Forecasts Mixed On Winter Outlook
The recent abnormally cold weather in the U.S. just a few weeks removed from summer has many forecasters looking ahead to winter. Forecaster agree that El Nino will play a large part in the winter season but their forecast’s have been mixed.
The forecast for the Northeast, the world’s largest heating oil market, called for equal chances of above-, near-, or below-normal temperatures and precipitation. Long-term forecasts for the region are difficult because weather there is generally not influenced by El Nino but by other factors.
Weather researchers believe El Nino was a big reason for the relatively mild hurricane season thus far and for that many insurers are happy. The severity of the upcoming winter season will have an large impact on many different insurance sectors, like auto, property and health.
If the South experiences below average temperatures and above average precipitation, the number of auto accidents could rise significantly with drivers not accustomed to snowy weather. On the flip side a mild winter in the northeast could see auto and property claims fall below normal seasonal levels.
Needless to say most Americans would prefer a mild winter if given the choice, especially residents in the Northeast. With the economy barely out of a recession, residents could use the savings on home heating costs this year.
Insurers would also prefer a milder winter to coincide with the mild hurricane season, their capital levels have yet to recover from the beating it took from the financial crisis.
