Atlantic Hurricane Season
Outlook 2021

As another hurricane season is about to begin in the Atlantic basin, what kind of season will it be? After successive above-average seasons since 2016, what are the projections for 2021? Will La Niña weaken to move to El Niño–Southern Oscillation (ENSO) neutral conditions? Allianz Global Corporate & Specialty (AGCS) reviews the 2020 season and previews 2021, based on an analysis of projections from key hurricane forecasting institutes and observations by its in-house catastrophe risk team.

The 2021 Atlantic hurricane season officially begins on June 1 and ends on November 30. However, especially in the past few years we have seen the first tropical storms forming already in April or May. The Atlantic basin had three quiet hurricane seasons from 2013 to 2015, followed by above average seasons ever since.

The 2020 Atlantic hurricane season ended up being significantly above average and will primarily be remembered for the recording-breaking number of tropical storms, hurricanes and Hurricane Laura, which made landfall in Louisiana as a category 4 storm. Hurricanes Eta and Iota caused significant rainfall and widespread flooding in Nicaragua and neighboring Honduras. At present, the established research institutes anticipate an above average 2021 Atlantic basin hurricane season. Scientists from Colorado State University (CSU), Tropical Storm Risk (TSR), North Carolina State University (NCSU) and AccuWeather forecast above normal activity. The first forecasts by the National Oceanic and Atmospheric Administration (NOAA) are expected in late May.

Extreme meteorological events such as hurricanes have the potential to generate significant onshore and offshore losses for the insurance industry. Two such past events – Hurricane Katrina in 2005 and Hurricane Harvey 2017- were among the costliest storm events (in terms of insured losses) in US history [1]. Due to the high impact of hurricanes making landfall, the AGCS Reinsurance and Catastrophe Management team provides an annual outlook for the upcoming hurricane season. This article reviews the 2020 season activity compared to its predictions and provides an outlook for the upcoming 2021 season.

The extremely active 2020 Atlantic hurricane season saw a total of 30 named storms out of which 13 were hurricanes. It was the fifth consecutive year with an above-normal Atlantic hurricane season (NOAA). In total, the 2020 season saw six major hurricanes (category 3–5) in the Atlantic which is twice as high as the long-term average (2.7). Simultaneously, the number of named storms (30) by far exceeded the average (12).

The 2020 season started early in May and by the end of July nine named storms had already formed. With the formation of Tropical Storm Wilfred on September 18, the six-year 21 name rotating list for the Atlantic Ocean (maintained by the World Meteorological Organization) was exhausted for only the second time in history. Consequently, the Greek alphabet was used for the remainder of the season, extending through the 9th name in the list: Iota. According to NOAA, the intense hurricane season was induced by a few factors. These included a warmer-than-average Atlantic sea surface temperature, paired with weaker vertical wind shear and wind patterns coming off of the African continent, allowing for intensified storm development. These conditions, combined with a stronger west African Monsoon and a persisting La Niña climate pattern, significantly contributed to the record-breaking active hurricane season [2].

The 2020 Atlantic hurricane season will primarily be remembered for the record-breaking number of tropical storms and landfalling hurricanes, Hurricane Laura (landfall in Louisiana) and Hurricane Eta and Iota impacting Central America.

It can be split into two distinct hurricane seasons. The first season was active but not overly destructive and persisted for around four months. The second season from October through November had seven additional named storms and four major hurricanes causing damage claims of around US$15bn. While being the busiest year on record for named storms, in total 2020 was not among the costliest seasons [3].

Notable as well is the number of named storms making landfall in the US (12), including five that came ashore in Louisiana. Hurricane Laura was the strongest and most damaging landfalling US hurricane of 2020, affecting southwestern Louisiana as a category 4 storm in late August. Laura was tied as the fifth-strongest hurricane on record to make a continental US landfall, and tied as the strongest landfalling hurricane in Louisiana history. On October 9, Hurricane Delta made landfall as a category 2 hurricane just 12 miles to the east of where Laura made landfall. Insurance broker Aon estimates that Laura caused $16 bn in damages, and Delta an additional $4bn. Fortunately, three out of six hurricanes that hit the US. struck relatively sparsely populated portions of the Louisiana coast [4].

