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Losses from Hurricane Gustav could vary from $6 billion to $10 billion and this mostly in Louisiana. This is information released by EQECAT, Inc., of Oakland, Calif., which is the leading authority on extreme-risk modeling. Their estimate is based on current storm information being made available by the National Oceanic and Atmospheric Administration (NOAA).

In addition, asset damage and disruption of production of offshore crude oil and natural gas in the U.S. Gulf of Mexico will be impacted. EQECAT said it expects a shut down for the next year of about 5 percent of the production capacity for oil, and 5 percent of production capacity for natural gas.

As additional information about the storm's characteristics becomes available EQECAT will update its estimates.

In access to the damage caused to commercial and residential structures, examples being office buildings, factories , homes, and warehouses, the estimates being put forth by EQECAT of insured losses include business interruption, due to the destruction of property. It also includes something called demand surge, which is what occurs when the demand for products and services for repairing damages is significantly greater than the available supply. This means that such products and services have to be brought to the region from distant points and quickly. This can result in additional costs covering such needs as transportation, packaging and manufacture.

Losses related to flooding, and losses of private and commercial automobiles and similar vehicles, are excluded from EQECAT's insured loss estimates.

EQECAT's Offshore Energy Model Used to Generate Energy Disruption Estimates

EQECAT used its Gulf of Mexico Offshore Energy Model (OEM) to generate its estimates of the impact on offshore energy. Through use of this model, oil and gas producers, insurers and reinsurers are able to manage hurricane risk for offshore assets. At the present time, the model includes exposures in the U.S. Gulf of Mexico. The EQECAT OEM, which was launched in May 2007, and is a product of rigorous science, engineering research, as well as robust mathematical methodologies.

EQECAT along with its parent company, ABSG Consulting Inc. (ABS Consulting) provide services to the global property and casualty insurance industry, as well as leading multinational corporations and financial institutions. EQECAT is a recognized leader and known to be a technical leader and innovator in the growth and improvement of analytical tools and consulting services designed to measure the exposure to natural catastrophic risks and those that are man-made.

EQECAT employs WORLDCATenterprise(TM), its extreme-risk modeling software platform, to make it possible for clients to assess and manage potential damages and losses that can arise from wind, earthquakes, wildfire, flood, as well as terrorism, and other perils. Included in WORLDCATenterprise(TM) are 177 natural hazard software models covering 89 countries and over spanning six continents.