The 2020 Atlantic hurricane season was a record breaker, with 30 named storms in a single year and 10 in September alone. However, concerns for this season are already rising due in part to fragile supply chains, workforce shortages and potential technology disruptions. Regardless of where your operations are located, it’s important to plan for multiple loss scenarios in preparation for the upcoming hurricane season. Here are four perspectives to consider for this season.

1) The likelihood of impactful tropical cyclones and hurricanes is high. As we enter another hurricane season, the National Oceanic and Atmospheric Association (NOAA) has predicted an above-average number of storms,¹ following five consecutive years of above-normal storm development. While forecasts are never perfect, it’s reasonable to assume that it’s more a matter of when versus if a major storm will impact the U.S. in 2021.

2) The cost of recovery for impacted areas will grow. Tropical cyclones and hurricanes continue to lead in destruction and deaths² among the billion-dollar disasters tracked by NOAA. The impact from high winds and storm surge on communities can result in staggering losses. In 2020, there were seven storms that generated over $1 billion in damages, higher than the last five years. Damage from a single hurricane can also be staggering. Hurricane Laura made landfall with winds up to 150 m.p.h. and over 15 feet of storm surge. Many damaged utility systems exacerbated the losses and extended the recovery. The total impact from this Category 4 storm is estimated at $19.2 billion. Population growth and extensive development in vulnerable areas will only add to the cost of future losses.

3) Hurricane resilience will need to address an evolving workplace. The pandemic altered how and where we work, and the change continues into this year’s hurricane season. A recent PwC survey³ polled 133 executives and found that while only 13% were prepared to “let go of the office for good,” less than one in five said they wanted to “return to the office as it was pre-pandemic.” Business leaders need to carefully consider how this may impact their ability to prepare for, respond to and recover from major storm events.

4) Resilience strategies must account for fragile global supply chains and protracted recovery times. Many business sectors are currently facing workforce and raw material shortages. Innovative business resilience models are critical to organizations that endeavor to secure their competitive advantage and respond to changes in the global risk outlook.  Resilience exercises should consider impacts due to loss of raw material/finished good deliveries from outside the U.S., delays in the ability to replace key equipment or technology, impacts to vulnerable operations and critical suppliers affected by unprecedented winds, and in-land/coastal flooding from a tropical cyclone. Organizations that can quickly detect a threat, prepare a response and manage crisis communications will be best positioned to lead in their market.

Innovation this hurricane season will enable business leaders to continue to adapt to a changing workforce and develop supply chain strategies to endure potential disruptions. Read CNA’s updated Hurricane Preparedness resources for simple checklists to consider before, during and after a tropical cyclone or hurricane event. Preparedness takes time and resources to protect your organization. Talk with your insurance agent or broker to ensure you have the right coverage and support.

_{Reference sources:}

_{1. https://www.noaa.gov/media-release/noaa-predicts-another-active-atlantic-hurricane-season
2. https://www.ncdc.noaa.gov/billions/#:~:text=In%202021%20(as%20of%20April,effects%20on%20the%20areas%20impacted
3. https://www.pwc.com/us/en/library/covid-19/us-remote-work-survey.html}