El Niño has undoubtedly impacted the 2023 hurricane season. But it is not the only weather pattern that is exerting influence. Ocean temperature — also known as sea surface temperature — is also driving the storms swirling in the Atlantic Ocean. As reports of record-breaking temperatures in the Atlantic appeared this summer, scientists at the National Oceanic and Atmospheric Administration (NOAA) began to postulate that this season will be an above-average one.
As the season progresses, the question has now become: How will insurers fare if one, two or even several storms bring damage to the U.S. housing market?
Another burning question that this conversation touches on is how this summer’s Typhoon Dora in the Pacific Ocean may have created weather patterns that influenced the August wildfire on the Hawaiian island of Maui.
In this episode, host Maiclaire Bolton Smith continues the conversation with CoreLogic's Director of Catastrophe Response Jon Schneyer to talk about if insurers are ready for another storm to hit the U.S. and what this season could bring.
In This Episode:
0:44 - How is the insurance industry going to fare if we get multiple bad storms this year?
3:45 – What does the appearance of EL Niño mean for Pacific hurricane activity? Are the devastating wildfires of Maui connected to this climate phenomenon?
6:18 – Erika Stanley talks about what is going on in the world of weather in the Natural Disaster Digest.
Find full episodes with all our guests in our podcast archive here: https://clgx.co/3zqhBZt
Transcripts
Maiclaire Bolton Smith:
If one or two or more of these events did hit a big city, from an insurance angle, how are insurers going to fare with another loss?
Erika Stanley:
our miniseries about what the:
To recap, we welcome John Schneyer, CoreLogic's Director of Catastrophe Response to talk about how the shift to El Niño weather patterns, and persistence of elevated sea surface temperatures, has primed the U.S. for an above-average hurricane season. Let's jump into it.
MBS:
on Florida. If we go back to:
From an insurance perspective, how is the insurance industry going to fare if we get another bad or multiple bad storms this year?
Jon Schneyer:
It's a great question. What we can say is that the lessons we've learned from last year are looking like they're making a pretty substantial difference.
We look at the impact from Hurricane Ian almost 12 months after the event, and it does appear that the losses, the insured losses from that, will fairly manageable, thanks in part to the modern building codes there in Florida have actually mitigated a fair amount of the wind damage, which will obviously lower the final bill. A lot of the legislative changes that have been made in Florida seem to be working from what I've read. There are a number of private insurers reentering the market there in Florida, taking away some of the load from citizens, the sort of state-backed insurer of last resort, which will definitely make things easier if we get a big hurricane.
Let me say, Ian was a big Category 4 hurricane, and it seems to be manageable, which is not to say if another Category 5 hit Miami directly or maybe somewhere with less stringent building codes somewhere else on the Gulf, I don't want to come out and say that we're all doomed, but it does seem that the insurance industry as a whole has made a lot of changes. They have the capital to withstand a major hurricane. They have their reinsurance, albeit it was more expensive this year than it had been previously, but they're adequately capitalized. They're certainly able to weather a major hurricane making landfall. Two or three in a single season could be another story. It really depends on the nature of those hurricanes, where they hit. So many things.
MBS:
Yeah. I think there's a lot to be seen on where it hits and the impact that it does have, too. Hopefully, we can just hope even if there are a lot of storms, that they don't impact people and have major impacts like some of the ones in recent years have. It is just that the more we have, the higher the probability of them actually hitting something is.
Okay. We've kind of focused on the Atlantic with El Niño. El Niño's not just something that impacts the Atlantic, I would assume. Does it mean anything for the Pacific. Specifically, I'm thinking of Maui, and what has just happened with the very devastating wildfire there. Hurricane Dora did pass by the Hawaiian Islands, right around that same time as well. Is any of this connected to El Niño activity?
JS:
It is a good question.
I think it's important to separate maybe the impacts of climate change from the impacts of ENSO on various parts of the world. Which is not to say that ENSO, or El Nino, don't have other effects. They do. They have plenty of effects on the weather patterns across the globe.
In the U.S. for example, there isn't a particularly strong signal between El Niño and weather patterns in the U.S. during the summer months. In the winter months, it does tend to be drier in the U.S. relative to La Niña neutral conditions, especially there in the Pacific Northwest area.
What happened in Hawaii, and Maui, recently has less to do with ENSO, and more to do with the fact that it had been dry there in Hawaii. We don't know the cause of the wildfire, at this point. We don't know necessarily where it started. As of today's date, they haven't been able to figure that out. But the conditions there on the island, thanks in part to Hurricane Dora creating sort of a really strong pressure gradient across the islands, the wildfires were able to spread fairly quickly through Lahaina.
It's important to distinguish that this isn't necessarily an ENSO thing. Extended periods of dryness are going to create more optimal environments for wildfires. Granted, I would always be hesitant to attribute a single event to climate change, or even ENSO, just as a general trend, if it's going to be warmer and drier for long periods of time, things will dry out, easier for wildfires to spread.
MBS:
Got it.
We talk a lot on the wildfire risk in California and western U.S., so something that really could impact the wildfire season ahead of us, as well.
JS:
Sure, absolutely. It could have an effect.
ES:
Before we finish this episode, let's take a break and talk about what's happening in the world of natural disasters this season. CoreLogic's Hazard HQ Command Central reports on natural catastrophes and extreme weather events across the world. A link to their coverage is in the show notes.
on by downloading CoreLogic's:
In August, the southwestern U.S. experienced a rare hurricane. Hurricane Hillary made landfall over the northern Baja California Peninsula, putting 1.5 million homes at risk of inland flooding. At the same time that this storm was soaking Southern California, there was also a 5.1 magnitude earthquake about 80 miles northwest of Los Angeles. Although the earthquake shook some nerves, it did not appear to cause any major damage. And that's the Natural Disaster Digest.
Maiclaire Bolton Smith
All right. Well, John, I know this is not the last time we will be talking with you, and probably not even before the end of the season. So, thank you so much for joining us today for this perspective. And you'll be back when a big event happens, I know it.
JS:
Well, I would say I'm looking forward to it, but that would mean another natural disaster. But I will be here if there's another event.
MBS:
We are grateful for you. So, thank you so much for joining us today on Core Conversations: A CoreLogic Podcast.
And thank you for listening. I hope you've enjoyed our latest episode. Please remember to leave us a review and let us know your thoughts. And subscribe wherever you get your podcast, to be notified when new episodes are released. And thanks to the team for helping bring this podcast to life, Producer, Jessi Devenyns; editor and sound engineer, Romie Aromin; our facts guru, Erika Stanley; and social media duo, Sarah Buck and Makaila Brooks.
Tune in next time for another Core Conversation.
ES:
You still there? Well, thanks for sticking around. Are you curious to know a little bit more about our guest today? Well, Jon Schneyer is the Director of Catastrophe Response here at CoreLogic. Jon aims to keep CoreLogic clients informed of weather risks by monitoring potential events, determining the scope of the response, coordinating with internal stakeholders, and providing up-to-date content. You can read more of his event response coverage on hazardhq.com. The link is in the show notes.
