Busy Hurricane Season Likely To Lead To Elevated Claims Costs

 Friday, August 7, 2020

 Insurance Business

DBRS Morningstar has offered commentary on the current US hurricane season, saying that not only will the season likely see a lot of storm activity, but the resulting insurance claims made will “add to insurers’ woes.”

The global credit ratings firm cited a report from the Climate Prediction Center of the National Oceanic and Atmospheric Administration (NOAA), which forecast that the Atlantic hurricane season (which runs from June 01 through November 30) will have above-normal hurricane activity in 2020.

Specifically, NOAA anticipates a 60% chance of an above-normal season, a 30% chance of a near-normal season, and only a 10% chance of a below-normal season.

According to DBRS Morningstar, damage from hurricanes has been on the rise along the US Atlantic and Gulf coasts; the economic damage caused by these large tropical storms has also increased significantly since the early 1990s, the firm noted.

Citing data from the National Hurricane Center, the firm said that of the top 50 hurricanes that have caused over $1 billion in damage between 1970 and 2019, the most devastating occurred between 2005 and 2017.