NEW YORK— (BUSINESS WIRE) — April 3, 2006 — Guy Carpenter & Company, Inc., the leading global risk and reinsurance specialist and a part of the Marsh & McLennan Companies (NYSE: MMC), and AIR Worldwide Corporation (AIR), today announced a joint initiative to develop a detailed catastrophe model focusing on earthquake exposures in Switzerland. The fully probabilistic model will provide insurers and reinsurers with a powerful resource for quantifying loss potential at a detailed level.
"Though earthquake activity in this region tends to be less frequent and less severe than in some other European nations, Switzerland is a critical market from an economic perspective, and the loss potential from a significant seismic event is very high," said Jan Stormann, Managing Director and head of Guy Carpenter's Munich office. "This will be one of the most advanced, sophisticated catastrophe modeling platforms available today, benefiting from the combined resources of our deep catastrophe market knowledge and AIR's powerful models."
"This is an excellent opportunity to fill a critical need for insurers and reinsurers in the Swiss market, coinciding with the opening of our new Munich office," said Mr. Yorn Tatge, managing director of AIR Worldwide GmbH. "AIR's model leverages Switzerland's seismic history dating back to 240 A.D., including the 1356 Basel earthquake, which is among the largest earthquakes ever to strike Central Europe. AIR estimates that if the Basel earthquake were to recur today, total property losses will likely exceed 20 billion Swiss Francs."
Additional features of the model include:
• A full probabilistic model with event set output and return period losses
• A hazard module implementing 26 seismic zones
• Incorporation of local attenuation relationships and soil conditions
• A vulnerability module comprising different damage functions for major Swiss lines of business and construction classes
• Geocoding for both detailed (longitude/latitude) and aggregated (cresta zones) data detail levels
Hanspeter Hilfiker, Senior Vice President and head of the Guy Carpenter office in Zurich, said, "As a natural hazard, earthquake is not currently covered by obligatory insurance protection. The need to review the provision of earthquake insurance cover in Switzerland is currently a subject of discussion among Swiss insurers, driving demand for a detailed and high quality model for this economically important market."
About Guy Carpenter
Guy Carpenter & Company, Inc. is the world's leading risk and reinsurance specialist and a part of the Marsh & McLennan Companies, Inc. Guy Carpenter creates and executes reinsurance and risk management solutions for clients worldwide through 2,600 professionals across the globe. The firm's full breadth of services includes 16 centers of excellence in Accident & Health, Agriculture, Alternative Risk Transfer, Environmental, General Casualty, Investment Banking*, Life & Annuity, Marine & Energy, Professional Liability, Program Manager Solutions, Property, Retrocessional, Structured Risk, Surety, Terror Risk, and Workers Compensation. In addition, Guy Carpenter's Instrat® unit utilizes industry-leading quantitative skills and modeling tools that optimize the reinsurance decision-making process and help make the firm's clients more successful. Guy Carpenter's website address is www.guycarp.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. A member of the ISO family of companies, 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.
Michael Gannon (AIR Worldwide)