|Insured Loss |
(millions of dollars)
|45,000||22,274||11,684||10,000||10,000||750 - 1,500 (est.) |
|Total Loss |
(millions of dollars)
|Country||US/Mexico||US Bahamas||US/Barbados||US, Mexico, Cuba||US, Mexico, Jamaica, Haiti||US, Mexico, Jamaica, Cayman Islands|
The strength of a hurricane season is typically judged based on the following factors: frequency of hurricanes, average duration, greatest duration, average intensity and greatest intensity. These factors increase and decrease roughly in line with naturally occurring cycles known as the multidecadal signal. During these cycles, the Atlantic basin experiences periods(20-30 years or longer) of above average or below average hurricane seasons. Meteorologists believe that we entered into a more hurricane-intensive period of the multidecadal cycle starting in 1995. The NOAA publishes the ACE index which measures the strength of hurricanes based on the aforementioned factors. The median score is 87.5%; 117% represents the lower bound for an above average hurricane season. As seen from the exhibit below the last the period from 1995-2005 has seen above average hurricane seasons with an average index score of 1.75% of the median. Currently the NOAA predicts that there is a 75% chance that the 2007 hurricane season will be above average as well. Historically, the average number of US strikes-hurricanes making landfall- has been between 2-4 during above average seasons. This could translate into greater exposure for insurance and oil companies.
Hurricanes cannot form unless the water temperature reaches at least 80 degrees Fahrenheit. Since the character of hurricanes is influenced by water temperature, there is some speculation that global warming may be contributing to the frequency, duration, and intensity of hurricanes. While numerous studies have suggested that increasing global temperatures have had no effect on the frequency of hurricanes, a recent MIT study published, suggests that it may be a significant contributor to the intensity and duration of hurricanes. According to the study, hurricanes have increased in intensity and duration by 50% since the mid 1970s. Other studies by respected meteorologists have demonstrated the low incidence of relationship between a change in anthropogenic carbon dioxide emissions and hurricane frequency. While the costs associated with hurricane incidence have risen dramatically in the past century - a result of locale, development, mobility and incremental increases in wealth - the actual number of hurricanes having either a direct hit upon the Eastern seaboard of the US or a close miss has declined since the 1950s. Even Katrina was a Category 3 storm by the time it made landfall. In fact, the incidence of damage resulting from its landfall may be more closely related to the absence of any improvements in the waterways by the Corps of Engineers over the previous two decades. Global warming and the incidence of hurricanes are likely related, but the type of relationship between the two has yet to be determined.