A study looking into the Tropical Storm Risk July forecasts has shown that for the insurance industry, they can assist with better decision making:
https://www.eurotempest.ltd/ace-forecas ... ecurities/
"In preparation for the 2024 hurricane season, Euler ILS set out to challenge the scepticism around the accuracy of seasonal hurricane forecasts. Using over 20 years of observed and forecast ACE data from TSR, they compared static investment strategies with dynamic approaches that incorporated early July or early August seasonal hurricane forecasts.
The results were striking. Strategies using TSR’s July and August forecasts achieved up to 170% higher returns compared to those that ignored them, highlighting their transformative potential for investment strategies. The July forecast was particularly noteworthy, delivering critical insights just in time for the peak of reinsurance trading, which is typically concluded by early July. This timing allows investors to make informed decisions ahead of key market events, optimising returns and effectively managing risk."
How useful are seasonal hurricane forecasts?
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