The World Meteorological Organization (WMO) retired three 2020 hurricane names: Laura, Eta, and Iota, along with Dorian from 2019, for which the announcement was not made until 2021 due to the pandemic. Furthermore, the Greek alphabet will no longer be used to name Atlantic hurricanes [6]. Instead, a supplemental list of 21 names A-Z (excluding Q, U, X, Y & Z) has been created and approved for use if the number of named Atlantic Tropical Storms is to exceed 21 [7].

The hurricane outlooks accurately predicted a high likelihood of an above-normal season – resulting in the most storms on record and the second highest number of hurricanes on record. Even at the beginning of the season, there was a general agreement among the forecasts by CSU, National Oceanic and Atmospheric Administration (NOAA) and Tropical Storm Risk (TSR) that there was a high likelihood of an above-normal hurricane season in 2020. While correctly predicting a higher than average number of named storms, the forecasts were generally still lower than observed. As anticipated by CSU, the 2020 Atlantic hurricane season had an anomalously warm tropical Atlantic and La Niña conditions. Nevertheless, the La Niña was a bit stronger than anticipated.

El Niño and La Niña are opposing phases of what is known as the El Niño-Southern Oscillation (ENSO) cycle. The associated complex weather patterns result from variations in ocean temperatures in the equatorial Pacific. ENSO has an influence on the hurricane formation both in the Atlantic and the Eastern Pacific Basin. El Niño (warm phase) is based on warmer than usual sea surface temperatures in the equatorial Pacific. Simply put, El Niño favors stronger hurricane activity in the central and eastern Pacific basins, and suppresses it in the Atlantic basin. Conversely, La Niña which is characterized by colder temperatures in the equatorial Pacific, suppresses hurricane activity in the central and eastern Pacific basins, and enhances it in the Atlantic basin. These impacts are primarily caused by changes in the vertical wind shear, changes in wind speed and direction between roughly 5,000 to 35,000 ft. above the ground. Strong vertical wind shear can suppress a developing hurricane [8].

The tropical Pacific Ocean remains characterized by weak La Niña conditions. Even though an eventual transition from La Niña to ENSO-neutral conditions is expected during the upcoming summer, it is unlikely that El Niño will be prevalent during the 2021 Atlantic Hurricane Season. The newest statistical and dynamical ENSO model outcome from NOAA shows a 44 percent likelihood of La Niña conditions during the peak development month timeframe (August-October) and a 46 percent chance a ENSO-neutral event. There is low 10 percent chance of El Niño [9]. Sea surface temperatures in the subtropical North Atlantic remain above-normal. The expected conditions result in the reduction of trade winds throughout the Atlantic’s Main Development Region (including the Caribbean Sea and tropical North Atlantic) that typically causes additional cyclonic vorticity (spin) and decreased vertical wind shear [10]. 

Each of these parameters should allow for more favorable atmospheric and oceanic conditions that lead to above-average cyclogenesis. According to CSU the biggest difference of the current situation to previous years ins that at this time the North Atlantic Oscillation (NAO) is in neutral conditions. A positive NAO pattern normally highlights warm waters along the U.S. East Coast and colder waters in the far North Atlantic and tropical Atlantic. Nevertheless, the current Atlantic sea surface temperature anomaly is well correlated with active Atlantic hurricane seasons.

The accuracy of hurricane season forecasting increases as the peak of the Atlantic hurricane season approaches, with uncertainty dropping.

The table below summarizes the predicted number of storm events for 2021 by several meteorological organizations. Regarding the predicted numbers of tropical storm events, taking all published predictions together, the 2021 hurricane season is expected to be slightly above the long term average (1950-2020), with 15 to 18 tropical storms forecasted. An above average season is indicated by seven to nine storms reaching hurricane strength and two to four becoming major hurricanes. The predicted numbers for storms and hurricanes making landfall in the US by Tropical Storm Risk (TSR) and AccuWeather are above the long-term norm with two hurricane landfalls. However, those predictions are associated with even higher uncertainties which is why most institutes refrain from issuing hurricane landfall projections. It should be stressed that the precision of hurricane outlooks issued in early April is low, and thus that forecast uncertainties remain large for the 2021 hurricane season. These uncertainties apply already to the underlying projections for the El Niño Southern Oscillation and the North Atlantic Oscillation [11].

It is important to consider that only one hurricane or a super storm like Harvey (2017) making landfall could have a catastrophic impact on the insurance industry. It does not require an active hurricane season for the insurance market to experience significant losses.