So when the Colorado State University Tropical Meteorology Project predicts as early as December that we'll have an "above average 2010 hurricane season" starting in June, everyone, especially property casualty insurers like Allstate, Farmers, The Hartford, State Farm and Travelers, should be a bit skeptical.
Hurricane predictors have been wrong most years since 2005 when making predictions way ahead of the season. And in 2005, they were really wrong when the Gulf Coast was hit with three big hurricanes that did more than $70 billion of damage, much of it in New Orleans, which still hasn't fully recovered.
Colorado State professors Philip Klotzbach and William Gray, who disputes global warming, admit they are overreaching a bit. "These ... forecasts have not shown recent-year real-time forecast skill," they said.
Nonetheless insurers should pay attention. Summer hailstorms, winter ice storms and Santa Ana winds have the ability to do damage, but nothing packs the wallop of a Category 4 hurricane. The Insurance Information Institute warns that if The Big One ever hits Miami, it could do $100 billion in insured damage.
The property casualty insurance industry, with reserves of about $500 billion, could weather that kind of disaster, but it would send the fragile economic ecosystem of Florida, which depends on a series of mini-insurers backed up by a questionable reinsurance system, spinning out of control. It would be almost as hard on states like Texas, Mississippi and of course, Louisiana, which depend a lot on state-run insurance systems that are expanding as private insurers retreat.
But hurricane predicting is getting better. Previously forecasters used the "El Nino" effect, the bubble of hot water that pops up in the Pacific, to judge whether there would be more or less storms brewing off the West African coast. It is usually these storms that come tearing across the Atlantic and hit the U.S. Now they're saying that Sahara dust storms play a role, usually in nipping potential hurricanes in the bud.
So perhaps we shouldn't question whether or not the weatherman is right. Any storm warning should be heeded.