Moody’s Adds Climate Modelling to Risk Analysis Capabilities

    Stockholm (NordSIP) – Moody’s announced the acquisition of RMS, a provider of climate and natural disaster risk modelling and analytics. RMS is to be purchased for approximately US$2 billion from Daily Mail and General Trust plc. The purchase represents an investment in the development of Moody’s global integrated risk capabilities to address the next generation of risk assessment.

    The acquisition will immediately increase Moody’s revenue from insurance data and analytics business to nearly US$500 million. “Today’s leaders face a complex, interlinked world of risks and stakeholders,” said Rob Fauber, President and Chief Executive Officer of Moody’s. “In the context of a global pandemic, the climate crisis and increasing cyberattacks, our customers must manage a wider range of risks than ever before. We are excited to add RMS and its team of world-class data scientists, modelers and software engineers to the Moody’s family to help accelerate solutions that enable customers to build resilience and make better decisions.”

    According to Moody’s, RMS is the world’s leading provider of climate and natural disaster risk modelling serving the global property and casualty (P&C) insurance and reinsurance industries. RMS owns over 400 risk models covering 120 countries and is expected to generate revenue of approximately US$320 million and adjusted operating income of approximately US$55 million for the fiscal year ending September 30, 2021.

    “Moody’s is an exceptional fit for RMS and our customers,” said Karen White, Chief Executive Officer of RMS. “Global risks are now more complex, connected and systemic. Climate change and catastrophic events like extreme weather, pandemics and cyberattacks have broader and more harmful impacts across virtually all industries. We share the vision to bring a global, integrated risk assessment platform to our markets with the goals of deeper, more sophisticated risk insights and greater global resiliency. Within Moody’s, I’m confident RMS will be able to accelerate technology and model innovations while combining with Moody’s core data and analytics offerings for powerful, holistic solutions. The team and I are excited to bring new value to customers as we transform how we are able to understand and mitigate the future of risk.”

    As part of Moody’s Analytics platform, RMS is expected to generate up to US$150 million of incremental run-rate revenue by 2025.  Moody’s will fund the transaction through a combination of cash-on-hand and the issuance of new debt. Moody’s was advised on the transaction by Centerview Partners LLC and Paul Hastings LLP. The acquisition is expected to close in late 3Q 2021, subject to the satisfaction of customary closing conditions.

    Image by David Mark from Pixabay

    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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