off to a record pace in terms of severe weather reports and U.S. insured loss. In fact, if you think a major severe weather event is occurring about every week so far in 2017, you’re likely correct as there have been only four severe weather free weeks so far in 2017 according to PCS wind and thunderstorm event designations.

Highlighted dates in 2017  in which PCS has a wind  thunderstorm designations

Historically, in terms of number of PCS wind thunderstorm events, the activity has been unprecedented with 19 events so far, which is 271% above the average number of events that have occurred since 2000.

Number of PCS event designations by year as of May 1

 

January – April Wind and Thunderstorm PCS losses in billions adjusted for CPI by year.

However, in terms of insured loss it is difficult to estimate how the recent PCS events might develop. Given the wide scope of impact, it would be safe to say at least another billion dollars (or two) could still be expected to develop from existing PCS designated events that have occurred at the end of April.  If this development occurs, insured loss through the end of April would be at a historically high level. However, it would be far lower than the costly severe storm year of 2011, where the loss was driven by the deadly April tornadoes in Alabama and the Joplin, Missouri tornado in May.  This highlights the remarkable luck that has occurred with tornado related insured loss over the last several years and especially this year since reports of tornadoes are running above normal for the first time since 2012.

Since the U.S. has not experienced a major marquee tornado loss this year, most of the insured loss continues to be related to hail or localized wind damage with smaller tornado losses mixed in such as the East New Orleans tornado on February 7th of this year.   Below is a break down how insured losses have compared to 2016 by state thru May 1st, keeping in mind further development of 2017 losses is expected.  As of right now Texas, which last year saw 47% of the total reported U.S. insured loss, is reporting a lower level of loss as of May 1 compared to last year at this time.

Insured PCS Loss Difference (%) from 2016

Possible Cause of Severe Weather
The main stream media continue to put focus on El Niño–Southern Oscillation (ENSO) and its possible impacts on this year’s severe weather, but severe weather cannot be tied to just one atmosphere climate forcer. As mentioned in my previous post, several bits of research have been done around this relationship of Gulf of Mexico Sea Surface Temperatures (SST) and severe weather Convective Available Potential Energy (CAPE). Currently, the SST, are at record high levels, which appears to be helping provide extra fuel for any storm system that traverses across the U.S.

 

However, another hypothesis is the relationship the Rocky Mountains and Northern Plains snowpack has on severe weather and tornado occurrence.   There is little research around this connection, but a quick crude analysis shows there is possibly a connection here suggesting in years when May snowpack is below normal in the Colorado basin U.S. tornado count in May is also below normal.  This is not the case this year with near record snow pack across the Rocky Mountain; however, the correlation between above average snowpack years and tornadoes is not as clean.  Combining this theory with warmer than normal Gulf of Mexico SSTs creating warmer, moister air and the extensive spring snowpack in the Rocky Mountains provides an interesting hypothesis that would be a great master thesis for some young inspiring meteorologist.

Forecasted Severe Weather

As shown with the severe weather losses and number of events the first few months have been active, but the first few months of the year historically make up only 19.5% of the severe weather activity on average as recorded by NOAA Local Storm Reports (Tornado, Hail, Wind). An active January thru April can quickly be superseded by a quiet May, June, & July. In attempting to understand if early activity will lead to an overall above active year, I used a trailing 17 year average to find above and below average periods. In this sample approach, over the last 17 years, 7 years were above average in the January-April period. Of the years that had an above average January – April reports of severe weather, only one year (2016) went on to have above average numbers for the remainder of the year, the remainder of those years ended quieter then normal.

In fact other researchers have done some similar studies that suggest a fast start does not necessarily mean the reminder of the season will be active.

Source: NOAA – Michael Tippett

Annual PCS January – April loss development as a percent of yearly total loss.

In terms of insured loss as of May 1, historically the U.S. insured loss is developed at 42% and we know there will be further development of 2017 losses that have occurred at the end of April. Regionally, it would appear severe weather will continue to be a common occurrence across the Southern Gulf States into the Carolinas into June. More typical periods of warmth across the Northern Plains will trigger severe weather into the summer. However, the stormy periods are not expected to last long like the current persistence pattern the south has seen so far this year.

Note on Wildfire Risk
Florida will continue to see a higher risk for wildfire, but after June the risk could shift to Western states. Despite significant rain and mountain snow across California early this year, wildfires will still pose a threat this summer. Significant precipitation has led to abundant vegetation which can serve as fuel for fires. Early in the season, heat may be inconsistent across California, but temperatures are predicted to rise in July, which will likely dry out this new vegetation and increasing the chances for fires.

