AIR Adds European Windstorm Model to CLASIC/2, Providing Insurers Detailed Risk Analysis Based on Physical Modeling

Boston, January 19, 2004 — AIR Worldwide Corporation (AIR) today announced that its Extratropica lCyclone Model for Europe has been incorporated into CLASIC/2TM,AIR's detailed risk modeling software system. The model, which incorporates the most complete and consistent set of atmospheric data available,is based on Numerical Weather Prediction (NWP), the methodology used by major meteorological agencies around the world. The model also incorporates local engineering expertise to determine better the impact of wind on structures in the 12 European countries covered.

The new release of AIR's model for CLASIC/2 will enable European insurers and reinsurers, for the first time, to estimate windstorm losses at the individual risk and policy level utilizing risk modeling techniques based on the actual physics of the atmosphere.

Atmospheric conditions for extratropical cyclones tend to be complex, with multiple high pressure ridges, low pressure troughs, fronts and strong jet stream winds, all interacting to produce damaging winds. NWP enables AIR's model to capture these complex atmospheric conditions and accurately depict the time-dependent, three-dimensional structure of the winds associated with extratropical cyclones. In fact, it is the vertical component of the model that enables the simulation of phenomena such as "gravity waves" and "sting jets" that result in the strongest wind gusts at the surface and typically cause the most serious damage.

The damage estimation component of the AIR model is based on extensive research by AIR's engineering team using on-site analysis combined with loss data from actual storms. Variations in historical storm experience have prompted different construction techniques and building practices across the continent. AIR engineers have taken these variations into account by developing separate damage functions for each modeled country and for different regions within countries, where appropriate.

"Only by using NWP and region-specific damage functions can catastrophe modelers accurately estimate losses from extratropical cyclones," said Uday Virkud, senior vice president at AIR. "Furthermore, because the most intense winds in these complex storms are typically highly localized, as was seen in storms such as Lothar and Martin, it is important to model insurance portfolios at the highest resolution possible. CLASIC/2 will accept detailed property and policy data, providing the most accurate view of the loss potential."

Reinsurers have been using AIR's NWP-based European windstorm model to assess risk portfolios since 2000 in CATRADER®. Insurers, reinsurers and intermediaries can now use the model within CLASIC/2 to estimate loss potential down to an individual risk. Furthermore, exposures can be modeled across borders for select countries or for all 12 countries included in the model. Model output can be used for pricing, risk selection, portfolio optimization and reinsurance buying.

About AIR Worldwide Corporation
AIR Worldwide Corporation (AIR) is a leading risk modeling company helping clients manage the financial impact of catastrophes and weather. Utilizing the latest science and technology, AIR models natural catastrophes in more than 40 countries and the risk from terrorism in the United States. Other areas of expertise include site-specific seismic engineering analysis, catastrophe bonds and property replacement cost valuation. Founded in 1987, AIR offers its insurance, reinsurance, corporate and government clients a complete line of risk modeling software and consulting services that produce consistent and reliable results. Headquartered in Boston, AIR has additional offices in North America, Europe and Asia. For more information, please visit

About ISO
ISO is a leading source of information, products and services related to property and liability risk. For a broad spectrum of commercial and personal lines of insurance, ISO provides data, analytical and decision-support products; consulting; data processing; and technical, statistical and actuarial services. ISO field services include on-site rating and underwriting services and the evaluation of community loss-mitigation efforts. ISO's products help customers with sales and prospecting, underwriting, rating and quoting, customer management, policy administration, product development, claims administration and fraud detection. ISO's AIR Worldwide subsidiary provides technologies to assess and manage natural and man-made extreme-event risk. Through its ISO Claims Services, Inc. (iiX unit) and Intellicorp subsidiaries, ISO provides motor vehicle reports and criminal-records information and through its AscendantOne unit delivers rating, quoting and policy-administration solutions. In the United States and around the world, ISO serves insurers, reinsurers, agents, brokers, self-insureds, risk managers, insurance regulators and other government agencies.

Release: Immediate

Giuseppe Barone / Erica Helton
MWW Group (for ISO)
201-507-9500 /

Mike Gannon (AIR)

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