High-Stakes Hurricane Season

Round and round the season will go, but where hurricanes land, even forecasters don’t know

Residents along the East and Gulf Coasts and in the Caribbean Islands should brace for an above-average 2000 Atlantic hurricane season on par with last year’s season.

Forecasters with both the National Oceanic and Atmospheric Administration and the Department of Atmospheric Science at Colorado State University are predicting strong, long-lasting storms, some threatening land.

An above-average hurricane season typically brings 11 or more tropical storms, of which seven or more become hurricanes, with three or more classified as major. A hurricane in the “major” classification packs sustained winds surpassing 110 mph, and is classified at Category 3 or above.

Four of the last five hurricane seasons have been above-average, according to the CSU’s annual Early April Forecast of Atlantic Seasonal Hurricane Activity and U.S. Landfall Strike Probabilities. That same report predicts that, while the 2000 season will be above average, it is likely to be less active than the four recent very busy years of 1995, 1996, 1998 and 1999.

The CSU team estimates that 2000 will bring about 7 hurricanes (average is 5.7), 11 named storms (average is 9.3), 55 named storm days (average is 47), 25 hurricane days (average is 24), three intense hurricanes (category 3,4,5; average is 2.2) six intense hurricane days (average is 4.7) and a Hurricane Destruction Potential of 85 (average is 71).

This year’s April forecast update is identical to the previous forecast issued December 8, except that U.S. landfall probability has been reduced somewhat.

NOAA’s prediction came at a Washington press conference last month. There, the NOAA’s National Weather Service said the continuing La Niña conditions in the Pacific Ocean mean the eastern United States and the Caribbean will most likely deal with an above-average year.

The 1999 season saw 12 tropical storms form, eight of which became hurricanes, including Hurricane Floyd, which hit the North Carolina coast, killing more than 40 and resulting in the country’s worst and costliest disaster of the year.

Hurricane season began June 1 and will last until Nov. 30, though most of the activity takes place between August and October. The probability of one or more major hurricanes making landfall in the U.S. this year is 60 percent (average for the last century is 52 percent) according to CSU’s annual report. The likelihood that one of those storms will hit the U.S. East Coast is 39 percent (average for last century is 31 percent), while the likelihood that the Gulf Coast between the Florida Panhandle and Brownsville, Tex. will be hit is 34 percent (average for last century is 30 percent). Forecasters will update this information in June.

Preparation in Texas

Meanwhile, the Texas Department of Insurance is making its standard preparations for the hurricane season.

“Our big function in any kind of natural disaster is essentially to inform consumers on how they go about the claims process…and we get a lot of practice at it,” said Lee Jones, TDI spokesman. “We think we’re ready. We’ve got a plan and we get out public information to let people know what to do before they become a victim.”

But being truly prepared for an above-average hurricane season can be difficult.

“You never know how ready you are until it happens,” Jones said. “Frankly, we haven’t experienced [a hurricane]. The last major one to hit Texas was 17 years ago when Hurricane Alicia hit [Galveston and Houston].”

Hurricane Alicia, a category four storm, killed 21 people and caused more than $500 million in damages in 1983. It is rivaled in size and intensity by only three other storms to hit the Texas coast in the last 30 years, including Hurricane Bret, which hit sparsely populated Kenedy County in August 1999. Because the storm made landfall in one of the least populated areas of the state, relatively little damage was sustained.

Changes in catastrophe reinsurance

With the probability of a large storm hitting the Texas coast estimated at 34 percent, Texas may not be so lucky this year. But changes to the Texas Windstorm Association’s reinsurance may make covering those damages easier than in previous years.

TDI Commissioner Jose Montemayor has approved an expanded catastrophe reinsurance program for the Texas Windstorm Insurance Association, the residual market for windstorm and hail coverage along the Texas coast.

The new program, brokered through Guy Carpenter & Co. of Minneapolis, will provide the TWIA with $325 million in reinsurance coverage for calendar year 2000 compared with $300 million for 1999.

According to the TWIA’s petition, the gross cost of the reinsurance will be $18.6 million.

If a major hurricane hit the Texas coast, the TWIA would pay the first $100 million in claims by assessing all property insurers that, by law, constitute the TWIA. The state’s Catastrophe Reserve Trust Fund and the reinsurance program would be tapped for funds to pay the next layer of claims until the reserve—currently about $250 million—is exhausted. At that point, insurers would be assessed again, with reinsurance supplementing the assessment on a 50-50 basis. If this second assessment exceeded $200 million, companies could recoup the difference through state premium tax credits over a five-year period.

Under the program, more than $500 million in claims would be paid by the catastrophe reserve trust fund and reinsurance before a second assessment of insurers could occur.