NEW RMS EARTHQUAKE MODELS FOR MARKETS IN GREECE AND TAIWAN

Responding to dramatic changes in local insurance markets in Greece and Taiwan following devastating earthquakes in 1999, Risk Management Solutions (RMS) announced the release of earthquake models designed to generate new insights into seismic risk in these two areas.

RMS is the world's leading provider of products and services for the management of natural hazard risk. The Greece and Taiwan earthquake models are available for licensing with the RMS RiskLink-DLM and ALM catastrophe modeling platforms.

"The release of the new Greece and Taiwan earthquake models highlights our strategy for building new models to analyze catastrophe risk -- employing the key experts in each territory as consultants and working with local insurers so that the model can become a standard tool for insurance underwriting as much as for reinsurance placement," said Robert Muir-Wood, Ph.D., Managing Director of global risk modeling at RMS.

"The losses in Greece and Taiwan have created heightened local demand for earthquake coverage as well as hardened prices for reinsurers," said Dr. Muir-Wood. "The RMS models incorporate the latest high-resolution hazard, geotechnical, building exposure and vulnerability data. Both insurers and reinsurers benefit from having a reliable foundation on which to manage and price their risk."

Greece and Taiwan Models

The models represent the most advanced capabilities for modeling and assessing earthquake risk in their respective regions.

Leveraging the expertise of RMS seismologists, engineers and local specialists, the models permit analysis of potential earthquake losses to residential, commercial and industrial lines of business. They use a sophisticated probabilistic modeling framework incorporating regional seismicity, hazard and vulnerability characteristics. Each contains detailed RMS research on the country's predominant building materials, construction practices, building code provisions, and building performance in countries with similar risk characteristics.

Greece's inclusion in the European Union has sparked market growth, with total sums insured for property rapidly approaching 50 billion Euro. The September 7, 1999 Athens earthquake, which caused economic loss of about 4% of GDP (US$4 billion), the costliest in Greece's history, caused increased demand for earthquake coverage and has resulted in significant increases in earthquake reinsurance rates in Greece. The rapid economic growth coupled with the heightened awareness for earthquake risk is resulting in increased risk to insured portfolios. RMS estimates economic losses equivalent to those of the 1999 Athens earthquake to occur approximately once every 33 years.

Similarly, Taiwan's rapid economic growth and development has significantly increased exposure to major earthquake losses as evidenced in the M7.3, 1999 Chi-Chi earthquake that caused economic losses of about US$14 billion (about 5% of Taiwan's GDP). Due to its role as a major worldwide supplier of high-technology products, damage caused to industrial facilities affected corporate revenue and chip prices internationally. RMS estimates a return period of about 60 years for losses similar to those seen in the 1999 Chi-Chi earthquake.

The RMS models offer analytical capabilities to effectively manage these risks within a global portfolio while exploiting market opportunities in these territories.

RMS Greek Insurance Industry Study

The company also announced that it has embarked on a premier industry study designed to aid Greek insurers in the assessment of earthquake risk in order to optimize insurance and reinsurance structures. "The industry study further endorses the significant need of local insurers to assess and understand the new implications of seismic risk as illustrated in RMS' models," said Dr. Muir-Wood.

According to Mr. Nicos Nanopoulos, Technical Director of Interamerican Insurance Co: "High seismic activity in Greece, the increasing demand for earthquake cover, the initiative of the Greek government on compulsory insurance of buildings against all natural hazards, but also the continuing increase in earthquake reinsurance rates are the major factors making the Greece Industry Study a necessity.

"As one of the best known firms in the field of catastrophe modeling, RMS' vast experience with major global insurance and reinsurance companies and government organizations on earthquake models will ensure the effectiveness and credibility of this Study," he said.

The study is being conducted at the request of Greece's six major insurance companies -- Agrotiki, Alpha, Aspis Pronoia, Ethniki, Interamerican and Phoenix -- who underwrite about two-thirds of the earthquake risk in Greece.

Specifically, the study will evaluate current earthquake exposure and calculate several loss elements critical for managing the risk. It will allow the Greek companies to develop a keen understanding of earthquake exposure, outline key catastrophe loss benchmarks in comprehending the potential losses from future earthquakes and foster a better knowledge of the loss drivers that aggravate these losses. These insurance companies will be better positioned in this competitive market with the use of robust analytical capabilities and approaches for underwriting and managing related risk.

About Risk Management Solutions (RMS)

Risk Management Solutions is the world's leading provider of products and services for the quantification and management of natural hazard risks. RMS clients include leading insurers, reinsurers, trading companies, and other financial institutions. RMS offerings include risk assessment models, software products to access the models, and consulting services. Founded at Stanford University in 1988, RMS employs over 600 people worldwide. RMS is owned by DMG Information, a division of the Daily Mail and General Trust plc media enterprise.

Contact TorranceCo, New York, Gerard Carney, 212-521-5233.