BMS Seasonal Outlook April 2017

Summary:

  • An El Niño is forecasted to emerge for late this summer, but weather patterns suggest that it has already arrived.
  • Late spring-early summer warming will occur over the central and eastern U.S.; then, temperatures will trend cooler into the summer for the northern plains.
  • Heavy spring rains across the Gulf States and into the Great Plains will accompany storm systems, but nothing like past record years (like 1993).
  • Best matching analog years: 1982, 1986, 2004, 2006 and 2014

The Pattern

There has been no shortage for the insurance industry of severe weather during the first quarter of 2017. A warmer-than-normal start to the year, aided by record Gulf of Mexico sea surface temperatures, has produced a relatively active period of severe weather. Will this weather pattern continue into the next few months, or are we on the road to a quieter-than-normal weather pattern?

Severe weather reports from Jan 1 – April 20, 2017. Bar graph shows the number of reports per day so far this year.

In reviewing the first three months of 2017, the weather patterns have been dominated by Pacific influences, with storm after storm pounding the West Coast. As these storm systems moved across the U.S. and into the central U.S., they were enhanced by tapping a large amount of warm air from the Gulf of Mexico, which also produced warmth across the eastern U.S. This weather pattern has provided plenty of opportunity for severe weather, and resulted in several significant severe weather outbreaks that impacted the insurance industry. Some of the bigger events occurred on January 2, 21-23, February 28-March 1, March 6-7, and most recently, April 2-3.

So far in April, it would appear this weather pattern has continued the pattern established in March, with a series of infrequent, but very energetic storm systems digging into the western U.S. before lifting up into the mid-west and northeastern U.S.  This has meant that much of the U.S. should continue to experience similar above-normal severe weather activity; but these storm systems should start traversing a more northern track across the northern-tier states.  This pattern indicates that June-like weather might appear in April and May.

Long-Range Forecasts

Many long-range climate forcer signals can provide seasonal forecasters clues about what weather to expect over the next few months.  The El Niño-Southern Oscillation (ENSO), Pacific Decadal Oscillation (PDO), and Atlantic Multidecadal Oscillation (AMO) are some of the most common signals.  Although ENSO seems the most popular climate forcer in recent seasonal forecasts, a few words of caution are required:  fickle spring weather is notoriously misleading and results in difficult forecasts (this phenomenon is so familiar that it has its own name, the “spring predictability barrier”).   Second, we are technically coming out of a weak La Niña (which has a traditionally predictable outcome), but the atmosphere isn’t following its typical pattern following a weak La Niña.  Instead, the weather pattern over the continental U.S. reflected more of an El Niño pattern, with widespread warmth across much of the country and above-normal precipitation across parts of the southern tier and West Coast states.

The PDO has been positive for a record 39 months (during a positive phase, the west Pacific becomes cooler and part of the eastern ocean warms), but the weather pattern over the western U.S. has been anything but reflective of a positive PDO pattern.  Usually a positive PDO will lead to warmer and drier conditions in the western U.S., but this has not been the case over the last few months.

Weekly U.S. Drought Monitor, which uses a composite index on the level of drought that is occurring

Seasonal forecasting can also help us understand current areas of drought.  Large areas of moderate-to-severe drought can create a positive feedback loop, meaning that already-dry regions are more susceptible to warm and dry weather than non-drought areas.  As illustrated by the above map, patches of drought are currently scattered throughout the country, but these scattered patches are too insignificant to raise red flags for long-term warm and dry conditions over next few months.

Research suggests that the continued warm water temperatures in the Gulf of Mexico will likely mean severe weather will continue to erupt over the southern and central U.S. into late spring.  Historically, when the Gulf of Mexico trends warmer than normal, there is more energy to fuel severe storms and tornadoes.

Convective energy is needed for storm development and correlates to storm activity.

The Verdict

Evaluating recent weather patterns and various climate forcers produces the following analog years: 1982, 1986, 2004, 2006, and 2014.  These years suggest an active storm pattern that may result in:

  • Much of the U.S. experiencing near-normal temperatures between April-August
  • The western U.S. and southeast warmer then normal
  • The northern states slightly colder than normal

Combining the analog years yields the following temperature and precipitation anomalies. Note the temperature scale is less than a 1 degree +/- long term average.

However, above-normal national temperatures now and into early summer should give way to more normal temperatures or cooling temperature patterns in the Great Plains later in the year.  Hit-or-miss precipitation across much of the country will be a by-product of severe weather and will provide rain in some areas but not others.  As a result, dry conditions in the southeast could progress into summer.  Severe weather should remain active until May, with activity waning to more normal levels as summer progresses; but overall, the insurance industry should expect to see much higher levels of insured loss than in the last few years.

