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EQECAT Supports California Earthquake Authority's Innovative Use of Capital Markets

March, 2001

Swiss Re Capital Markets Corporation and Goldman, Sachs & Co. recently used a combination of reinsurance and investment capital to arrange $100 million that will be available to California Earthquake Authority policyholders in the event of one or more major earthquakes in the next 23 months. As part of the transaction, the California Earthquake Authority signed a $100 million reinsurance contract with Swiss Reinsurance Company. Swiss Re Capital Markets Corporation and Goldman, Sachs & Co. co-led a private offering and jointly placed $97 million of floating rate notes and $3 million of preference shares that will, in effect, replenish Swiss Re's capital should such an earthquake occur.

EQECAT, Inc.'s team, led by Mahmoud Khater, Ph.D. and Dennis Kuzak, provided modeling and earthquake risk assessment support. EQECAT, a provider of catastrophe management consulting and modeling services, has supported over $1 billion in natural hazard securitization for both financial and corporate institutions.