BOSTON, June 16, 2008 — A report recently completed by catastrophe risk modeling firm AIR Worldwide Corporation estimates that over the past three years the insured value of properties in coastal areas of the United States continued to grow at a compound annual growth rate of just over 7%. Despite the recent weakening of the real estate market in many areas, the insured value-or the cost to rebuild properties-has maintained an annual growth rate that will lead to a doubling of the total value every decade.
“While the scientific debate over the effects of global warming on the frequency and severity of hurricanes remains inconclusive, there is no question that the significant increase in the number and value of exposed properties over the last decade has and will continue to contribute to increasing hurricane losses for insurers,” said S. Ming Lee, president and CEO of AIR Worldwide.
As a result of the devastating impact of Hurricane Katrina, the total insured value of properties in the coastal counties of Louisiana has grown at the lowest compound average annual rate of all coastal states, or just over two percent. Mississippi coastal counties, also impacted by Hurricane Katrina, averaged a five percent annual increase, the second lowest of all coastal states. The insured value of residential and commercial properties in coastal counties of Florida and New York passed two trillion dollars each.
Overall, 38% of the total exposure in Gulf and East Coast states is located in coastal counties, which accounts for nearly 17% of the total value of properties in the U.S.
The complete report is available at:
About AIR Worldwide Corporation
AIR Worldwide Corporation (AIR) is the scientific leader and most respected provider of risk modeling software and consulting services. AIR founded the catastrophe modeling industry in 1987 and today models the risk from natural catastrophes and terrorism in more than 50 countries. More than 400 insurance, reinsurance, financial, corporate and government clients rely on AIR software and services for catastrophe risk management, insurance-linked securities, site-specific wind and seismic engineering analyses, and property replacement cost valuation. AIR is a member of the ISO family of companies and is headquartered in Boston with additional offices in North America, Europe and Asia. For more information, please visit www.air-worldwide.com.
Kevin Long (AIR)