 

BMS Tropical Update 4/20/2016 4 PM CDT

You might have noticed that the first named storm (Arlene) of the 2017 Atlantic Hurricane season has formed in the middle of the North Atlantic Ocean – 815 miles west of the Azores Islands.   The biggest impact from this storm will be the discussion in the meteorology community as to whether this system should even be monitored by the National Hurricane Center.  Currently Arlene is over relatively cold ocean water (66 F (19 C)) for a tropical system, and according to satellite data, it is questionable if the system has a warm core.

IR Satellite image show the system is over 19C water.

Typically a tropical cyclone is characterized by lack of warm/cold fronts attached, a “warm core” (air is warmer in center of the cyclone than elsewhere), and persistent deep convection wrapped close to the center; these attributes are commonly referred to as “tropical characteristics” of a cyclone.

It would appear that the decision to track Arlene is very subjective: there have likely been dozens of similar systems over the last 100 years (systems that develop in water warmer than 66 F and with a marginally warm core) that have gone unclassified, including systems that have impacted the U.S. (Sept 2008 SC coast, Sept 2009 NJ).

All this matters to the insurance industry because our hurricane catalogs in the catastrophe models are tuned to the historical data, and after decades there is still no objective guidance as to what type of system gets tracked by the NHC. In some cases like Sandy, questionably categorized storms can have large impacts on landfall definitions as well.

Regardless, Arlene is now in our record books as a storm in the North Atlantic, but it will not be around for long as a strong mid-latitude trough will merge with this system later this weekend and make it unrecognizable. These early-season tropical systems should be no surprise (this will be the sixth early-season storm in the past six years). In fact, history suggests that tropical/subtropical systems in April are uncommon, but not necessarily rare. There have been a few, but they are typically short-lived and innocuous.

Historical Storms that have occurred in April

I am currently tracking the various early season forecasts for the 2017 Atlantic basin season.  I should have my views formulated in a couple of weeks.  What I can tell you right now there is no correlation for April storms and the rest of the season, partly because of a small sample size.

Another New Hurricane Landfall Study

Three weeks ago, James Kossin published a major study in the scientific journal Nature: “Hurricane intensification along United States coast suppressed during active hurricane periods” (http://www.nature.com/nature/journal/v541/n7637/full/nature20783.html). This paper has gotten a bit of press in various insurer publications as over the last decade near term hurricane risk has dramatically influenced the insurance industry in hurricane-prone states. In short, Kossin’s paper provides valuable insight into rapid hurricane intensification during active and inactive periods of hurricane activity in the Atlantic basin (known as the warm and cold phase of the Atlantic Multi-Decadal Oscillation [AMO]). The findings suggest that approaching hurricanes are more likely to intensify before landfall during colder phases of the AMO and are more likely to weaken before landfall during warmer phases. Suggesting that during times when the sea surface temperatures are anomalously warm in the main development region, regions along the U.S. coast experience higher then normal vertical wind shear. Furthermore, the local sea surface temperatures are substantially cooler than the main development region which tend to inhibit intensification and form a “protective barrier” along the United States coastline during this period.

 

My very first thought as I read about this “protective barrier” was, finally, someone has scientifically proven the existence of HAARP and electromagnetic capabilities of the ionosphere that conspiracy theories suggest can also be used in weather modification and more. (i.e., a “protective barrier” created to control the weather (hurricane landfall))! (If you’re unfamiliar with the HAARP conspiracy theories that abound, then you won’t get this reference, but it’s one of the top questions meteorologists get asked, and you can learn more at http://www.nbcnews.com/science/weird-science/conspiracy-theories-abound-u-s-military-closes-haarp-n112576.)

How the Science has Changed

In all seriousness, to truly understand the impact of Kossin’s paper, it’s important to review how our understanding of active and inactive phases of the Atlantic Ocean has evolved and influenced the insurance industry. Since the 1960’s, the late Dr. Gray showed distinctly differing environmental conditions for tropical cyclone development. But not until the marked increase beginning in 1995 did insurers begin to notice what drives this activity. After the costly 2004 and 2005 hurricane seasons, a dozen and half papers highlighted a link to increased hurricane activity due to a warming world and/or the current phase of the AMO. About the same time, catastrophe modeling companies were being pressured to adjust for this increased frequency and severity that had impacted the insurance industry since 1995. Modeling companies incorporated a range of statistical analyses, and in some cases expert elicitation, to make assessment on future hurricane landfalling risk.

Mother Nature, however, does not always follow weather trends; and since 2005, the U.S. has entered what some have called a “U.S. landfall hurricane drought.” While overall named storm activity remains elevated across the Atlantic basin with some very active years since 2005 (2010, for example), many hurricanes have not made landfall as expected, which is actually influencing the long term landfall rates across the U.S. A few recent research papers suggest that scientists never settled on the exact impact the warmer phase of the AMO might have had on U.S. landfalls. Some of these papers suggest that in a warmer world, African dust and/or North Atlantic sea surface temperatures could actually encourage hurricanes to form further east or recurve before impacting North America, resulting in a lower U.S. hurricane landfall rate.

