Company founder Karen Clark will continue to head AIR as president and chief executive officer, and the firm will maintain its offices in Boston, San Francisco, London and Hyderabad, India.

ISO said that the deal signals ISO's and AIR's "stepped up commitment" to help the property-casualty industry and other industries to manage extreme-event losses, which are occurring with increased frequency and intensity.

Frank J. Coyne, president and chief executive officer of ISO, cited AIR's "outstanding leadership and proven management team" as major reasons for ISO's decision to buy the 15-year-old firm. "AIR stands out because its topflight people make it extremely successful in a business of growing complexity and importance," he said.

Ms. Clark noted that linking to ISO's massive databases would enable AIR to leverage its technology to more lines of business.

"Property-casualty insurers, reinsurers, risk managers and financial services entities have come to rely on catastrophe modeling technology to manage extreme event risk due to natural hazards. September 11 made it painfully clear that lines of business other than commercial and personal property need to be managed with the same sophisticated, scientific technology companies now use for property business," Ms. Clark said.

AIR's existing models for catastrophe and weather risk simulate losses from natural catastrophes such as hurricanes, hail, tornadoes, windstorms, floods and earthquakes in more than 40 countries.