AIR Worldwide Analysis Finds European Insurers Could Face Winter Storm Losses Exceeding EUR 40 Billion

A new analysis of European extratropical cyclones by AIR Worldwide
Corporation (AIR) confirms that Europe could experience a winter storm
resulting in insured losses in excess of EUR 40 billion.

"For an extratropical cyclone to produce a loss greater than we
have experienced to date, it takes the right combination of just three
storm characteristics: size, intensity, and path," said Dr. Peter
Dailey, meteorologist and director of atmospheric science at AIR. "The
largest historical losses have resulted from storms with extremes
incorporating one or two of these ingredients. At some point, we will
experience a storm where all three will coincide."

Windstorm Daria, which caused damage across six countries in 1990,
was one of the largest European windstorms in recent history. Using
its extratropical cyclone model for Europe, AIR estimates that if
Daria were to recur today, it would cost insurers more than EUR 10
billion.

"Daria was large, but it is not the most intense storm in the
historical record," said Dr. Dailey. "A storm that impacted Greenland
and Iceland in December 1986 was both large and much more intense. The
1986 storm had the lowest central pressure ever recorded for an
extratropical cyclone in the Northern Hemisphere but remains largely
unknown because it failed to reach the population centers of
continental Europe."

The AIR study determined that had the jet stream been in a
somewhat different position at the time, the storm could have taken a
path over Europe's highest density of insured properties.

"An extratropical cyclone that is as large as Daria, intense as
the December 1986 storm and follows a path over Europe's highest
density of insured properties is entirely possible from a
meteorological standpoint," said Dr. Dailey. "Our analysis shows
losses from such a storm could exceed EUR 40 billion."

"Many insurers were surprised by the $41 billion insured loss
resulting from Hurricane Katrina, despite the fact that the AIR U.S.
hurricane model already contained hundreds of scenarios with higher
losses," said Yorn Tatge, managing director of AIR Worldwide GmbH.
"Similarly, European insurers need to ensure they are prepared for
winter storm losses far beyond those experienced to date. Winter
storms are by far the greatest threat for Europe in terms of insured
losses. It's not a question of if, but rather of when."

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.