But Kossin’s paper provides new evidence that the science is not settled, and there is a lot to learn about hurricanes and the rate at which they make landfall. In general, the correlation between the number of hurricanes that develop in the Atlantic basin and number of hurricanes that make landfall is weak. This new study in Nature could explain part of this relationship as it highlights that elevated wind shear (changing wind speeds with height) and cooler sea-surface temperatures along the U.S. coast during the warm active phase of the AMO create conditions that tend to weaken hurricanes as they approach the U.S. coast. Conversely, the cool phase of the AMO makes approaching hurricanes more likely to intensify. This might conflict with ideas that some scientists suggested prior to 2004 and 2005, that the warmer phase of the AMO was correlated to more landfalls and possibly stronger landfalling storms (and fewer landfalls during the cooler phase of the AMO).

The Hurricane “Drought” can be Explained

Kossin suggests in his paper’s closing that this new research could possibly explain the recent “drought” of major hurricane landfalls. However, in late 2015 another research paper funded by Risk Prediction Initiative (“The Arbitrary Definition of the current Atlantic Major Hurricane Landfall Drought”) suggested the major hurricane drought is more a function of the definition of a major hurricane (defined as a Category 3 or higher on the Saffir-Simpson Scale) and the uncertainty in wind estimates. As an example, Ike (2008) made landfall as a high-end Category 2, but could just as easily have been classified as a low-end Category 3 at landfall. For contrast, consider a storm like Sandy (2012), which was not even classified as a hurricane at landfall, but still resulted in large wind and storm surge insurance losses.

Image created by Roger Pielke Jr. who has been keeping track of the days between major hurricane landfalls.

It’s important to remember that only 78 major hurricanes have made landfall since 1900 (117 years), which results in a particularly small sample size, and that there are likely many other factors that affect intensification before landfall. Hurricanes can experience higher levels of disruptive wind shear while turning north, which could be due to a large scale trough of low pressure or drawing in dry air from landmasses. Hurricanes can also send large waves and surge ahead of the storm causing warm water to mix with cooler water and deplete important energy from the storm as it approaches land. These vacillating factors highlight the complex interactions hurricanes may experience during a life cycle. These factors could also explain why many hurricanes have not intensified prior to U.S. landfall (with the exception of Charley [2004] and Humberto [2007]).

Future Hurricane Landfall Rate Models

As always, new research will continue to become available and catastrophe modeling companies will continue to judge how the science best fits into catastrophe models. This new research should not discredit near term view modeling work. Hindsight is 20/20, and as Hall, T.M., and K. Hereid, 2015: The frequency and duration of U.S. hurricane droughts paper suggests several observations point to the current drought being more a case of good luck than any shift in hurricane climate. Therefore this luck could have swayed higher then normal insured losses in a completely different direction over the last 10 years. These facts highlight why it is important to continuously evaluate new science. Modeling companies need to ensure they avoid knee-jerk reactions to industry demands or speculative science. Seasonal hurricane forecasts are improving, and with time, multidecadal sea surface patterns and other variables could help clarify the cause of reduced landfall rates, not just in the Atlantic basin, but in other basins near high exposure. El Niño/Southern Oscillation (“ENSO”) and other variables could also be worked into the landfall rate catalogs produced by model vendors.

As pointed out in this blog, the science might not be settled on hurricane landfall rates and what drives these rates during particular climatic conditions. Although it is short by climate standards, the U.S. landfall hurricane record is one of the best natural catastrophe databases insurers have to understand frequency and severity. There is a reason why catastrophe model companies calibrate their models to the longest period of record available.

There is plenty of room for debate about near term hurricane landfall rate models, the drivers of this risk, and what position an insurer should take regarding rate models. Are they a good idea or a bad idea? Should a blended approach be used? Those are interesting questions and a worthy topic, which is why I will be moderating the session, “Is Near Term vs. Long Term View of Hurricane Risk Over?” at the February RAA Cat Management Conference. We hope this subject generates lively discussion and hope to see you there!

2016 – The Good News

As 2016 natural catastrophe headlines funnel in from various media outlets and insurance publications, a theme of negative highlights quickly emerges. Few headlines point out the positives that occurred. In this post, I want to highlight a few of the 2016 insurance industry positives that might otherwise be lost in the sea of negative news as it relates to natural catastrophes.

Severe Weather
When the calendar flipped to 2017, a switch seemed to turned on for US severe weather season: severe weather impacted the Gulf Coast states with 31 tornadoes on January 2 (PCS 1711). Just two weeks into the year, 2017 already has 4.4 times more than the normal number of tornadoes. However, the great news is that 2016 ended with lower reported tornado numbers, and the preliminary numbers suggest that 2016 ended up as a year with the fewest tornadoes since 1954 (when records started).

