Dr. Eberhard Faust

Changing hurricane risk in the North Atlantic

What we are concerned about

Updated to the end of the hurricane season 2005

The elevated frequency of intense storms in 2004 and 2005 — no fewer than four of the ten strongest hurricanes ever recorded occurred in 2004 or 2005 — hints at a systematic change in the hazard situation and hence a shift in the loss distribution and its parameters.

After an extremely active US hurricane season in 2004 with an absolute record of four hurricane landfalls in/near Florida and the highest overall insured loss from tropical cyclones until then, 2005 has been a season with even higher losses from hurricanes (particularly Katrina, Rita, and Wilma).

Accordingly, the current situation has to be characterised by a higher average market-wide annual loss and different return periods for market-wide claims expenditure compared with the situation a few years ago. In the following analyses, we address the question of new evidence with respect to causes of changes in hurricane frequencies and intensities.