RMS Risk Management Tools Assist Lloyd’s Syndicates

April 15, 2004

Risk Management Solutions (RMS), a provider of products and services for catastrophe risk management, has issued a set of instructions and tools to assist Lloyd’s syndicates in completing the 2004 Lloyd’s Realistic Disaster Scenarios (RDS). The RDS analysis can be performed using the RiskLink catastrophe modeling software from RMS, which is licensed by 24 Lloyd’s managing agents representing 80 percent of the total Lloyd’s market capacity.

The objective of the Lloyd’s RDS is for syndicates to estimate the losses they would incur from a variety of hypothetical disaster scenarios, using consistent and appropriate methods and assumptions. The principal aim of the exercise is to manage the security of Lloyd’s for aggregating catastrophes and other large losses.

“Lloyd’s supports the initiatives taken to improve the ease and accuracy with which managing agents can generate their Realistic Disaster Scenarios,” said Stephen Manning, head of risk management at Lloyd’s.

To assist RMS clients and the Lloyd’s market in general, RMS has worked closely with Lloyd’s over the past several months on the updated natural catastrophe and terrorism event scenarios to ensure that the functionality provided in RMS’ RiskLink product allows syndicates to respond appropriately to the Lloyd’s RDS:

* For windstorm and earthquake perils, RMS has provided syndicates with a listing of scenario events available within RMS models that correspond to the 2004 compulsory RDSs. These RMS events reflect updates issued by Lloyd’s in 2004 for Florida Hurricane and California Earthquake.

* For terrorism, RMS has provided syndicates with target building and damage footprint information in order to generate event loss estimates using the RiskLink accumulation management capabilities. In addition, tools have been provided to assist with the analysis of exposure geocoded at the postal code level, a new requirement in 2004.

“Our presence in the Lloyd’s market allows us to craft products that meet the specific needs of our clients,” said Matthew Grant, managing director of the RMS international region. “Responding to the Lloyd’s RDS is an important exercise for both our clients and for Lloyd’s and we are committed to supporting this market with products that streamline the process to provide accurate loss estimates.”

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