FM Global Places $300 Million Pacific Northwest Earthquake Cat Bond

August 29, 2006

Commercial and industrial property insurer FM Global announced the private placement of a second US$300 million catastrophe bond to protect against the consequences of unusual earthquake activity in the Pacific Northwest region of the United States and Canada. The Company placed its first US$300 million catastrophe bond in June 2005.

“The catastrophe bond is a cost-effective, conservative and highly secure financial alternative to protect FM Global’s balance sheet and provide our policyholders with added financial protection,” indicated CFO Jeff Burchill.

The bulletin explained that “FM Global’s scientists have validated consensus from the scientific community that, approximately once every 500 years, an earthquake along the Cascadia Subduction Zone — which extends from southern British Columbia, Canada to northern California, USA — could release significantly more energy than previously understood.”

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