Forecasters see busy hurricane season

As hurricane season officially kicks off this month, forecasters and insurers are bracing for a blustery season.

Citing the U.S. National Oceanic and Atmospheric Administration’s 2008 outlook that calls for a 60 to 70 per cent chance that there will be up to 16 names storms, Environment Canada is warning Canadians, particularly Maritimers, not to be complacent.

“Numerous international forecast centres have declared that this year will fall in line with the general trend of the last decade,” says Peter Bowyer, Program Manager of Environment Canada’s Canadian Hurricane Centre.

Preparedness is likewise being touted for insurers. A panel of professionals from Marsh & McLennan Companies Inc. met recently to discuss how insurers can best weather the season.

Panelists emphasized the need for preparation and noted that technology makes it possible to use short-term hurricane forecasts, as few as 10 days in advance, to design coverage targeting a vulnerable geographic region.

Commercial property catastrophe insurance pricing has decreased from the inflated premium levels of 2006 and 2007, and the supply of hurricane insurance for businesses has increased, said Robert F. Howe of Marsh Inc. “Market rates are below pre-Hurricane Katrina levels and in some cases, below pre-September 11th levels.”

The reinsurance capacity is even plentiful in Florida, the panel noted.

But it added pricing could flatten later in the year if the season is as fierce as forecast.

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