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MSB ReAlign Reduces Valuation Uncertainties for Reinsurers

NEW BERLIN, WI - October 3, 2008 - In a market already stressed by large numbers of catastrophic losses and compounded by a significant loss of investment capital through the banking debacle, the long-term effects of insuring undervalued books of property business and the associated premium deficiencies are points of concern for reinsurance companies. Unless reinsurers have a full understanding of the exposure, reinsurance contracts can be devastating for reinsurers and the reinsurance market as a whole.

Property business remains the culprit when trouble occurs. Common complaints from the reinsurance market include poor exposure data quality and unverified insurance to value as well as ongoing loss of profits due to premium not commensurate with risk insured. One study performed by Marshall & Swift / Boeckh (MSB) demonstrated a minimum 30% underinsurance problem proliferates many books of homeowners property business reinsurers maintain, with the gap widening for commercial real property and contents coverage.

This many only be the tip of the iceberg, as we learned from observing the effects of Hurricane Katrina. Add to that early estimates as high as $15 billion for losses caused by Hurricane Ike and we have a very vulnerable reinsurance market. Aside from being the largest catastrophe in U.S. history, ($41.1 billion from 1.75 million claims, according to the Insurance Information Institute), Hurricane Katrina led to downgraded ratings and credit watches for many insurers and reinsurers.

Like Hurricane Katrina, Hurricane Ike raises the same concerns about property coverage adequacy on reinsurance treaty portfolios. Peter M. Wells, president of MSB, sees reinsurers increasingly turning to ReAlign (R), a unique predictive tool, to overcome the potential problem caused by over- or under-valuation of property portfolios.

MSB released ReAlign software that combines researched and scored property benchmark data with advanced statistical methodologies to accurately measure the level of under- or over-valuation present in a portfolio. As Wells explains, "When applied to a cedent portfolio submission, ReAlign's data output allows reinsurers to more closely predict the true value of the book and develop more representative pricing."

The release of ReAlign is providential, given the hurricane activity this year. The reinsurance companies that were using MSB ReAlign were able to understand their exposure and price better. But Hurricane Ike created a lot of financial uncertainties among other reinsurers. In just days following the hurricane, MSB saw a surge in requests for Texas property portfolios to be processed through ReAlign.

ReAlign enables reinsurers to understand each portfolio better and analyze under- and over- valuation by 5-digit ZIP code, age of construction, property characteristics and at aggregate levels. This information is valuable when used to renew or sell reinsurance coverage and can be used to adjust exposure data and run against CAT models to further refine exposure. ReAlign also provides an exposure factor for books of business that are not at current replacement value.

"ReAlign brings unprecedented predictability to reinsurers," adds Wells. "Those reinsurance companies that have adopted ReAlign were better prepared for the recent hurricanes than those who relied on other methods of risk assessment."

For more information about ReAlign, contact Tamara Coffman at MAILTO:Tamara.Coffman@msbinfo.com.

About MSB

MSB, also known as Marshall & Swift / Boeckh, is an MDA company and the leading supplier of local building cost information, residential and commercial property valuation technology and services for the property and casualty insurance sector in the United States and Canada. MSB has five offices throughout the U.S. and Canada. For information, please contact Marsha Berenson, Media Coordinator, at 800-285-1288, Ext. 2828, e-mail MAILTO:Marsha.Berenson@msbinfo.com, or visit MSB's Web site at HTTP://www.msbinfo.com.

About MDA

MDA provides advanced information solutions that capture and process vast amounts of data, produce essential information, and improve the decision-making and operational performance of business and government organizations worldwide.

Focused on markets and customers with strong repeat business potential, MDA delivers a broad spectrum of earth and space based information solutions, ranging from complex operational systems, to tailored information services, to electronic information products.

MDA employs more than 3,300 people in locations across the United States, the United Kingdom, and Canada. The Company's common shares trade on the Toronto Stock Exchange under the symbol TSX:MDA. HTTP://www.msbinfo.com.


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