Moody’s has entered into an agreement to acquire catastrophe risk modelling firm RMS for approximately $2.0 billion from Daily Mail and General Trust.
The acquisition will increase Moody’s insurance data and analytics business to nearly $500 million in revenue and will accelerate the development of the company’s global integrated risk capabilities to address the next generation of risk assessment.
The acquisition will build upon the two companies’ customer bases and capabilities in the life and P&C insurance and reinsurance segments.
Through further innovation and a combination of both companies’ core strengths and offerings, RMS will enhance Moody’s integrated risk assessment strategy for customers in the insurance industry and beyond, with significant capabilities across climate, cyber, commercial real estate and supply chain risk.
As part of the Moody’s Analytics platform, RMS is expected to generate up to $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. The acquisition is expected to close at the end of this third quarter, subject to closing conditions.
Rob Fauber, President and Chief Executive Officer of Moody’s commented: “Today’s leaders face a complex, interlinked world of risks and stakeholders. 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.”
Karen White, Chief Executive Officer of RMS added: “Moody’s is an exceptional fit for RMS and our customers. 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.”