AER, Inc. and EQE, Inc. Partner to Provide Forecast-Based Climate Risk Management Services.

OAKLAND, Calif.--(BUSINESS WIRE)--Oct. 1, 1999--

Atmospheric and Environmental Research, Inc. (AER) and EQE International, Inc. (EQE) announced today an exclusive strategic alliance between the two companies to provide commercial customers with the design, development, and placement of climate risk transfer vehicles based on proprietary forecasting capabilities of AER.

By combining the risk management, marketing and financial expertise of EQE with the advanced scientific capabilities of AER, customers will be able to effectively utilize specialized insurance and capital market instruments such as weather hedges to mitigate their exposure to climate risk. The companies will deliver their services to the marketplace through the marketing organization of EQE's subsidiary EQECAT, Inc. and will use the trade name "Natural Risk Partners" for the service.

AER, an award-winning leader in environmental research and consulting with extensive expertise in numerical weather prediction and climatology recently announced a unique partnership with Columbia University's Lamont Doherty Earth Observatory (LDEO) to commercialize the results of climate research taking place at LDEO. The results and experience of the AER/LDEO partnership will add to the extensive expertise that AER brings to the Natural Risk Partners project with EQE.

In making the announcement, Cecilia Sze, president and CEO of AER, said, "We are extremely pleased to be working with EQE in the delivery of advanced forecasting and climate analysis services to customers exposed to climate risk. The relationship with EQE brings the extensive market relationships and financial and risk management expertise that make it possible to reach and serve a large number of world-class global companies that must deal with climate risk."

Dr. James J. Johnson, president and CEO of EQECAT, Inc. and Chief Operating Officer of EQE, Inc., added, "The development of an exclusive relationship with a prestigious firm like AER is truly an exciting development for us here at EQE. The competition within many of our customers' industries today is intense and careful design and delivery of custom forecast-based risk transfer vehicles for climate risk will make a real difference for them in protecting not just the balance sheet but also the income statement. An effective insurance product or weather hedge for climate risk for a commercial customer makes it possible to consider a whole new range of strategic opportunities."

Founded in 1977, AER performs climate research and consulting in areas of weather prediction, climatology, satellite meteorology, remote sensing, circulation diagnostics, atmospheric chemistry, planetary sciences, and systems engineering. AER's Climate Risk Unit, formed in 1999 to respond to the needs of risk managers in insurance, energy, and other climate-exposed industries, will be supporting the activities of Natural Risk Partners. In addition to its Cambridge, Mass., headquarters, AER has offices in Washington, D.C., San Francisco, Los Angeles, Hong Kong, and Beijing.

EQE International, founded in 1981, is the leading risk management and information company for catastrophic risks. EQE helps major international clients to identify all hazards that could threaten their business objectives, prioritize and quantify the associated risks and implement cost effective mitigation strategies.

It provides state-of-the-art software, risk information and consulting services to the energy, power, transportation, chemical, entertainment and manufacturing industries among others. Its subsidiary EQECAT is the leading catastrophe software modeler and consultant to the property/casualty and financial services industries. EQE's headquarters is in Oakland, Calif., and has 12 other offices in the United States as well as 11 international offices including London, Seoul, Tokyo, and Paris.