Leading Atmospheric Scientist Validates AIR Worldwide's NWP-based Model for Assessing Winter Storm Risk

AIR's Application of Numerical Weather Prediction Provides Insurers with a Realistic View of Winter Storm Risk

BOSTON, Jan. 24, 2006 — Dr. Robert Fovell of the Department of Atmospheric and Oceanic Sciences at the University of California, Los Angeles (UCLA) has peer-reviewed AIR Worldwide's (AIR) new and innovative approach to assessing winter storm risk using Numerical Weather Prediction (NWP) technology. Dr. Fovell is a globally recognized expert in NWP, a technology used by advanced meteorological agencies around the world.

"AIR's physical-stochastic approach combines NWP and stochastic techniques in a new way," said Dr. Fovell. "The NWP component accurately constrains the stochastic while the stochastic component amply extends the physical. This unique approach results in a highly realistic view of the risk from extratropical cyclones."

The groundbreaking technique — developed for AIR's extratropical cyclone models and recently implemented in the AIR Winter Storm Model for the U.S. — employs NWP to simulate the footprints of damaging winds, precipitation, and cold temperatures that are characteristic of severe winter storms. Using NWP, hundreds of historical storms are analyzed to determine how their outcomes might have been different under slightly different atmospheric conditions. The results are used to produce a probabilistic catalog of tens of thousands of potential storms, which is used by insurers to estimate potential losses.

"The perturbation of the initial conditions of actual storms is an established technique used by meteorologists to determine the range of possible forecasts," said Dr. Peter Dailey, AIR's manager of atmospheric science. "The results reflect how small variations in atmospheric parameters can lead to significant differences in track, intensity, and geographic extent. AIR is the first to apply this technique to develop a stochastic catalog of potential storms that insurers can use to estimate winter storm losses."

"I am impressed by AIR's ability to incorporate complex and sophisticated forecasting technology into a model designed to assess financial risk for the insurance industry," continued Dr. Fovell. "AIR has developed an ingenious way of using a limited set of historical events to develop a realistic catalog of tens of thousands of potential storms."

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.

Release: Immediate

Giuseppe Barone / Erica Helton
MWW Group (for ISO)
gbarone@mww.com / ehelton@mww.com

Michael Gannon (AIR)

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