AIR Surpasses $3 Billion in Modeled Catastrophe Bonds to Date in 2007

BOSTON, Aug. 6, 2007 — AIR Worldwide Corporation (AIR) today announced that it has provided risk modeling and analytical services for more than 3 billion dollars in insurance-linked securities to date this year, or nearly 70% of 2007 new issuances.

“Catastrophe bond issuances have increased significantly since 1997 when AIR modeled the first large-scale catastrophe bond—Residential Re which provides reinsurance for USAA,” said David Lalonde, senior vice president at AIR Worldwide. “Since then, AIR has modeled all eleven Residential Re transactions, including the most recent one in 2007 for $600 million.”

So far in 2007 AIR has provided support for insurance-linked securities that provide protection against a wide variety of perils worldwide. In addition to hurricanes, earthquakes and severe thunderstorms in the U.S., AIR has modeled catastrophe bonds covering earthquakes in Japan, winter storms in Europe, and severe thunderstorms and earthquake in Canada. AIR also modeled the first catastrophe bonds covering California wildfires and U.S. winter storms. The bonds have a variety of trigger types, ranging from indemnity, index and notional portfolio-based to a hybrid of several trigger types, including an actively managed Collateralized Debt Obligation (CDO).

Catastrophe bonds are an increasingly attractive alternative to traditional reinsurance and retrocessional cover and their structures are becoming more innovative. An example of a novel transaction is Nephila Capital Ltd.’s Gamut Re, which is the first actively managed CDO catastrophe bond issued where the bond’s portfolio — comprised of currently traded catastrophe bonds, Industry Loss Warranties and reinsurance contracts — changes from day to day. Nephila will manage the bond and AIR will model the CDO on a quarterly basis as an independent reviewer.

“AIR’s underlying modeling methodology and risk analysis expertise were crucial in achieving the tranche ratings within this new structure,” said Barney Schauble, a partner at Nephila. “And the credibility of AIR’s model results with the investor community was extremely important. Equally important to the success of the transaction was AIR’s responsiveness. Despite the complexity of this vehicle, they delivered analysis results and materials for the offering circular within the scheduled time-frame, and will be an integral part of the ongoing reporting.”

A key element of the rating process for catastrophe bonds is the risk modeling. AIR performs the underlying analysis used to determine the level of risk inherent in the transaction. Additionally, AIR provides support for the offering circular and for the investor and rating agency meetings.

“AIR’s role does not end with the modeling of individual bonds,” continued Lalonde. “Insurers, reinsurers, hedge funds and other catastrophe bond holders utilize AIR’s CATRADER® — the industry standard platform for catastrophe reinsurance—to assess the risk to their portfolios of catastrophe bonds of all trigger types, as well as Industry Loss Warranties and other instruments.”

AIR also provides investors with the tools necessary to fully understand the risk including documentation on the models, modeling assumptions, what-if analyses of historical events, and breakdowns of risk by region and peril.

About AIR Worldwide Corporation
AIR Worldwide Corporation (AIR) is the fastest growing 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.

Release: Immediate

Contacts:
Giuseppe Barone / Erica Helton
MWW Group (for ISO)
201-507-9500
gbarone@mww.com / ehelton@mww.com

Kevin Long (AIR)
617-267-6645
klong@air-worldwide.com