(Michael Steel, General Manager, and Cihan Biyikoglu, VP, Product, RMS. Photo by author.)
At the time of ITC 2022, it had been about a year since bond credit rating company Moody’s (New York) acquired catastrophe modeling company RMS (Newark, Calif.).Michael Steel, General Manager, RMS, explained that there were two main drivers to the acquisition. One was to make the company’s climate change modeling offering available to a wider range of financial service institutions.
“What RMS did to catastrophe modeling was to create a currency of risk so that it could be traded between insurers, reinsurers and capital markets—we created a common language for that communication and those transactions,” Steel said. “As part of Moody’s, we can do the same for climate change: many financial institutions are seeking how to communicate about climate to their stakeholders, to understand the climate change signature in the portfolios of risk they’re investing in. We’ve delivered that for the insurance industry, and now we can deliver it across financial services more broadly.”
The other driver, according to Steel, was that Moody’s had a very small footprint in the insurance sector—they were offering data and analytics solutions to banks and other corporations, but not necessarily in the property/casualty space. “By being part of Moody’s we can deliver a much richer set of offerings around firmographics, ESG, and things such as credit risk,” Steel explained. “We can bring that data to the P&C industry, but using the same technology we’re delivering CAT risk with, around our Intelligent Risk Platform.”
“The greatest challenge is that getting holistic risk insights is very difficult,” noted Cihan Biyikoglu, VP, Product, RMS. “The Intelligent Risk platform we’ve built over the last couple of years—launched about 18 months ago—helps customers get unified analytics on all their major assets and complex decisions. That feels like the most critical piece for me: to help clients get to those insights and be smarter than their competitors.”