Property insurers are nervously watching predictions for the Atlantic hurricane season that begins on June 1.

Three forecasters predict four intense hurricanes in the Atlantic Basin, well above the long-term average of two to three intense storms. Warmer sea surface temperatures and a transition to neutral El Niño conditions are expected to enhance hurricane activity.

While it will not come as news to agents in coastal states, an A.M. Best Co. special report showed insurers’ pullback from hurricane prone states accelerated in the 2005-2009 period compared with homeowners’ multiperil business written earlier in the decade. The top 10 A.M. Best rated writers’ market share fell more than eight percentage points from 2005-2009 in Louisiana; about three percentage points in Mississippi; and more than nine percentage points in Texas.

Meanwhile, the five-category system that describes a hurricane's strength and the havoc its winds could bring to the U.S. has been altered for the 2010 storm season. Gone from the Saffer-Simpson Wind Scale are estimates for storm surge and inland rainfall. Chris Landsea, science operations officer at the National Hurricane Center and leader of the team that made the changes said they were made to eliminate confusion over storm surge and flooding predictions that didn’t match what happened when hurricanes make landfall.

Insurers Watching Ominous Forecasts (Insurance Journal 5/17/10)

Hurricane Scale No Longer Has Storm Surge, Inland Flooding (Insurance Journal 5/17/10)

May 18, 2010