Acrisure Re forecasts “above average” 2025 Atlantic hurricane season

The upcoming 2025 Atlantic hurricane season is expected to see “above average” activity, though likely less extreme than in 2024, with the reinsurance market appearing well-positioned to manage it, according to Acrisure Re, the re/insurance division of Acrisure.

In its annual Pre-Season Hurricane Outlook, Acrisure Re noted that Atlantic Sea Surface Temperatures (SSTs) in key storm regions are cooler than in 2024, which may help reduce activity, though they remain above average.

The El Niño-Southern Oscillation (ENSO) is predicted to be neutral, suggesting a likelihood of hurricane-suppressing wind shear.

Meanwhile, conditions in the Sahel region are close to average, making it unlikely that Saharan dust will significantly suppress hurricane activity.

Overall, statistical and dynamical models—along with a review of key environmental variables—point to a slightly above-average hurricane season in 2025.

This year’s forecast carries greater uncertainty, as no single factor is expected to dominate. If the Atlantic is warmer than anticipated and the tropical Pacific transitions to a La Nina phase, it could lead to a more active season with the oceanic conditions synchronising, as they did in 2024. Alternatively, if the Atlantic is cooler than expected and the ENSO phase remains neutral, it could lead to a below-average season.

As a reminder, the active 2024 season saw five major hurricanes, including Helene and Milton, which caused a combined economic loss exceeding $110 billion and around $40 billion in estimated insured losses.

Acrisure Re noted that the reinsurance industry is now in a much stronger position to absorb major events like Helene and Milton, due to several years of market hardening and improved terms and conditions.

The report highlighted that reinsurance capital is at an all-time high. Reinsurers’ composite returns on capital exceed the cost of capital, further supported by strong investment income. Currently, capital supply in the reinsurance market exceeds demand.

Simon Hedley, CEO, Acrisure Re, said, “The January 2025 renewal season saw US property catastrophe reinsurance rates decline by 5% to 15% on a risk adjusted basis. Mid-year Florida renewals also saw rates decline even further from last year. Looking ahead to the 2026 renewals, much will depend on weather activity. As always, Acrisure Re will be monitoring the tropics and providing real-time updates both before and after any potential events using our suite of tools and analytics.”

Ming Li, Partner and Global Head of Catastrophe Modelling, Acrisure Re, added, “Current indicators, including above-average Atlantic Sea surface temperatures and a projected neutral ENSO phase, point to an average to slightly above-average North Atlantic hurricane season in 2025. As these conditions continue to develop, Acrisure Re is closely watching the data to help clients prepare and respond with greater precision and confidence.”

Looking ahead to the 2026 renewals, Acrisure Re said that a quiet hurricane season would likely place further downward pressure on rates, given the abundant capital and increasing reinsurer appetite for property catastrophe risk.

The market appears well-positioned to manage a slightly above-average hurricane season, even amid earlier impacts from the California wildfires and a highly active severe convective storm season, the company said.

However, an exceptionally active hurricane season would likely place meaningful pressure on the balance between capital supply and reinsurance demand.