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AIR Modeling Technology Helps Securitize Cat Risk.

Applied Insurance Research inc. has applied two of its modeling technologies to the securitization of catastrophe risk.

The Boston-based catastrophe-modeling firm provided the risk analysis in support of the recently completed Trinom Ltd. transaction, which raised $161.8 million of coverage for Zurich Insurance Co.'s underlying insurance risk from U.S. hurricanes, U.S. earthquakes and European windstorms.

An innovation in the transaction is AIR'S Advanced Component Method, which models buildings as configurations of structural and nonstructural components, each of which responds uniquely to the natural resonance between the building and incoming seismic waves.

Under the arrangement, which was brokered by Aon Capital Markets and Morgan Stanley, recovery is triggered by AIR's estimation of losses to a notional portfolio resulting from qualifying hurricanes, windstorms and earthquakes.
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Title Annotation:Applied Insurance Research, catastrophe risk
Comment:AIR Modeling Technology Helps Securitize Cat Risk.(Applied Insurance Research, catastrophe risk)
Publication:Best's Review
Article Type:Brief Article
Geographic Code:1USA
Date:Oct 1, 2001
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