BOSTON, Jun. 13, 2006 — AIR Worldwide President and CEO Karen Clark will advise members of Congress and their senior staff today that hurricanes and earthquakes have the potential to cause insured losses in excess of $150 billion and total economic losses approaching $500 billion. Ms. Clark is participating in a seminar at the U.S. Capitol Building, hosted by the Congressional Research Service (CRS), titled “Insuring and Mitigating Risks of Large-Scale Disasters: Is Federal Disaster Insurance Needed?”
“There are many potential natural catastrophe scenarios resulting in insured property losses exceeding $100 billion,” said Ms. Clark. “Examples include a Category 5 hurricane making landfall in Miami, which could result in insured losses of more than $130 billion, and a large-magnitude earthquake in the Central U.S., which could result in insured losses of more than $150 billion.”
Ms. Clark will provide an overview of the financial threat posed to insurers, policyholders, and the economy as a whole by increasing insured property values in high-risk areas. AIR estimates the total value of properties has roughly doubled over the past 10 years and expects this trend to continue in the foreseeable future.
“There is a one percent probability of an insured property loss exceeding $100 billion this year,” said Ms. Clark. “That may appear small to some, but the probability of experiencing this loss or greater over the next 10 years is almost 20 percent when the continual growth in the number and value of exposed properties is included.”
The CRS seminar will examine how insurance companies cope with large-scale natural disasters and discuss the role of the government and private sectors in financing and managing catastrophe risk.
For more information on the insured value of coastal properties, see AIR’s recent report The Coastline at Risk at www.air-worldwide.com.
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. An ISO business, AIR was founded in 1987 to provide 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 www.air-worldwide.com.
ISO is a leading provider of products and services that help measure, manage and reduce risk. ISO provides data, analytics and decision-support solutions to professionals in many fields, including insurance, finance, real estate, health services, government and human resources. Clients use ISO’s databases and services to classify and evaluate a variety of risks and detect potential fraud. In the U.S. and around the world, ISO’s services help customers protect people, property and financial assets. For more information, visit www.verisk.com/iso.
Michael Gannon (AIR Worldwide)