Moody’s to pay $2bn for climate risk modeller RMS

Financial services giant bolsters climate risk capabilities

US financial services giant Moody’s has today announced the acquisition of California-based climate and disaster risk modelling specialist RMS, in a deal worth around $2bn. 

RMS, which runs over 400 risk models covering 120 countries, provides climate and natural disaster risk modelling and analytics for the global property and casualty insurance and reinsurance sectors.

The acquisition, which is expected to be completed late in the third quarter of 2021, is being funded through a combination of cash-on-hand and new debt, said Moody’s. 

RMS is being bought from the Daily Mail and General Trust plc, the UK-based media company which owns the Daily Mail newspaper. 

Through the acquisition, Moody’s hopes to build out its risk assessment capabilities for clients across climate, cyber, commercial real estate and supply chain risks, it said. 

RMS is expected to generate revenue of approximately $320m for the fiscal year ending September 2021, with an adjusted operating income of approximately $55m, Moody’s said. The deal, once complete, will expand Moody’s insurance and data analytics business to nearly $500m in revenue.

“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," said Rob Fauber, President and CEO of Moody’s.

Moody’s acquisition of RMS is the latest in a string of ESG purchases: In 2019, it bought a minority stake in Chinese ESG data provider SynTao Green Finance, and majority stakes in Vigeo Eiris and Four Twenty Seven.