RMS (company)

RMS (company)
Name	RMS
Type	Private
Industry	Risk modeling
Founded	1987
Founder	Laurence Murphy; Christopher Rutherford; Simon Roope
Headquarters	London, United Kingdom
Area served	Global
Products	Catastrophe models; risk analytics; software

RMS (company) is a global firm specializing in catastrophe risk modeling, enterprise risk management, and insurance analytics. Founded in the late 1980s, it provides probabilistic models, software platforms, and consulting for natural catastrophe and casualty exposures used by insurers, reinsurers, brokers, and governments. The firm has played a central role in shaping how Munich Re, Swiss Re, Lloyd's of London, Aon, and other market participants price and manage exposure to events such as earthquakes, hurricanes, and floods.

History

RMS was established in 1987 amid growing industry concern after events like the 1985 Mexico City earthquake and the 1989 Loma Prieta earthquake, when insurers and reinsurers sought improved loss estimation methods. Early work drew on seismic research from institutions such as the United States Geological Survey, California Institute of Technology, and Imperial College London and integrated insights from catastrophe science used by National Oceanic and Atmospheric Administration modelers. Throughout the 1990s and 2000s RMS expanded model coverage to include tropical cyclones informed by data from National Hurricane Center, flood modeling reflecting studies by FEMA, and secondary perils following events like Hurricane Katrina and the 2011 Tohoku earthquake and tsunami. Strategic investments, acquisitions, and partnerships with firms such as Ariel Re, Willis Towers Watson, and technology companies propelled RMS into broader analytics and cloud services. In the 2010s and 2020s the company adapted to demands for cyber risk modeling, climate-change attribution studies reflecting work by the Intergovernmental Panel on Climate Change, and enterprise resilience tools used by sovereigns and multinational corporations.

Business model and services

RMS operates a subscription and licensing business model supplying probabilistic catastrophe models, software-as-a-service platforms, and professional services. Customers including Allianz, Chubb, Zurich Insurance Group, Hannover Re, and national authorities license model suites for underwriting, portfolio management, and regulatory compliance such as Solvency II and International Association of Insurance Supervisors-aligned frameworks. RMS offers exposure management, portfolio optimization, and scenario analysis used in reinsurance placement with brokers like Marsh and Guy Carpenter. Consulting engagements tie to catastrophe risk transfer instruments such as catastrophe bonds arranged in capital markets via participants like Goldman Sachs and Barclays. The company monetizes model updates, geographic expansions, and bespoke hazard assessments for World Bank and development agencies.

Technology and products

Core RMS technologies combine stochastic event sets, vulnerability functions, and financial terms within modeling engines and cloud platforms. Flagship products include catastrophe model libraries for perils such as earthquakes, tropical cyclones, flood, severe convective storms, and wildfire; analytics platforms for portfolio-level aggregation; and software integrations for underwriting systems used by carriers like MetLife and Prudential Financial. RMS leverages scientific inputs from agencies including U.S. Geological Survey, NOAA, European Space Agency, and climate datasets aligned with Coupled Model Intercomparison Project outputs. The company has developed APIs and enterprise connectors to integrate with policy administration systems from vendors such as Guidewire and data providers like Moody's Analytics and S&P Global. Advances in machine learning, remote sensing, and high-performance computing underpin model calibration and loss estimation workflows.

Market position and clients

RMS is positioned among a small group of specialized catastrophe modeling firms competing with vendors like AIR Worldwide and CoreLogic for global insurance, reinsurance, and capital markets business. Major clients include primary insurers, reinsurers, wholesale brokers, and investor groups active in insurance-linked securities markets. RMS models are routinely cited in industry loss estimates after major events and are used by regulators, rating agencies such as Moody's Investors Service and S&P Global Ratings, and public-sector entities for resilience planning. Geographic reach covers North America, Europe, Asia-Pacific, Latin America, and Africa, with strategic engagements in catastrophe-prone jurisdictions including Japan, United States, Caribbean nations, and Philippines disaster risk programs.

Leadership and corporate governance

RMS leadership historically combined actuarial, scientific, and commercial expertise; senior executives have included professionals with backgrounds at institutions like Imperial College London and financial firms such as JP Morgan. Governance structures reflect private ownership and investor oversight alongside advisory panels drawing on academics from Columbia University, Stanford University, and international scientists involved with the Intergovernmental Panel on Climate Change. The board and executive team oversee model governance, peer review processes, and transparency measures intended to balance commercial confidentiality with scientific scrutiny demanded by clients and regulators.

Controversies and legal issues

RMS has faced scrutiny over model transparency, calibration choices, and the commercial implications of model updates that can materially affect client balance sheets and insurance pricing, drawing commentary from industry bodies such as Insurance Information Institute and analysts at Moody's. Disputes have arisen when differing model outputs among vendors led to contested loss allocation in reinsurance claims and retrocession arrangements involving market participants like Bermuda-based reinsurers. Litigation and arbitration related to model reliance have involved insurers and brokers, and regulatory oversight discussions have included entities such as European Insurance and Occupational Pensions Authority and national supervisory authorities.

Philanthropy and corporate responsibility

RMS engages in corporate responsibility through data-sharing initiatives, pro bono work for disaster-prone communities, and collaboration with development organizations such as World Bank and United Nations Office for Disaster Risk Reduction. The company supports academic research via partnerships with universities like University College London and contributes to capacity-building efforts in emerging markets to improve resilience and insurance penetration. Environmental, social, and governance commitments align with investor expectations and reporting frameworks related to climate risk disclosure advocated by groups including the Task Force on Climate-related Financial Disclosures.

Category:Companies based in London Category:Risk modeling firms Category:Catastrophe modeling