2016InflationAdjustedTornado

NOAA plot of the annual running total of tornado reports compared to inflation adjusted values.

This might not seem remarkable given the US has experienced five years a row of below near term normal tornado reports (2005 – present year) since the near record high year of 2011. So the good news is the US continues to see lower tornado counts for several years in a row now and is currently in what some scientist call a “tornado drought.” The other good news is that, as a matter of luck, the tornadoes that did occur did not result in large insured loss events. There were many close calls like this major tornado that occurred just 3 miles south of Dodge City, Kansas.

Twin tornadoes are seen near Dodge City, Kansas, with Dodge City Raceway Park in the foreground on Tuesday, May 24, 2016. (Instagram/bradguay)

Twin tornadoes are seen near Dodge City, Kansas, with Dodge City Raceway Park in the foreground on Tuesday, May 24, 2016. (Instagram/bradguay)

Various reports point out that 2016 produced the highest severe weather-related losses since 2011, but along with the lower tornado count, 2016 also produced hail reports below the 11-year average. As a matter of a different kind of luck however, these hail events targeted several populated regions across the state of Texas which produced most of the 2016 severe weather-related loss. The overall good news is that hail events across the other states were at or below average.
2016SvWxLossWithTxLossPercent
Flood
It is easy to highlight devastating 2016 U.S. flood events, but given the current flood take-up rates, these events were mostly uninsured. But the good news is the federal government and uninsured homeowners and business are taking steps to protect themselves from future flood events. And there’s more positive 2016 flood news: Since 1965, 60% of U.S. measured locations have seen a decrease in flood magnitudes according to the newest EPA study. Finally, no significant trend in major flood events seems to be emerging when looking at historical major flood events as defined by FEMA.

FEMA_MajorFloodEvents
Named Tropical Storms
On average, 87 named tropical storms occur worldwide in any given year. 2016 saw 79 tropical storms, and just 42 were hurricanes (which is again below the average of 48). It should also be noted that so far for the 2016/2017 Southern Hemisphere named storm season (starts July 1), only 2 named storms and 0 hurricanes have formed to date (an average of eight named storms and four hurricanes occur at this point in the season), which equates one of the slowest starts to that basin in history.
However, what the insurance industry cares most about is landfalls, and in 2016 global landfalls were spot-on average: 14 hurricane-force storms made landfall, and five of them were major. Two of those 14 hurricane-force storms impacted the U.S. coastline: Hermine and Matthew both produced isolated impacts that could have resulted in much worse impacts for the insurance industry (considering that one cat modelling company estimates the average annual loss for U.S. hurricane is $15B). The modelling company’s average annual loss number might seem high due to the lucky streak the US has experienced in recent decades: a continued record period without a major hurricane making US landfall.

Image created by Roger Pielke Jr. who has been keeping track of the days between major hurricane landfalls.

Image created by Roger Pielke Jr. who has been keeping track of the days between major hurricane landfalls.

Undoubtedly there will always be major catastrophes in any given year, and the media will focus on these events. Undoubtedly some insurance and reinsurance companies suffered in 2016. But all in all, 2016 was a great year and could have been much worse for many more organizations within the insurance industry if the trends mentioned above were reversed. 2017 could likely change the trend of these natural perils which is why it’s best to understand exposures to all natural catastrophes.

For other great news in 2016, check out this tweet string by astronaut Chris Hadfield:

 

 

Tis the season for severe weather across the south, but it’s been extremely quiet so far?

Tornado and hurricane drought?
It’s no surprise that the recent lack of hurricane landfalls has drawn the attention of the insurance industry. The long-standing Florida hurricane drought ended with hurricane Hermine’s landfall on September 2, and of course, Matthew threatened to end the major U.S. hurricane drought as well. However, there is another drought quietly confounding the insurance industry. After 2011 and reports of a “new normal” for severe weather, several years have now passed with lower than normal tornado activity.
So far the 2016 U.S. tornado count is among the lowest of the last 11 years. As of Nov 27, 981 tornadoes touched down in the U.S., which is 303 less than the 17-year average for that time period.

Tornado counts are below the 17-year average in eight of 10 months so far this year. Most recently, tornadoes in September and October were well below average. This is despite hurricane Hermine, which spawned eight confirmed tornadoes and hurricane Matthew which spawned two confirmed tornadoes. Hurricanes can produce a significant number of tornadoes, but neither Hermine or Matthew produced very many.

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U.S. Inflation Adjusted Tornado Count from 1950. It shows that this year could take the record for the lowest inflation adjusted tornado count since 1950.

