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

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 to $12 billion, from an initial estimated range of $8 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 to $6 billion, with property damage making up about $1.5 to $2 billion, and lost production accounting for about $2.5 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 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-team in 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.

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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