News Release

NYMEX and Gallagher Re to Launch Property Damage Risk Futures and Options Contracts

Thu Dec 14 2006

New York, NY and London, UK, December 14, 2006 — The New York Mercantile Exchange, Inc. (NYMEX) and Gallagher Re, the specialist reinsurance intermediary and advisory firm, today announced that they have reached an agreement whereby NYMEX will list for trading and clear Property Damage Risk contracts, subject to regulatory approval by the Commodity Futures Trading Commission (CFTC). These contracts will allow the 'real time' electronic trading of property damage risk exposures, including hurricane risk through a cleared futures exchange. The contracts will be financially settled against the 'Re –Ex Index', which will be created by Gallagher Re.

The contracts will be traded and cleared electronically through the NYMEX ClearPort® and CME Globex® platforms, virtually around –the –clock.

Property Claims Services® (PCS®), internationally recognised as the market authority on property losses from catastrophes in the US, has agreed to supply the data which will be used to create the 'Re–Ex Index' upon which the contracts are based. Additionally, the 'Re –Ex Index' will be provided to NYMEX on a daily basis to state those losses greater than US$25m as estimated by PCS®.

The record losses caused by Hurricanes Katrina, Rita and Wilma in 2005, in particular, have been the catalyst in creating a well documented shortage of insurance and reinsurance capacity for 'Natural Perils' exposures, particularly hurricane risk. The requirement for protection against such catastrophe risk is at a record high due to the combination of changing weather patterns, recent loss activity and the consequent change in industry peril modelling, rating agency criteria and solvency requirements.

The Property Damage Risk contracts will provide access to trading of these risks in the capital markets in the form of a brand new cleared derivative instrument which is not currently available. For the first time insurance and reinsurance risk will be actively traded on a 'real time' basis through an exchange offering clearing house facilities. It is intended that the contracts will create a liquid market environment for the trading of property damage risk and facilitate the introduction of new capacity into the market.

Larry Tucker, Managing Partner of Gallagher Re's UK based operations and leader of the project team said, "Despite the relatively benign hurricane season this year, demand for property damage cover continues to vastly outstrip supply and the way in which reinsurance contracts are currently negotiated, which has remained virtually unchanged for decades, serves only to frustrate that process. Against this backdrop, the market has seen an increasing presence of the capital markets, particularly hedge funds, within the reinsurance space challenging existing methods by providing cover directly such as collateralised reinsurance contracts and cat bonds.

"These Property Damage Risk contracts have been designed to bring the transparency, immediacy and liquidity of the capital markets to the insurance sector; providing effective ways of protecting against property catastrophe risk and providing the supplier with a more efficient mechanism in the form of ISDA–based contracts. At the same time, the contracts will provide participants with the opportunity to trade a new asset class which has little or no correlation to other exchange traded position or asset classes."

James E. Newsome, NYMEX President and Chief Executive Officer, said "NYMEX has a proven track record of bringing new risk management products to the marketplace. We see the Property Damage Risk futures as a complement to the energy complex which will provide an additional avenue for our customers to hedge their risk from an ever –changing climate. NYMEX is equally excited about the potential to create a viable and innovative trading medium for these products"

Commenting on its agreement with Gallagher Re, Gary Kerney, Assistant Vice President of PCS®, said, "We are delighted to support this development by providing PCS data, which is recognised as one of the most respected reflections of insured US property catastrophe insurance losses. We believe that the Property Damage Risk contracts' goal of capturing the convergence between the reinsurance and capital markets can help satisfy the requirements for greater transparency and efficiency in the reinsurance marketplace."

A patent application is pending for the business method used in trading and the contracts themselves.

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Forward Looking and Cautionary Statements
This press release may contain forward–looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to our future performance, operating results, strategy, and other future events. Such statements generally include words such as could, can, anticipate, believe, expect, seek, pursue, and similar words and terms, in connection with any discussion of future results. Forward–looking statements involve a number of assumptions, risks, and uncertainties, any of which may cause actual results to differ materially from the anticipated, estimated, or projected results referenced in forward–looking statements. In particular, the forward–looking statements of NYMEX Holdings, Inc., and its subsidiaries are subject to the following risks and uncertainties: the success and timing of new futures contracts and products; changes in political, economic, or industry conditions; the unfavorable resolution of material legal proceedings; the impact and timing of technological changes and the adequacy of intellectual property protection; the impact of legislative and regulatory actions, including without limitation, actions by the Commodity Futures Trading Commission; and terrorist activities and international hostilities, which may affect the general economy as well as oil and other commodity markets. We assume no obligation to update or supplement our forward–looking statements.

Contact: Anu Ahluwalia, NYMEX, 212-299-2439 or  Alison Burgess, Gallagher, +44 20 7204 8563

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