EQECAT Provides Risk Modeling to Munich Re in Transferring European Windstorm and Turkish Earthquake Risks to the Capital Markets

Oakland, CA

June 18, 2009

EQECAT, Inc. provided risk modeling to Munich Re in the issuance of a €50m catastrophe bond transferring European winter storm and Turkish earthquake risks to the capital markets, as detailed in the Munich Re press release which follows this Note:

The transaction was the first using EQECAT's updated European windstorm model, Eurowind™," said Dennis Kuzak, Senior Vice President of EQECAT. "The transaction also employed EQECAT's Turkish earthquake model which had been used in a prior analysis, he said. Both models are part of EQECAT's WORLDCATenterprise™ catastrophe management software suite.

EQECAT's European extra-tropical cyclone model is the first to incorporate a hybrid stochastic event set combining the most suitable aspects of both measured and modeled windstorm characteristics. The EQECAT Eurowind model covers 22 countries, providing the largest geographical area of risk of any commercially available probabilistic European wind model.

EQECAT's Turkish Earthquake model incorporates research findings following the 1999 Koaceli Earthquake, as well as a time dependent model for the North Anatolian Fault System. This fault system represents the primary source of seismic risk to the large population centers along the Sea of Marmara, including Istanbul.

EQECAT and its parent ABSG Consulting Inc. (ABS Consulting) provide services to 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 177 natural hazard software models for 89 countries spanning six continents.

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

Munich Re Transfers Windstorm and Earthquake Risks to the Capital Markets

June 9, 2009

Munich Re has issued a €50m catastrophe bond transferring European winter storm and Turkish earthquake risks to the capital markets. This will provide relief in the event of extreme event losses with a statistical return period of 75 years per each peril.

The securities, rated B2 by Moody's, have a three-year term and offer a spread of 900 basis points over three-month Euribor. They cover windstorm risks in the UK, Ireland, France, Belgium, the Netherlands, Denmark and Germany. The second of the bond's risk components, the transfer of Earthquake risks in Turkey, is a transaction on behalf of a client, the Turkish Catastrophe Insurance Pool (TCIP). The risk modelling was developed by the modelling firm EQECAT, while the transaction was structured and arranged by Munich Re.

"Ianus Capital" is the first catastrophe bond covering non-US risks to be issued in 2009, following a period of inactivity caused by the collapse of Lehman Brothers. For the first time, Munich Re has combined risk transfer on behalf of a client with the placement of risks from its own book of business. The investors' paid-up funds will be invested in puttable floating rate notes issued by the KfW banking group. KfW bonds are guaranteed by the AAA-rated Federal Republic of Germany. This minimises the credit and counterparty default risk inherent in some of the previous market transactions.

At the time when it was more difficult to float new issues and when interesting packages were being offered in the secondary market, Munich Re itself actively invested in catastrophe bonds. Member of the Board of Management Thomas Blunck:

"In this way, we topped up our risk budgets and achieved attractive returns. The objective of the current transaction was to obtain cover in the newly revived catastrophe bond market for a period of three years at attractive conditions. It was important to us to place this coverage at a relatively low price with investors having a long-term interest. These are investors who calculate catastrophe bond risk diversification within their own catastrophe bond portfolio and are consequently able to operate with lower spreads. This, in turn, means clients are more willing to transfer their risks to the capital markets as well, so that in the long term the tradeable volume is increased and a liquid and efficient market emerges."

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