The First Hurricane of the 2014 Season is Forming off the US East Coast

Tropical Storm Arthur as at 7pm AEST 2 July 2014

I keep a keen eye on the US Hurricane season as it tends to drive premiums, either up or down, depending on the total cost of insured damage.

The first named storm of the 2014 Atlantic hurricane season, Tropical Storm Arthur, is expected to reach Category 1,  hurricane strength by today US time, according to the National Hurricane Center.

Arthur is currently approximately 175 kilometres  east-north-east of Cape Canaveral, Florida and 380 kilometres south of Charleston, South Carolina. Current forecasts predict Arthur will skim the Outer Banks of North Carolina, however as we all know there is a very high degree of uncertainty in both track and intensity of a storm and therefore landfall scenarios further west with direct impacts to mainland USA are possible.

Coastal Carolina University officials prediction the Hurricane Genesis & Outlook (“HUGO”) Project for a slow hurricane is so far holding true. What they originally predicted was a “below to near normal” hurricane season.. Since then HUGO reduced their predictions from five to only four named hurricanes this season.

This forecast of North American hurricanes has no doubt been part of the reasoning for the drop in property insurance premiums this year. I wait with interest to see if the forecast stays on track or the industry gets caught out.