2023 Hurricane Season: Will El Niño keep the storms at bay?

You don't need a weatherman to know which way the wind blows, wrote Bob Dylan, but their work sure can help property owners and businesses brace for periods of extreme conditions. However, weather is complex and no matter how much data meteorologists comb through and how precise they try to be, their projections often need to be adjusted.

Catastrophe Risk Research Analyst Mabé Villar Vega from Allianz Commercial explains that experts are dealing with several complex atmospheric conditions occurring at the same time. Many of these interactions are very difficult or even impossible to simulate, especially at larger scale, so predictions often need to be revised. For example, in 2022, there was a significant discrepancy between the near-average outcome and the pre-season forecasts of above-average hurricane activity.

“A series of factors inhibited the formation of cyclones and contributed to a more stable atmosphere than expected,” she explains. “Among these were the presence of Saharan dust, increased vertical wind shear and generally warm, drier-than-usual air across the Atlantic basin leading to the near-average 2022 Atlantic hurricane season.” 

But even in years of subdued activity, violent hurricanes can strike. In 2022, Hurricane Ian, which swiped Cuba and the south-eastern US in late September, became the third costliest hurricane recorded (after Hurricanes Katrina and Harvey). Some 161 people died, and damages passed $113 billion. Hurricane Nicole hit the US on 10 November, making it the latest calendar year hurricane to land on the east coast of Florida.

After hurricanes Charley (2004) and Irma (2017), stricter building standards were implemented in Florida. The roofs destroyed by Irma roofs were rebuilt following the newer building standards, leading to enhanced resistance to wind damage. Without these enhancements, Villar Vega  suggests, the wind damage losses due to Hurricane Ian would likely have been higher. 

The El Niño Southern Oscillation (ENSO) is a natural variation in winds and sea surface temperatures over the Pacific Ocean. The phenomenon consists of three phases: El Niño, La Niña, and a neutral phase. El Niño conditions are currently present, which typically suppress hurricane activity in the Atlantic basin because it creates more stable atmospheric conditions and increases the vertical wind shear.  

There is more than a 95% chance that El Niño conditions will continue at least until February 2024, and greater confidence that this will develop into either a moderate or ‘strong’ El Niño event. However, it is still unclear whether the factors that tend to limit tropical cyclone activity in the Atlantic will be in place during or after the peak of the 2023 hurricane season.   

In a recent Allianz Commercial Outlook report, Villar Vega summarized the 2023 projections of key forecasting institutes and observations. The Atlantic hurricane season begins on 1 June and runs until 30 November. Early forecasts from AccuWeather, Colorado State University (CSU), National Oceanic and Atmospheric Administration (NOAA), North Carolina State University (NCSU) and Tropical Storm Risk (TSR) pointed to a slightly below-average season this year. However, the latest updates point to an above-average season. 

 “This year’s original forecasts were based mainly on the high likelihood that El Niño conditions would develop in the Pacific basin,” Mabé explains. “Typically, when El Niño conditions are present, it suppresses storm development in the Atlantic basin. However, recent forecasts suggest an above-average hurricane season, based mainly on record-warm sea surface temperatures (SSTs) in the Atlantic and Caribbean counterbalancing the effects of El Niño.”

El Niño conditions have been present since spring and are likely to remain at least until the end of winter. However, above-normal sea surface temperatures (SSTs) in the Atlantic and an above-normal West African monsoon (which seeds stronger and longer-lived Atlantic storms) could influence a potentially more active Atlantic hurricane season. 

  • Tropical storms: between 14 and 21 (average season: 14)
  • Hurricanes: between 6 and 11 (average season: 7)
  • Major hurricanes: between 2 and 5 (average season: 3)
Villar Vega says it has been an active start to the season, with eight tropical storms and one hurricane already recorded (plus an additional subtropical storm in January). Except for Tropical Storm Bret, which caused some damage across the Lesser Antilles Islands, the tropical cyclones have mostly remained over the ocean, causing little to no damage. However, the most active months are still to come. 

The notion of a six-month hurricane season covering summer and autumn months stretches back to the 1700s and influenced naval and shipping plans for centuries. The official modern hurricane season was defined in 1935 when the United States Weather Bureau organized a new hurricane warning network. It was gradually stretched to yearly span from 1 June to 30 November.

Some 97% of all Atlantic tropical storms and hurricanes occur within this season, though they can also hit outside the season. Villar Vega  says it is impossible to predict where the next hurricane will land. 

“As long as a property is located in a zone prone to natural catastrophes – be it tropical cyclones, earthquakes, flooding or wildfires – the chance exists for an event to happen and cause damage. Thus, it is necessary to have a preparedness plan in place to minimize the damages from such an event.”

Atlantic Hurricane Season Outlook 2023
Europe’s raw material challenge
The Allianz Group is one of the world's leading insurers and asset managers with more than 122 million* private and corporate customers in more than 70 countries. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing around 706 billion euros** on behalf of its insurance customers. Furthermore, our asset managers PIMCO and Allianz Global Investors manage about 1.7 trillion euros** of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we are among the leaders in the insurance industry in the Dow Jones Sustainability Index. In 2022, over 159,000 employees achieved total revenues of 152.7 billion euros and an operating profit of 14.2 billion euros for the group***.
* Including non-consolidated entities with Allianz customers.
** As of September 30, 2023.
*** As reported – not adjusted to reflect the application of IFRS 9 and IFRS 17.
As with all content published on this site, these statements are subject to our cautionary note regarding forward-looking statements:
A global conundrum: How immigration is writing the next chapter for global economies

The story of immigration and its impact on the labor force isn't about one country or one policy; it's about a global shift in demographics, economies, and societies. Countries across the globe are grappling with the challenges of maintaining a vibrant and productive workforce amidst aging populations and declining birth rates. Allianz Research’s newly published report offers a glimpse into how immigration could be the linchpin in sustaining not just economies, but the very fabric of societies worldwide.

Women Taking On More Financial Responsibility

Women are taking on more financial responsibility, according to the 2023 Women Money Power Study from Allianz Life Insurance Company of North America (Allianz Life). Nearly half of all women (49%) consider themselves to be the chief financial officer of their household. At the same time, women are feeling less secure financially than they did in the past.

Allianz Country Risk Atlas 2024: A compass in times of global uncertainty

To boldly go where no one has gone before requires, well, a good compass. The newly published Country Risk Atlas 2024 from Allianz Research serves as the ultimate guide on this expedition, offering insights into the intricate constellation of economic, political, and ESG factors that shape the non-payment risks in 83 countries. The Atlas reveals hidden risks and opportunities guiding businesses and investors aiming to navigate the unpredictable waves of global markets.