Karen Clark & Company Selected by the National Association of Insurance Commissioners (NAIC) to Consult on Catastrophe Models

Firm Will Report on Alternatives for National Hurricane and Earthquake Models

SPA Risk LLC to Report on Earthquake Loss Modeling
BOSTON--(Business Wire)--
Karen Clark & Company, independent experts in catastrophe risk, catastrophe
models, and catastrophe risk management, today announced it has been selected by
the National Association of Insurance Commissioners (NAIC) as the lead
consultant in developing a recommendation on the scope, timeline, and potential
costs of building a national catastrophe multi-peril model for personal lines.

The NAIC retained Karen Clark & Company to conduct the study and produce the
report which will include three sections - hurricane loss modeling, earthquake
loss modeling and general modeling. SPA Risk LLC, a consulting firm with special
expertise and experience in natural hazards model development, risk assessment,
and risk mitigation, has also been retained by the NAIC to develop the
earthquake loss modeling section of the report.

"Given the importance of catastrophe models in assessing insurance company
exposure to financial loss, the NAIC requires a thorough expert analysis of
various alternatives with respect to these models," said Karen Clark, President
and CEO, Karen Clark & Company. "We are thrilled to have been selected by this
prestigious organization, and to lend our expertise to this ambitious effort."

Karen Clark & Company will determine the feasibility and cost estimates for
creating a hurricane model to estimate residential losses nationwide, down to at
least the ZIP code level, on an average annual loss basis, and for developing
scenario catastrophes and aggregate losses for various return periods. The firm
will determine whether a national hurricane model can be leveraged or adapted
from existing models, such as the Florida Public Hurricane Loss Model and the
HAZUS model. SPA Risk LLC will conduct a similar assessment for an earthquake
model. Karen Clark & Company will also provide general expertise to regulators
on the feasibility and costs of building a national catastrophe model, and
guidance on proper evaluation of private catastrophe models.

"The increased use of catastrophe models creates a new challenge for insurance
regulators, since the models play a significant role in a company`s
rate-setting, underwriting, claims administration and overall financial
solvency," said Charles Scawthorn, Principal, SPA Risk LLC. "We look forward to
working with Karen Clark & Company to help foster a better understanding of
these challenges and the feasibility of building a national catastrophe model."

The feasibility study is scheduled to be completed in mid-June. Karen Clark &
Company will work with the NAIC to develop realistic timetables and cost
projections based on the alternative approaches.

About Karen Clark & Company

Karen Clark & Company provides software products and consulting services that
help insurance companies evaluate and improve their exposure data processes, to
better understand catastrophe risk, and to more effectively utilize models and
model results. Karen Clark & Company professionals are independent experts in
catastrophe risk, catastrophe models, and catastrophe risk management who work
with insurance company executives to enhance business strategies, competitive
advantage, and financial results. For more information, please visit
www.karenclarkandco.com.

About SPA Risk LLC

SPA Risk LLC is a consulting firm with special expertise and experience in
natural hazards model development, risk assessment, and risk mitigation for
agencies and companies with exposure to catastrophes such as earthquakes,
hurricanes, fire, blast and other hazards. SPA is recognized by government,
regulators, insurers and the financial industry for expertise and leadership in
the field of risk assessment. Clients include the World Bank, Bank of America,
the State of California, Federal Emergency Management Agency, US Geological
Survey and various other insurance and corporate entities. SPA is an innovator -
an example is OpenRisk: object-oriented, web- and GUI-enabled, open-source, and
freely available software code for conducting multihazard risk analysis. The
resulting body of code and applications are also referred to as OpenRisk. For
more information see www.sparisk.com.

BackBay Communications
Philip Nunes, 617-556-9982, x227
phil.nunes@backbaycommunications.com

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