This year’s unusually dry tornado spell started in June, which produced only 86, the fewest in that month since 1988. The 17-year average number of tornadoes for June is 216. February, March and August are the only months that featured above-average tornado activity this year.

Had it not been for a concentrated outbreak of 35 tornadoes in Indiana and Ohio on August 24, August would have finished below its 20-year average as well. Though the tornado pace has been slow for the year as a whole, February was an exception. With 138 confirmed tornadoes during the month, it was the second most tornadic February since 1950. Only 2008 produced more February tornadoes: 146 total tornadoes, including the record “Super Tuesday” outbreak of 84 tornadoes.

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2016 Tornado touch down locations and daily total count which shows the lack of tornadoes since the end of September.

Through last Monday, November 21, zero tornadoes had been reported this month, which is highly unusual. With an average November tornado tally of 58 (1991-2010), we are in near-record low territory again this month. Only four other years since the 1950’s have witnessed comparably low tornado activity in November (according to NOAA Storm Prediction Center Data): zero tornadoes in 1976, two tornadoes in 1954, and three tornadoes each in 1980 and 2009.

Severe Weather Insured Losses

As one might expect, insured losses from severe weather are often a matter of luck, and although there were some powerful tornados this year, very few impacted large populated areas. Yet despite scant tornado activity, 2016 is already the second costliest severe weather year in recent years, totaling $16.6B in insured loss. This total is far behind the $28B of insured loss experienced in 2011 as a result of several deadly and damaging tornadoes across the southeast U.S. Large insured loss losses this year were likely driven by wind and hail events. In fact, over 80% of U.S. insured loss results from hail and wind events, but luck is an ever-present factor. This year, bad luck settled over the state of Texas. Several hail storms impacted large metropolitan area such as Dallas-Fort Worth, San Antonio and El Paso, and these storms have driven the large losses experienced in the U.S this year. In fact, almost half of the total loss of $7.9B so far this year occurred in Texas.

Louisiana was also hit hard by severe weather and flooding, and that bad luck could continue today with a new severe weather threat.

This week’s severe weather threat

Tornadoes happen all year, but climatologically two seasons exhibit peak activity. Spring is prime time for tornado activity. That’s when warm Gulf of Mexico air clashes with winter’s remnant cold as dry air masses spill over the Rockies. Another peak arrives in October and November, but tends to be more erratic throughout fall. In something of a reverse of the spring air migration, jet streams again traverse and target specific parts of the country as the calendar changes from summer to winter.
It’s been over seven weeks since the U.S. has had a day with over 50 severe weather reports, and today this trend may snap due to expected severe weather across the south-central U.S. The HRRR model is forecasting the formation of prefrontal super-cells by mid-day Monday across central and northern Louisiana.

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Today HRRR Forecasted Radar for 2 CST over the South Central U.S.

This severe weather threat will continue to move across the southeast U.S. over the next weeks, which in some cases will be welcome given the ongoing drought conditions that triggered recent wildfires.

So although it has been quiet and the U.S is at near near-record low tornado fatalities and low tornadoes counts, we shouldn’t forget what occurred in December of 2015. That December began with a record-low of 10 tornado deaths. Then waves of tornadoes struck the South and the yearly toll jumped to 36. With a more energetic weather pattern ahead, we should stay tuned and remember that droughts won’t last forever.

BMS Tropical Update 10/10/2016 12 PM CDT

Now that Matthew’s story is complete, immediate attention will turn to Nicole, a tropical storm currently 450 miles south of Bermuda. The models generally agree that Nicole will slowly strengthen back into a hurricane and that there is a good chance that Matthew will become a strong category 1 or weak category 2 hurricane as it tracks close to Bermuda this Thursday.
So with no tropical troubles threatening the U.S. coastline in the immediate future, this is the time of year that the insurance industry often wonders if there is any other tropical trouble forecasted for the remainder of the year.

Climatologically over the next two weeks we tend to see stable named storm activity, but after October 18th, the activity in the Atlantic Basin drastically trails off.

Season

This is also roughly the time of year that the West African – Cape Verde type hurricane season trails off due to the equator-ward shift of the African Monsoon. This past weekend the overall tropical rainfall seemed to shift below 10 degrees north latitude, which is the benchmark for tropical waves coming off Africa to obtain enough spin to become named storms.

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Here is a look at the tropical rainfall totals since mid July. It shows the height of the African Waves during middle of August with a trailing off over since this period. The axis to the left is latitude showing a trend towards the equator.

This is also the time of year that colder Canadian troughs of low pressure air start to invade the U.S. Often these weather systems leave trailing cold fronts that sometimes extend into the southern Gulf of Mexico or Caribbean. Low pressure can form at the tail end of these fronts, and if the water is warm enough in the Gulf or Caribbean, it can encourage tropical convection which could then become organized. These typical developments are consistent with some of the models’ long-range weather forecasts for later next week.

