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EQECAT Narrows Range Of Estimated Onshore Insured Losses From Hurricane Ike Based Upon Reconnaissance-Team Reports, Review Of Storm's Characteristics

Also Estimates Total Economic Loss To Gulf Of Mexico Offshore Facilities

September 19, 2008

Oakland, California

EQECAT, Inc., the leading authority on extreme-risk modeling, Friday afternoon (Eastern Time) said, based upon reconnaissance-team reports of damage caused by Hurricane Ike, and additional post-landfall data regarding the storm’s characteristics, it has narrowed its estimated onshore insured losses to a range of $8 billion to $12 billion, from an initial estimated range of $8 billion to $18 billion at the storm’s landfall.

In addition, EQECAT said, based on its Gulf of Mexico Offshore Energy Model (OEM), total economic loss to offshore oil and gas facilities from Hurricane Ike is estimated to be in the range of $4 billion to $6 billion, with property damage making up about $1.5 billion to $2 billion, and lost production accounting for about $2.5 billion to $4 billion. Total offshore insured losses are likely to be only a small portion of total economic offshore losses.

Offshore property damage estimates include removal of debris and extra clean-up expense in a range of $250 million to $400 million.

As of September 18, 2008, the United States Minerals Management Service reported that 49 producing platforms and 3 jack-up drilling rigs were destroyed by Hurricane Ike. Several other platforms and drilling rigs sustained moderate damage, EQECAT said.

Very Few Serious Structural Failures Identified In Downtown Houston

“Hurricane Ike was observed to take a more easterly track than originally forecast, placing downtown Houston on the leeward side of the storm,” said David Smith , senior vice president of EQECAT. “Observations by members of the ABSG Consulting Inc. reconnaissance-teamin the downtown Houston area identifiedvery few serious structural failures. There was widespread incidence of low-level damage, an occurrence consistent with winds of a Category 2 storm.”

“Furthermore, regional power outages appear to have been driven largely from the failure of the lower-voltage distribution lines,” he said. “Lower voltage lines are closer to the ground and more susceptible to damage from debris. Power outages have been widespread and will contribute to business interruptions in this area,” he said.

EQECAT said storm-surge related damage appears to be confined to the coastal areas and is not as great as initially anticipated by the National Oceanic and Atmospheric Administration (NOAA). Low lying areas like the NASA Johnson Space Center do not appear to have suffered extensive damage.

“While Galveston suffered significant damage, the total surge and wave height were far less than originally forecast, and buildings elevated above the total surge height generally were not severely damaged,” Mr. Smith said.

Beyond wind damage to commercial and residentialfixed structures, such as office buildings, factories, warehouses, and homes, EQECAT’s insured loss estimates include business interruption, as a result of the destruction of property; and demand surge, which occurs when the demand for products and services to repair damage significantly exceeds the regional supply. Thus, these products and services may have to be brought to the region quickly from distant points, resulting in additional costs for transportation, packaging and manufacture.

Excluded from EQECAT’s insured loss estimates are losses related to flooding, private and commercial automobiles and similar vehicles.

Offshore Energy Estimates Based Upon EQECAT’s Offshore Energy Model

EQECAT’s estimates of the impact on offshore energy were developed through its Gulf of Mexico Offshore Energy Model (OEM). This model helps oil and gas producers, insurers and reinsurers to manage hurricane risk for offshore assets. Currently, the model covers exposures in the U.S. Gulf of Mexico. The EQECAT OEM was launched in May 2007 and is based on rigorous science, engineering research, and robust mathematical methodologies.

ABSG Consulting Is A Leading Global Provider of Risk Management Services

ABSG Consulting Inc. (ABS Consulting) is a leading independent global provider of risk management services, combining industry specialists, risk modeling and practical engineering and technology solutions to help business, finance, industry and government manage risk. Through a comprehensive and integrated risk management approach, ABS Consulting is committed to helping clients reduce business interruption and manage catastrophic, operational, and security risks. ABS Consulting is headquartered in Houston, Texas. For additional information, please visit www.absconsulting.com

EQECAT Software Enables Clients Worldwide To Assess, Manage Wide Range Of Risks

EQECAT and its parent ABSG Consulting Inc. (ABS Consulting) serve the global property and casualty insurance industry, major multinational corporations and financial institutions. EQECAT is known as the technical leader and innovator in the development of analysis tools and consulting services to quantify exposure to natural and man-made catastrophic risk.

Through its extreme-risk modeling software platform, WORLDCATenterprise™, EQECAT enables clients to assess and manage potential damage and loss from wind, earthquake, flood, wildfire, and terrorism, among other perils. WORLDCATenterprise™ includes 177natural hazard software models for 89 countries spanning six continents.

EQECAT was founded in 1994 and is headquartered in Oakland, California. For additional information, please visit www.absconsulting.com and www.EQECAT.com.

For more information, contact:

Eric R. Samansky
The Samansky Group
1-516-319-0858 | eric@samanskygroup.com