Hurricane Forecast Increases Importance Insurers Place On Catastrophe Risk Models, EQECAT Says

April 3, 2006

Oakland, California

The widely accepted forecast of more frequent and severe hurricanes in the Atlantic Ocean, Caribbean Sea, and Gulf of Mexico for the next decade or more is increasing the importance that insurers, reinsurers, corporations, and government entities are placing on catastrophic risk models, Rick Clinton, President, EQECAT, Inc., the authority on extreme-risk modeling, has told clients in advance of the 2006 hurricane season which starts June 1.

The current forecast, coming after the industry’s difficult 2004 and 2005 hurricane experience, is putting more pressure on companies to improve their understanding of and to aggressively manage their catastrophe risk, he said in a recent series of group and one-on-one client meetings.

"As a result, in this potentially much more volatile environment, insurers and others are increasingly and wisely moving to a multiple-model strategy, a plan we have long suggested" Mr. Clinton said.

He also disputed the comments by some that risk models in general are neither sophisticated nor accurate enough.

"There has always been uncertainty in the modeling process, which we quantify and help our clients to understand. Therefore, what companies should be looking at is whether their model provides estimates that fall within an acceptable level of uncertainty. With this level of understanding, overall, EQECAT has received positive feedback on our mode's performance from our clients."

Enhanced Modeling Capabilities Planned

"During the past two years the risk perception has changed, and will continue to going forward," said Mr. Clinton. "As the change in weather cycles evolve, so does the perception of risk and EQECAT will continue to take into consideration the underlying factors of those risks to enable our clients to manage their exposures," he said.

In addition to further upgrading EQECAT's hurricane modeling capabilities, Mr. Clinton said the company is nearing completion of plans for the release of other optimized modeling capabilities, supported by its innovative WORLDCATenterprise™ platform, to deal with several perils, including flood and earthquakes, as well as to measure the impact of perils on the offshore energy industry.

EQECAT, Inc. provides state-of-the-art products and services to the global property and casualty insurance, reinsurance and financial markets. EQECAT is the technical leader and innovator of catastrophe risk management models that quantify exposure to a range of natural and man-made catastrophic risks.

Through its modeling software platform, WORLDCATenterprise, EQECAT enables clients to quantify and manage the potential financial impact of natural hazards. WORLDCATenterprise includes 181 natural hazard software models for 95 countries spanning six continents. These models are based upon innovative applications of the latest science, engineering expertise, claims and exposure data and advanced mathematics.

EQECAT, a subsidiary of ABSG Consulting Inc., was founded in 1994 and is headquartered in Oakland, California.

For more information, contact:

pr@eqecat.com

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