EQECAT President Urges Open Standard for Risk Modeling Data to Better Manage Catastrophe Loss Exposure

Oakland, CA

February 25, 2004

(Orlando, FL --) The global insurance industry should use its collective influence to press for an open standard for risk data used in modeling to more effectively assess and manage catastrophe loss exposure, Rick Clinton, president, EQECAT, Inc., told insurers and other industry executives at the company's "2004 Catastrophe Management Summit," here.

EQECAT, the authority in extreme risk modeling, provides leading insurance companies worldwide with innovative, reliable and technically robust tools and solutions, covering natural hazards in 88 countries, the highest number of any organization.

"It doesn't make any sense for all of the modeling companies to force users to adapt to their proprietary data formats to model the same exposures," Mr. Clinton said. "All this does is cause more work with very little benefit," he said.

New Products Geared Toward Tornado, Hail, Winter Storm, Wildfire Perils

In addition, Mr. Clinton announced new models for managing risks due to tornado, hail, winter storm, and wildfire perils, which combined have historically caused considerably greater loss than earthquakes and hurricanes.

Over the last 20 years, these kinds of natural catastrophes have caused more than 50 percent of insurer natural catastrophe losses, in the United States. As a result, these additional perils are impacting the financial results of insurance companies significantly, Mr. Clinton said.

With the introduction of these new models, companies now have the ability to use state-of-the-art technology to assess and manage this exposure. EQECAT offers the most comprehensive set of models for managing US property risk, including earthquake shake, fire (following earthquakes), sprinkler leakage, hurricane, tornado, hail, winter storm (ice), flood and wildfire.

EQECAT Working with ACORD on Open Data Standard

Discussing the need for an open data standard, Mr. Clinton said EQECAT is doing its part to bring about uniformity and "is working with The Association for Cooperative Operations Research and Development (ACORD) to achieve this goal." In addition, he said, "EQECAT was the first catastrophe modeling company to be able to accommodate data in the Cresta Plus format, a market standard for electronic reporting of insurers' exposure data."

Once finalized, EQECAT will adopt the ACORD property insurance data standard, an open source standard. ACORD is a global, nonprofit insurance association whose mission is to facilitate the development and use of standards for the insurance, reinsurance and related financial services industries.

Data provided to reinsurers often are inadequate and considered a serious problem, Mr. Clinton said. Brokers and insurers record exposure information in different ways. "Using a standard format will enable all parties to examine exposure data more efficiently and get a better overall view of exposure to catastrophic events. This in turn can lead to a more favorable view of the insurer's exposure, and a better overall program," he said.

A data standard enables multiple models to be utilized for a more comprehensive view of risk without imposing additional cost of individually formatting the necessary input to the models.

Clinton Unveils New Marketing Tagline

At the conference, Mr. Clinton also unveiled EQECAT's new marketing tagline, "The Technology Leader: Solutions Through Innovation."

Mr. Clinton said the new tagline best defines the company's vision, abilities and direction going forward, to assist its clients to deal with managing and developing effective solutions to increasing perils worldwide.

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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