New Executive Briefing on Northeast Hurricane Risk

Boston, February 25, 2008

Karen Clark & Company announced today a new Executive Briefing on Northeast Hurricane Risk. This briefing provides insurance company senior executives and boards of directors with important information in five key areas: the likelihood of future major events, the nature of the hurricane damage, why the catastrophe models differ so significantly in this region, how the model results can be benchmarked for credibility, and current competitive threats and opportunities in the Northeast.

"Insurance companies have been relying too heavily, and in some cases exclusively, on the catastrophe model output to make important financial decisions", said Karen Clark, President and CEO of Karen Clark & Company. "This is despite the fact that Hurricane Katrina and other recent events clearly highlighted the inaccuracies and uncertainties inherent in the catastrophe models. In the Northeast region, the results of different hurricane models can differ by more than a factor of two giving the clear signal that companies need to look beyond the models to understand and manage their hurricane risk", continued Ms. Clark.

This Executive Briefing provides clear and succinct information on what is known about hurricanes in the Northeast. It explains how that information gets incorporated into the catastrophe models and why the model results can differ so widely. The briefing also shows how other independent information can be used to benchmark the model results and provide more transparency with respect to a company's likely losses from future hurricane events.

"Company executives have been asking me for more insight into the hurricane risk in this region because of the dramatic model changes and market swings in recent years", said Ms. Clark. "This Executive Briefing packages the most important information into a concise format appropriate for senior executives and boards of directors."

Since hurricane Katrina, some of the catastrophe model changes have resulted in loss estimates increasing by up to 100 percent or more in Northeastern coastal areas. As a result, reinsurance costs have risen dramatically for all coastal areas, including Connecticut, Rhode Island and Southeastern Massachusetts—areas that have not been affected by a major hurricane in over 50 years. This has led some insurers to increase premiums dramatically for policyholders in these areas and many insurers to stop writing business in coastal areas.

Insurance company executives, policyholders and regulators all want answers to the root causes behind how and why this market disruption occurred. This Executive Briefing addresses the specific issues insurance company executives and boards need to know in order to adapt their strategies effectively to the current market situation.

Karen Clark is a globally recognized authority on hurricane risk, hurricane models, and using scientific information to assess and manage catastrophe loss potential. Over the past few years, she has given dozens of presentations to industry organizations, investor groups and boards of directors. Ms. Clark was recently featured in a History Channel special on Northeast Hurricanes.

The Executive Briefing on Northeast Hurricane Risk can be scheduled at convenient times and locations. To request information please e-mail