RMS Predicts Industry Exposures to Increase

April 20, 2007

Risk Management Solutions, a catastrophe risk modeling firm based in Newark, Calif., announced it anticipates there will be increases in its Industry Exposure Database, which may impact the measured risk for catastrophe bonds that rely on industry loss estimates (such as the PCS index).

While the company has not yet finalized its estimation of the magnitude of the change, it said it expects Florida residential to exhibit the most significant increase in risk. The new view is primarily driven by increases in the RS Means Construction Cost Index of approximately 15 percent over the past several years, plus a smaller increase reflecting recent growth rates in exposures reported for the admitted Florida residential market, the company said.

The new risks are expected to be announced on April 30.

Source: RMS