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Forecasts for Thursday morning show an area of low pressure moving across the upper Great Lakes, which could provide the first freeze of the year for the upper Midwest. This forecast also shows Nicole moving toward Bermuda.

This low pressure moves across the north Atlantic late next week, and it leaves a trailing cold front with an area of low pressure off the east coast of Mexico in the western Caribbean. This is the area that needs to be watched for tropical trouble later next week as the water in this area is plenty warm enough to support tropical convection.

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The long range forecast from Oct 17  – Oct 24th  total precipitation plot below show a decent amount of rain which could be  from  convection thunderstorms.

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The graphic below illustrates the climatological pattern that is typical of tropical storms that originate in October so the Western Caribbean is the place to watch over the next three week.

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BMS Tropical Update 10/9/2016 10 AM CDT

 

Mathew End Game

Matthew is now classified as a post tropical storm as the majority of its energy has merged with a mid-latitude frontal system.   As a result Matthew will once again defy the long range forecast models that had suggested Matthew’s energy would travel southward towards the Bahamas.  Now Matthew will go out to sea just like the majority of tropical systems and Matthew’s long story will end.

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Matthew Forecast issued at 8 am EDT Saturday Morning. Showed Matthew likely taking a southern track in the long term

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Almost a complete 180 degree change in the direction Matthew is expected to take in today’s 8 AM NHC official forecast. Now Matthew is expected to track north of Bermuda.

Flooding

However, the damage is done and it is becoming apparent that water related damages could add up to more than the wind related damages.   In fact’ the water damages will continue to add up as many major rivers in Carolinas are expected to hit record flood levels.  In some cases there have been dam breaks which is reminiscent of the incredible rain event just over a year ago from tropical moisture from Hurricane Joaquin.  So with major rivers still rising, the flood situation is still unfolding, particularly in North Carolina which will lead to more losses in the next few days. However, it is assumed the majority of the inland flooding / river/ storm surge losses are either uninsured or are being assigned to flood policies by the NFIP.   As shown yesterday, the National Flood Insurance Program take-up rate by counties which are heavily coastal in nature across northern Florida through the Carolinas decreases for inland counties.  Therefore the majority of insured losses should be driven by wind related claims.

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Record flooding forecasted at Goldsboro, NC

 

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Record Flooding forecated for Kinston, NC

This record river flooding is a result of heavy rainfall which in some places has totaled more than 12”

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Past 7 Days of Rainfall observed. It should be noted BMS iVision also has a rainfall layer users can use to understand risk impacts to flooding.

As highlighted in yesterday’s update storm surge has also done a lot of damage along the entire coast from Flroida up to North Carolina.

  • Mayport, FL 3.28 feet:  Previous record of 2.47’, during Hurricane Jeanne on September 27, 2004 (records since 1928.)
  • Fort Pulaski, Georgia 5.06 feet:  Previous record of 3.40’ during the October 15, 1947 hurricane (records since 1935.)
  • Wilmington, NC 8.21 feet:  Previous record of 8.15 feet during Hurricane Hazel in October 1954.

 

Notice in the image above however that one of the areas hardest hit by winds in Florida right along the coastline. Most of the homes are relatively undamaged from this view.   Other damage from University Florida Damage Assessment group find minor roof and exterior damage along parts of the Florida coastline with surge leading to most of the damage observed.

Wind damage

As pointed out several days ago, treefall would be enhanced due to the saturated soil conditions in the Carolinas. With this combined with wind gusts and the lack of any significant large scale wind event over the region in several years, wind related tree damage could increase insured losses.

Since wind related damages will likely drive the insured loss, users of BMS iVision can now get a full picture of Matthew’s wind swath by looking at the 1 minute wind speed and 3 sec gust wind speed.   In the coming days   users will find wind duration information.

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BMS iVision Verisk Climate 3 sec wind gust swath for Matthew

Industry Loss

The only public report of insurance industry loss numbers was in a report issued Saturday afternoon by, CoreLogic, which estimates Matthew’s insured losses to range between $4B to $8B with 90% of loss being driven by wind claims, 10% by storm surge.  These estimates are well below the industry loss estimates projected by the major catastrophe modeling firms late last week.  However, they are somewhat inline with the other industry loss numbers from other modeling firms (not yet released publicly).

While Matthew was within 20 miles of bringing much larger insured property losses, Phil Klotzbach of Colorado State has compiled the historic statistics on Hurricane Matthew.

