RMS Purchases HailCalc Europe

Newark, Calif. – January 8, 2007 –  In response to a growing insurance industry need, Risk Management Solutions (RMS), the world’s leading provider of products and services for the management of natural hazard risk, today announced the acquisition of HailCalc Europe, the first fully probabilistic hail loss simulation software for Europe. The model was built by a team of atmospheric scientists in conjunction with Swiss Re and has been actively used to assess hail risk in Europe since 2004.

“RMS is excited to offer the HailCalc Europe technology to a wide range of industry users through its extensive global support network,” said Jörg Müller, vice president of RMS Zurich. “There is an increasing demand for hail modeling in Europe, and together with recent and upcoming releases of new flood and earthquake models, RMS clients will be able to model key drivers of loss across most of continental Europe.”

During summer months in Continental Europe, damaging hail produced by severe thunderstorms is a significant regional hazard causing severe, though localized damage that is often underestimated. Insurers are widely exposed to hail losses because cover is typically included within windstorm policies and most fully-comprehensive motor policies across Europe. The catastrophic 1984 Munich hailstorm generated more than €750 million of insured losses in today’s values, of which more than 50% was attributed to auto damage.

“Regionally-based insurance companies with business in hail-exposed areas will particularly benefit from the addition of HailCalc Europe, with its capability to quantify hail-related risk to commercial, industrial, residential, agricultural, and auto lines of business,” said Reinhard Maeger, executive director at Aon Re Hamburg. “Aon has been intensively using HailCalc Europe over the past two years to run analyses for its client base in Europe.”

HailCalc Europe originated from research into the relationship between radar measurements and hail losses in Switzerland in 1999. The developers collaborated with Swiss Re to extend the methodology across eight European countries, blending their innovative methodology with Swiss Re’s wealth of expertise and large volume of claims data to derive damage functions. “The development of the first probabilistic hail model for Europe enabled Swiss Re to estimate the hailstorm risk faced by the insurance industry much more accurately than ever before,” said David Bresch, head of atmospheric perils at Swiss Re.

The acquisition of HailCalc Europe complements the RMS^® Europe Windstorm Model, which was upgraded and expanded in 2006 to include 12 countries, as well as a separate high-frequency component to capture wind-related losses from severe thunderstorms and downbursts in addition to extra-tropical cyclones. The combination of the two models will uniquely enable RMS clients to assess their windstorm risk from key sources of potential storm loss.