RMS Study Reveals Potential for US$100 Billion In Losses From Large Earthquake in Beijing, China

RMS Study Reveals Potential for US$100 Billion In Losses From Large Earthquake in Beijing, China

March 19, 2007

Company Analyzes Impacts of Modern-Day Repeat of 1679
Sanhe-Pinggu Earthquake


    NEWARK, Calif., March 19 /Xinhua-PRNewswire/ -- Risk
Management Solutions (RMS), the world's leading provider of
products and services for catastrophe risk management,
announced the preliminary results of a study analyzing the
impacts of the 1679 Sanhe-Pinggu Earthquake based on the
2007 population and property exposures of the Beijing,
China area. The largest historical earthquake in the
vicinity of Beijing, this magnitude 8.0 event centered 50
km (31 mi) east of Beijing brought destruction to the
region in the early years of the Qing Dynasty. The study is
intended to not only broaden the awareness of risk but to
investigate the implications of a repeat of this event on
the rapidly expanding insurance and mortgage markets in
China. The risk analysis performed was based on the new
RMS(R) China Earthquake Model, scheduled for release in
spring 2007. 

    While building standards have improved significantly
since 1976, when the collapse of unreinforced masonry
buildings in the Tangshan Earthquake killed over 240,000
people, the new RMS study has shown the far-reaching impact
of a major event striking a highly commercialized and
populated area of China. The RMS analysis indicates a
potential economic loss of 800 billion RMB (US$100 billion)
throughout the region, over half of which would occur in
Beijing alone. A share of this loss would be borne by the
insurance industry, as well as mortgage lenders who will be
impacted by damage to uninsured properties. Detailed impacts
and loss results from the RMS scenario study will be
released in a special report on Wednesday, March 21.

    The 2007 Sanhe-Pinggu Earthquake study is the latest in
a series of reports RMS has published about earthquake risk
in China. In 2004, RMS published a report on the issues and
need for the formation of a technically sound and
commercially viable market for earthquake insurance in
China. And in July of 2006, in collaboration with the CEA's
Institute for Engineering Mechanics (IEM), RMS published a
30-year retrospective report on the 1976 Tangshan
Earthquake.

    "As cities across Asia have rapidly increased in
population and commercial development, a much greater
proportion of the overall population now lives in cities
like Beijing. It is only a matter of time before an
earthquake strikes one of these cities, potentially leading
to devastating effects," commented Dr. Weimin Dong,
chief risk officer of RMS. "We are committed to
actively engaging in the development of a world-class risk
market in the most dynamic economy in the world.  The
availability of a model for earthquake loss will give the
needed technical foundation to mitigate the losses and
prepare financially for a large event."

    The RMS(R) China Earthquake Model underlying the
Sanhe-Pinggu Earthquake study will be introduced to the
China insurance and investment market at seminars in
Beijing on March 21 and Shanghai March 23. Visit
http://www.rms.com/2007ChinaSeminars/ for more information.

    
    About RMS 

    Risk Management Solutions is the world's leading
provider of products and services for catastrophe risk
management. More than 400 leading insurers, reinsurers,
trading companies, and other financial institutions rely on
RMS models to quantify, manage, and transfer risk. Founded
at Stanford University in 1988, RMS serves clients today
from offices in the U.S., Europe, and Japan. For more
information, visit our web site at http://www.rms.com .
 
    RMS, RiskLink, RiskBrowser, and RiskSearch are
registered trademarks, and the RMS logo is a trademark of
Risk Management Solutions, Inc. All other trademarks are
property of their respective owners.


    For more information, please contact:

     Mark Prindle
     TorranceCo, New York
     Tel:   [phone]
     Email: [e-mail]

     Shannon McKay
     Risk Management Solutions, California
     Tel:   [phone]
     Email: [e-mail]