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BERMUDA | RSS PODCAST

Brace for 2006 hurricane season

A London-based storm forecaster, that accurately predicted unprecedented storm activity this year, yesterday warned those living and working in hurricane-prone areas to brace themselves for another surge in activity next season.

The warning will be worrying to Bermuda residents, battered by Hurricane Fabian in 2004, as well as the Island?s insurers and reinsurers, having been hit by multi-billion dollar bills in the last two years from hurricane damage to areas in the US.

The 2006 forecast, from forecaster Tropical Storm Risk, is for activity to be 60 percent higher than the norm over the last 55 years.

This year saw 14 hurricanes, the largest number on record for any one year. The 55-year norm is for about ten tropical storms to form each year, and for six of those to develop into hurricanes of varying intensity.

The bill from this year?s storm activity is also likely to be the highest ever. The cost to put Gulf Coast areas to rights after Hurricane Katrina hit on August 29 is estimated to be in the region of $200 billion. The bill to insurers could be $60 billion of that.

Rates for property and catastrophe insurance and reinsurance premiums are expected to rise in 2006 because of the size of 2005 losses, and insurers may charge even more if signs are that 2006 could produce another bumper crop of storms.

But professor Mark Saunders, TSR?s lead scientist, said the devastation seen through the Gulf region this year is not likely to repeat itself in 2006.

?Despite the forecast for another active hurricane season in 2006, the chance of seeing as many as five intense hurricanes in the Gulf, as happened in 2005, is extremely remote.?

TSR, in a release issued by one of its partners, insurance brokerage Benfield, said there is an 81 percent chance that 2006 will be one of the three most active years in terms of hurricanes making landfall in the US.

The bulk of the hurricane claims insurers and reinsurers are liable to pay come from US policyholders.

And a significant portion of that bill typically ends up in the hands of Bermuda insurers and reinsurers, active sellers of property-catastrophe insurance and reinsurance policies in Florida, and other prone areas.

Five tropical storm are predicted to follow a path on to land in the US, and two of the strikes will be hurricane strength.

The two main climate factors influencing the TSR hurricane forecast for 2006 were said to be the speed of westerly trade winds in the Atlantic and Caribbean Sea during August and September, as well as sea temperatures between west Africa and the Caribbean where many hurricanes develop

Hurricanes are responsible for eight of the ten most costly catastrophes throughout US history.