Hurricane Matthew Records/Notable Facts Recap (through October 8)

Intensity

  • 80 mph intensification in 24 hours – the 3rd strongest rapid intensification in the Atlantic on record (trailing Wilma-2005 & Felix-2007).
  • 31st Atlantic Category 5 hurricane on record and the 1st since Hurricane Felix (2007)
  • Lowest latitude Atlantic Category 5 hurricane on record
  • 6th lowest MSLP for any Atlantic October on record at 934 mb (trailing Joan, Opal, Mitch, Wilma & Joaquin). Consistent MLSP records date back to 1979.

Longevity

  • Longest-lived Category 4-5 hurricane in the eastern Caribbean (<=20°N, 90- 60°W) on record.
  • Generated the most Accumulated Cyclone Energy on record for any hurricane in the eastern Caribbean
  • Maintained Category 4-5 hurricane strength for 102 hours in October – the longest that a hurricane has maintained Category 4-5 strength on record during October in the Atlantic
  • Maintained major hurricane strength for 7.25 days – the longest-lived major hurricane forming after September 25 on record and longest lasting at any time of year since Ivan (2004). Tied with Fabian (2003) for 5th longest major hurricane in satellite era (since 1966)
  • Currently ranked 8th for Accumulated Cyclone Energy by an Atlantic hurricane in the satellite era

Landfall

  • 1st Category 4 hurricane to make landfall in Haiti since Cleo (1964) – 1st Category 4 hurricane to make landfall in Cuba since Ike (2008)
  • 1st time on record that a major hurricane has made landfall in Haiti, Cuba and the Bahamas
  • 2nd time that a Category 4 hurricane has made landfall in the Bahamas since 1866 (Joaquin-2015 was the other)
  • 1st hurricane to make landfall in South Carolina since Gaston (2004)
  • 1st hurricane to make landfall north of Georgia in October since Hazel (1954)

Note: While Atlantic hurricane records go back to 1851, there are likely underestimates in storm intensity prior to the satellite era (since 1966) and especially prior to aircraft reconnaissance (since 1944).

 

BMS Tropical Update 10/8/2016 10 AM CDT

Matthew Weakening

Matthew has weakened from a category 3 hurricane yesterday afternoon down to a category 1 hurricane overnight.  Matthew has officially made landfall near Mcclellanville, SC as a category 1 hurricane.   Matthew has weakened due to a shallower continental shelf and lower ocean heat content. Also as Matthew has tracked further north it has been able to wrap in some cooler, drier air into the center of its circulation allowing some weakening.

Over the next day Matthew will continue to weaken as it moves along the South Carolina coastline before it moves out into the Atlantic near Wilmington, NC where it will start to track southeastward. The biggest impacts over the next 24 hours will be inland flooding as the rain shield from Matthew extends across the Carolinas and into the southern  Mid-Atlantic states as the warm moist air from Matthew rides up and over a frontal boundary across the eastern United States.  Just one year after hurricane Joaquin, enhanced rainfall parts of the Carolina’s could see 5 – 14 inches of rain again.

 

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Total radar observed rainfall over the last 7 days

 

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Percent of homes that have flood policy thru National Flood Insurance Program (NFIP). Very low take-up rate inland.

Overnight Impacts

Storm surge has been the biggest impact overnight. Savannah, GA  has seen record flooding breaking the previous record which was created during hurricane David in 1979.  Other hard hit areas by high storm surge were Tybee Island, GA, Hilton Head Island, SC and Charleston, SC.   However, it would appear the overall height of storm surge was 2 feet below what was forecasted for many of these areas.

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Tide Gage at Fort Pulaski near Savannah, GA

It has been a long time since a hurricane of this strength has impacted the Georgia, South Carolina coastline.  In fact a few years ago I took a trip to Hilton Head Island, SC and I could not believe the over growth of foliage on the island, which was likely due to the fact this area has not recently been hit by a hurricane.  Hurricanes are nature’s way of cleaning out some of that foliage.  I expect this could lead to some higher than normal insured loss from tree fall right along the coastline.   The maximum wind gust record at Hilton Head, SC was 87 mph and Tybee Island, GA was 96 mph.

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BMS iVision shows the historical 3 sec Max Wind Gust and now the forecasted wind gust. This allows clients to get a complete picture of possible wind damage.

 

Matthew Extended Forecast    

Later next week Matthew will be a tropical storm or depression off the southeastern U.S.   It would now appear that Matthew’s energy will reach the Bahamas and even track south into the southern Gulf of Mexico later next week, however, not as a named system.   Hurricane Ivan in 2004 made a similar large loop and reformed in the Gulf of Mexico.  No models at this time forecast Matthew reforming in the southern Gulf of Mexico, but this is something to watch out for. In the next three weeks this would be the area to watch for new tropical development.     There is still a chance that Matthew will get caught up with hurricane Nicole in the Atlantic and move out into the open ocean later next week as well.

 

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ECMWF ensemble forecast showing many of the 51 members tracking the remnants of Matthew south of the Florida keys next week.