Forecasters predict the Atlantic hurricane season, which officially starts June 1, will see well-above-normal activity, but whether that will equate to higher insured losses depends on multiple factors, with landfall location being a top indicator.

National Oceanic and Atmospheric Administration forecasters last week said up to seven major hurricanes – Category 3, 4 or 5, with winds of 111 miles per hour or greater – could form in what is expected to be an “extraordinary” Atlantic hurricane season.

NOAA expects up to 25 named storms (winds of 39 miles per hour or greater), of which eight to 13 could become hurricanes (winds of 74 mph or greater).

Colorado State University forecasters said April 4 they expect “an extremely active” season, with 23 named storms predicted, including 11 hurricanes and five major hurricanes. This is the highest prediction for hurricanes that CSU has ever issued with its annual April outlook.

“We anticipate a well-above-average probability for major hurricanes making landfall along the continental U.S. coastline and in the Caribbean,” forecasters said.

All indicators at this point suggest this will be a “well above-average” Atlantic hurricane season, said Steve Bowen, Chicago-based chief science officer at Gallagher Re.

Record-setting sea surface temperatures, an upcoming transition from El Niño to La Niña weather conditions and a likely reduction in wind shear and trade winds should allow storms to develop and intensify quickly, Mr. Bowen said.

Historically, during La Niña years a higher number of storms make landfall in the U.S. than during El Niño conditions, he said.

Between 1950 and 2023 there were 28 La Niña episodes, with a total of 50 U.S. hurricane landfalls, compared with 20 El Niño episodes, with a total of 15 U.S. mainland hurricane landfalls, according to Gallagher Re.

But years of high activity don’t necessarily translate to high insured losses, Mr. Bowen said. “What truly is going to be the driver here is what are the steering currents and where are these events actually going to go,” he said.

There’s a relatively weak correlation between hurricane activity and insured losses, said Karen Clark, founder and CEO of Boston-based catastrophe modeler Karen Clark & Co.

“Hurricanes are like real estate. What are the three most important things? Location, location, location,” Ms. Clark said.

In 2020, for example, there were 11 named storms that made landfall – a record number – but the annual insured loss from hurricanes was only about $20 billion, because none of them hit highly populated areas, she said.

“It just takes one Category 4 hurricane to make landfall near Miami or near Galveston/Houston to get a $100 billion loss,” she said.

Hurricane intensity and landfall location are crucial factors in determining insured losses, said Mark Bove, meteorologist and senior vice president of Natural Catastrophe Solutions at Munich Reinsurance America Inc., based in Princeton, New Jersey.

“Hurricanes don’t become disasters until humans get in their way,” Mr. Bove said.

Hurricane Idalia, for example, which came ashore last year in the Big Bend region of Florida was a Category 3 storm at landfall, but insured losses are still estimated to be low because there were no major concentrations of exposure in its path, he said.

Hurricane Ian in 2022 came ashore in a heavily populated area on the southwest Florida coastline, resulting in about $50 billion in insured losses, Mr. Bove said. “It does depend on where it makes landfall and the intensity of the storm itself,” he said.

There’s been a continued population migration trend to the Gulf and Atlantic coasts, Mr. Bowen noted.

“We’re seeing more and more people moving into these high-risk areas. That is enhancing the potential of losses growing more expensive if one of these storms comes ashore,” he said.

Between 2017 and 2023 the industry saw “tremendous amounts of insured loss” due to hurricanes, Mr. Bove said. “Because of both socioeconomics and the recent severity of hurricanes coming ashore, things have been elevated as far as claims payments due to tropical cyclone,” he said.