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BMS Tropical Update – August 13th

It’s been a while since the last BMS Tropical Update on July 11. That update focused on Tropical Storm Barry, which eventually made landfall along the central Louisiana coastline as a minimal Category 1 hurricane. Even though it was a disheveled mess of a storm, it still caused nearly $100 million of insurance industry loss in Louisiana and set an Arkansas state rainfall record of 14.58” near Murfreesboro, Arkansas. Luckily, this large amount of rain did not fall along the Mississippi River in southern Louisiana, which was at already historic high levels along many sections, including levy-protected New Orleans. With Barry’s landfall, it joined 12 other July hurricane landfalls in the Gulf of Mexico since 1900. However, as we look forward to the remaining months of the hurricane season, it’s worth noting that there is no correlation between hurricane activity occurring before August and how much activity will be seen during the remainder of the season.

By now you may have seen the various updated Atlantic hurricane season forecasts, which, for the most part, continue to call for above-normal activity. As I have stated several times, the overall number is not what is important, but, rather, the steering currents that influence the track(s). Contrary to popular belief, however, most named storms have fairly regular and well-defined tracks because of the location and orientation of the Bermuda Azores high pressure, which ultimately determines the tracks of most named storms. The difficulty in predicting a storm track occurs either when the typical climatological steering wind flow is replaced by a less common, large-scale flow or, even more importantly, when rapid changes occur in the strength and orientation of the steering current, such as a bypassing mid-latitude trough, which is really only well-forecasted 5 to 7 days in advance.

Above is the current steering flow across the Atlantic Ocean. Note the current weakness across the Bermuda Triangle. Absent any mid-latitude system, this would likely be the path for named storms out of the deep tropics.

The average date for the formation of the season’s third named storm is August 13, and the average date for the second hurricane is August 28, so there is nothing unusual about having a calm spell this time of year like we’ve seen recently. There have been several tropical waves that have propagated from the African coastline, and a few of these have been watched by the National Hurricane Center. Tropical Depression Three, which formed for less than 24 hours off of the eastern coast of Florida, provided a glimpse of where named storms could track this season if the current North American and Atlantic pressure patterns hold into the peak of the hurricane season. However, first let’s determine the factors to consider for the remainder of the hurricane season and then worry about the steering current once the storms begin to form. In the beginning of the season, it was suggested that named storms would form closer to the U.S. coastline rather than in the Main Development Region, and track closer to the eastern coast of the U.S. with the overall season seeing more back half activity.

Although many of the headlines suggest that an above-normal season is yet to come, these headlines should probably be taken with a grain of salt. Take the NOAA forecast, for example. There is a 45% probability of an above-normal season, which obviously means there is a greater chance of a normal to below-normal season at 55%. In fact, I don’t think there is much confidence in the August activity forecasts, even though they are usually the most accurate when it comes to the overall Atlantic Basin activity.

There are a number of reasons why there is a lack of confidence in the forecast:

Unfortunately, even with the more reliable August forecast, there are still a lot of variables for the remainder of the season. Perhaps the best guidance would be to view the analog years, which serve as a guide for potential activity and possible tracks for the remainder of the season.

Above are the various analog years (1991, 2012, 2014, 2015) which may best indicate the current conditions and possible track of storms this season. Depending on the overall timing of development, analyzing these years may provide a guide as to the general track storm could take this season, but the timing of mid-latitude weather systems will determine the steering level winds if they reach the U.S. coastline. Example: Isaac or Sandy 2012 (Remember Sandy could have also turned out to sea)

This week we may see the remnants of an old stalled front off of the eastern coast of the U.S., providing a chance at tropical cyclogenesis closer to home. Hopefully, there won’t be a need for too many BMS Tropical Updates over the next 30 days, will be keeping an eye on how any potential events could impact the insurance industry.

Why was Sandy so unique?

Andrew J Siffert, Assistant Vice President & Meteorologist with the BMS Analytical Services Team discusses the implications of Hurricane Sandy.

Superstorm Sandy made landfall October 29th just south of Atlantic City, New Jersey. Despite land falling as a post-tropical system, it left in its path some impressive weather statistics. Its central pressure was the lowest ever recorded for an Atlantic named storm, north of North Carolina, breaking a record set by the devastating ‘Long Island Express’ hurricane of 1938. It is also the first storm in recorded history to landfall in New Jersey at a perpendicular angle to the coastline. Furthermore, Sandy resulted in record surge heights along many parts of the East Coast including a tide surge reading of 14.60′ at Bergen Point, NJ. Its massive wind field had a diameter of tropical storm-force winds at landfall of 945 miles and is one of the largest ever recorded. Given Sandy’s uniqueness it should be no surprise that the cat models used by the insurance industry to understand hurricane risk would most likely have very few stochastic events that would provide guidance to the expected loss potential and should be used with caution when analyzing this event.

Sandy’s uniqueness has also raised many questions of the damage impact from aspects of the event which are not modeled or not modeled well. The exceptional size of the wind footprint, the scale of storm surge, the large number of lengthy power outages, and the impact to major infrastructure, have added to the considerable amount of uncertainty surrounding the interpretation of insurance coverages, whether in relation to wind versus water, business interruption or windstorm deductibles.

Superstorm Sandy could easily place high on the list of the most costly hurricane losses for the insurance industry with insurance estimates ranging from $7 billion to over $20 billion and economic damage exceeding $50 billion. If Sandy causes $50 billion in economic damage (in 2012 dollars), it would rank as the 7th most damaging hurricane or tropical storm (out of 242) to hit the U.S. since 1900. The wake up factor is Sandy was far weaker than any other storm topping this list. Sandy was not even officially a hurricane when it made landfall along the U.S. coast. If Hurricane Irene in 2011, which impacted the Northeast as only a tropical storm, caused $4.3 billion in insured losses and didn’t raise questions as to how vulnerable the northeast coastline is, Superstorm Sandy will.

To learn more about BMS’ expert Analytical Services Team – click here.

ILWs on standby after Sandy – Stefano Nicolini – Insurance Insider

Stefano Nicolini, SVP of BMS’ Retro/ILW team featured in Insurance Insider discussing the use of ILWs in light of Hurricane Sandy.

Click here to read the full article. (Registration needed)