Summary: Jefferies published meteorological data indicating the Atlantic hurricane season has remained benign through its statistical peak on September 10, with only five named storms and no hurricanes recorded. The firm noted that if the season continues on its current trajectory, the global reinsurance industry could record a profitable third quarter in 2026.
Forecaster updates accompanied the Jefferies release. Colorado State University kept its overall Atlantic storm count forecast unchanged but reduced probabilities for landfalls in several regions. The university's updated probabilities are: a 16% chance for a landfall anywhere along the entire US coastline, down from 17%; a 7% chance for the US East Coast including Florida, down from 8%; a 9% chance for the Gulf Coast from the Florida Panhandle, down from 10%; and a 17% probability for a major hurricane striking the Caribbean, reduced from 19%.
Another outlook revision came from Tropical Storm Risk, which cut its August forecast. TSR now expects 10 named tropical storms in the Atlantic this season instead of the 11 it had projected a month earlier. It also lowered its estimate for hurricanes to four from five, and for major hurricanes to one from two. TSR attributed the downward revisions to less favorable conditions in the sub-tropical Atlantic compared with the prior month.
Alongside the relatively quiet hurricane picture, the insurance and reinsurance sectors have recorded sizable losses from convective severe weather events. The US Midwest and Mid-Atlantic experienced a severe convective storm outbreak from August 9 to August 12 that Guy Carpenter estimated produced insurance industry losses of $5.1 billion, placing it among the top 10 loss events for the industry. Gallagher Re reported that, year-to-date, industry losses from US severe convective storm activity have exceeded $35 billion.
Europe also faced notable convective activity. A severe convective storm outbreak from August 24 to August 28 impacted parts of Western Europe, including France, Switzerland and Italy. Gallagher Re expects total industry losses from that European event to reach 2.5 billion.
Separately, Nepal's government provided an estimate of the economic damage from late August flooding, placing total losses at about $1.3 billion and indicating rebuilding costs could reach up to $5 billion.
These developments have produced a mixed picture for risk carriers. On the one hand, a subdued Atlantic hurricane season to date suggests lower-than-anticipated hurricane-driven insured losses through the season's peak. On the other hand, convective storm losses in the US and Western Europe, and flood damage in Nepal, have already created significant industry payouts.