AIR Worldwide Updates Winter Storm Klaus Losses based on Damage Survey Findings.

Insured Property Losses in France Estimated at between 500 Million and 1 Billion Euros

BOSTON -- Catastrophe risk modeling firm AIR Worldwide today announced that it has updated its insured loss estimates for winter storm Klaus based on additional wind speed data analyzed from more than 700 weather stations across France, combined with the detailed data collected by AIR's post-disaster survey teams, which were dispatched to affected areas of southern France immediately after the storm. The new findings have resulted in an updated estimate of insured property losses in France of between 500 million and 1 billion Euros. These losses represent damage to buildings and contents of onshore residential, commercial and agricultural properties. (Note that the agricultural line of business in the AIR model does not include losses to commercial forestry, but rather damage to agricultural buildings and their contents.)

"Klaus was the most intense storm to affect France since Martin in December of 1999, which caused an estimated 2.5 billion Euros in insured losses in France at the time," said Dr. Peter Dailey, director of atmospheric science at AIR Worldwide. "Klaus' wind speeds broke several records across southern France. However, while the maximum wind speeds form Klaus were in some cases higher than for Martin, Klaus' footprint of damaging winds was more narrow."

Residential properties, dominated by unreinforced masonry construction with low-pitched roofs, suffered a fairly high incidence of minor roof tile damage (as much as 10% of properties in some areas visited). Clay roof tiles, common in southern France, are often not mechanically attached to the roof and thus can be blown off by high wind. Tiles at the corners and ridges experience the highest wind load, and indeed this was the most common type of damage observed. The teams also observed damage to the undersides of roofs with large overhangs, where wind can be trapped to create localized loads of upward pressure.

For commercial properties, the most common type of damage observed was to light metal construction in which sheet metal roofs and siding had been peeled away during the storm. Long span structures are particularly vulnerable, even at low to moderate wind speeds.

"Severe structural damage caused directly by wind was rare, which is consistent with expectations given the reported wind speeds and dominant construction types," continued Dr. Dailey. "However, there were many cases in which trees had fallen onto properties, causing more significant structural damage. At a campsite in Saguinet in the department of Landes, an estimated 150 caravans (mobile homes) were destroyed by downed trees. Forestry officials estimate that over 60% of trees in Landes, which was the source of about a third of France's lumber production, were destroyed."

The survey team saw widespread damage to power and telephone lines caused by downed trees. Nevertheless, losses to utility companies may be significant. At the height of the storm, more than 1.7 million households in France were without power and the AIR survey teams saw utility repair crews on virtually every road they traveled. While the AIR survey teams did not observe significant damage to large numbers of commercial properties, Business Interruption (BI) losses remain an unknown--and relate, at least in part, to the power outages.

Dr. Dailey added, "In general, direct wind damage caused by Klaus to properties in southern France was relatively minor, though the incidence of damage was relatively high. Significant structural damage was limited almost entirely to cases where large trees had fallen onto buildings."

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, detailed site-specific wind and seismic engineering analyses, agricultural risk management, 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.