Nine meteorological research organizations have released forecasts for the 2025 Atlantic hurricane season, indicating activity above historical averages but likely below the levels recorded in recent years, according to a note from Moody’s.
The Atlantic hurricane season, which runs from June 1 to November 30, is expected to produce more named storms and hurricanes than the long-term average. The projections exceed both the 1950–2024 baseline and the 1991–2020 30-year average, which includes several highly active seasons. However, overall activity is forecast to be lower than the levels observed in 2023 and 2024, the note said.
According to forecasters, weak La Niña conditions are expected to shift toward ENSO-neutral during the summer. In combination with above-average sea surface temperatures in the Atlantic and Caribbean, relatively low wind shear, and a possibly active West African Monsoon, these conditions are seen as favorable for storm formation.
The average forecast across the nine organizations calls for 16 named storms, eight hurricanes and three major hurricanes. This compares to the 1950-2024 average of 13 named storms, seven hurricanes and three major hurricanes. The 2024 season recorded 18 named storms, 11 hurricanes and five major hurricanes.
The projected Accumulated Cyclone Energy (ACE) Index, which reflects the number, strength, and duration of storms, is expected to reach 137 in 2025, down from 162 in 2024 but still within the "above normal" range, Moody’s said.
Meanwhile, the Colorado State University estimates a 51% chance that at least one major hurricane will make landfall along the US coastline this year, compared to a historical average of 43% between 1880 and 2020.
The high levels of storm activity in recent years have contributed to increased insured losses. In 2024, insured natural catastrophe losses reached $137 billion globally, according to Swiss Re. This marked the fifth consecutive year with losses exceeding $100 billion. The reinsurer estimates that insured catastrophe losses will continue to grow by 5% to 7% annually, driven in part by increased property exposure in high-risk areas.
Meanwhile, the note said reinsurance pricing for property catastrophe coverage has begun to ease. The Guy Carpenter US Property Catastrophe Rate-on-Line Index declined by 6.2% as of Jan. 1, 2025, from peak levels in 2024.
Despite the decline, pricing remains elevated on a risk-adjusted basis. The January wildfires in California may exert some upward pressure on pricing but midyear renewals in the US are expected to see further reductions, particularly at higher return periods, as additional capacity enters the market.
Demand for reinsurance remains steady, and terms and conditions are generally holding firm. Many primary insurers continue to retain more risk at lower return periods as part of ongoing adjustments to their risk management strategies, the note said.
