The US National Hurricane Center (NHC) has predicted a 2006 Atlantic storm season of 'above average' intensity, prompting fears that insurers such as Lloyds of London could again be facing a year of significant losses.
The NHC’s assessment points to a forecasted 16 named storms for the summer 2006 storm season, although it predicts that none will be on the scale of hurricanes Rita and Katrina seen in 2005. The NHC says that the water in the Atlantic ocean is not as warm as this time last year, making it less likely that we will see devastation on the scale of that caused in 2005.
That said, insurers are likely to be concerned about the prospect of another costly year. The London Evening Standard newspaper reports that Lloyd’s of London has written off up to GBP4.5 billion over the last two years in storm damages, and has suffered due to its exposure to the energy industry. Much of the damage to the US’ oil production and refining infrastructure is still being repaired from 2005.