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Risk Management Solutions, Inc. Investor Briefing - B2B Hemant Shah, Bobby Soni and Matthew Grant
5 September 2013
Hemant Shah President & Chief Executive Officer
2
2000
2004
2006
2008
2010
International Geocoding
Accumulation
Updated U.S.Hurricane
Model
Updated Europe Windstorm Model
New U.S. & Canada
Climate Hazard Models
Upgrade of North American
Earthquake Models,
Expansion of Latin American
Earthquake Models
Enterprise Grid
Computing
Upgrade and
Significant Expansion
of North Atlantic
Hurricane Models
Europe Windstorm
Model Upgrade
RMS Hosted Solutions
Expansion of Asian
Model Suite
Models Cover
90+ Countries,
Over 90% of Global Property
Insurance Premium
RMS(one)
1988
1992
1994 1996 1998
START Founded at
Stanford University
California Earthquake
Model
U.S. Hurricane
Model
U.S. Earthquake
and Hurricane
Models
London Office Opens
Models Cover
12 Countries
Models Cover
40 Territories
RMS Purchased by
RiskLink – DLM
Expansion of Weather
Risks
Terrorism & Workers Compensation
Models
Models Cover
42 Countries
2002
1993 Exceedance Probability
Curve
RiskLink - ALM
for Treaty Reinsurers
California Earthquake
Model
Models Cover
90+ Countries,
Over 90% of Global Property
Insurance Premium
3
©2013 Risk Management Solutions, Inc.
©2013 Risk Management Solutions, Inc.
FY12 Revenue 5 Year CAGR to FY12 = 11%
5 Year operating margin of c.30%
$258M 5
95% Revenue from re/insurance vertical
3% Revenue from single largest client
90% Revenue from recurring contracts
60% Revenue from US/NA vs. 40% ROW domiciled clients
~75% Revenue from clients paying us more than $1M/Yr.
Subscription (Recurring) Revenue Business Model with Renewal Rates at 95%+
6
Strong Business Model
RMS Acknowledged as Leading Modeler of Storm Surge Risk
7
8
©2013 Risk Management Solutions, Inc.
10
Bobby Soni Chief Platform and Services Officer
11
RMS(one) The Environment
12
Real-Time Own Your View of Risk
All Exposures All Risks
One Place
Democratization of Insights
High-Definition Models
13
RMS(one) World Class Big Analytics and Big Compute Technology
©2013 Risk Management Solutions, Inc.
orld Class Big Analytics and Big Compute orld Class Big Analytics and Big Compute
RMS(one) World Class Big Analytics and Big Compute Technology
©2013 Risk Management Solutions, Inc.
orld Class Big Analytics and Big Compute Analytics and Big Compute orld Class Big Analytics and Big Compute
1. Client decided to license RMS(one) after evaluating an option to build their own system.
2. Client decided to license RMS(one) even after initiating their own development. They are now winding down the internal project.
3. Client has built their own system providing a subset of RMS(one) functionality, but is evaluating retiring that system and licensing RMS(one).
RMS(one) Taps New Spending Budgets Client buy-in
16
Matthew Grant Group Executive,
Global Client Development
17
RMS(one) Accessing New
Revenue Streams
18
Current Revenue Model
Annual licence
Fixed Fee
Annual licence & Variable usage fee
Fixed Fee Models
Users
Usage
Platform as Service/ Ecosystem
Consulting
Variable Fee
Future RMS(one) Revenue Model
19
Illustrative Case Study
20
Sample Insurance
“First choice, right choice“
Global reinsurance company $600M total annual premium; $300M is
property catastrophe 300 underwriters RMS Client for 10 years, $3M license fee
The Client
Illustration only, not actual client 21
Sample Insurance
“First choice, right choice“
Increasing competition, pressure on premiums
Potential for large unexpected losses (e.g., Thailand, Japan and New Zealand)
Internal systems need updating
The Concerns
Illustration only, not actual client 22
Sample Insurance
“First choice, right choice“
Effective risk management to optimise returns
Accelerate growth in target markets Competitive advantage with best
underwriting analytics Increase process efficiency to reduce costs
Client’s Strategic Goals*
Illustration only, not actual client
*2012 Analyst presentation
23
Sample Insurance
“First choice, right choice“
1. Incremental improvements 2. Build in house solution 3. Fully embrace RMS(one)
The Options
Illustration only, not actual client 24
2012
Annual Fixed Fee
Variable Fee
10
2015
50 Users
$2.8M
2013
10
$3M Fees
Illustration only, not actual client
2014
15
2016
200
Circa $6M
Models
Users
Usage Ecosystem Services
RMS Fees for Sample Insurance
25
Pre-Release Client Commitments to RMS(one)
26
Demand Validation
Chart represents total annual
contract values at Aug 2013
Joint Development Partners
4 companies 10% of revenue
Early Access Partners
23 companies 38% of revenue
Remaining Clients
52% of revenue
4 clients committed to RMS(one)
23 clients active in design phase of RMS(one) implementation
Represent 48% of total current annual contract revenue
27
Beta Testing
16 of commi�ed clients/clients in design stage have been beta tes�ng RMS(one) since July 2013
30 companies involved in tes�ng by December 2013
28
2000
2004
2006
2008
2010
International Geocoding
Accumulation
Updated U.S.Hurricane
Model
Updated Europe Windstorm Model
New U.S. & Canada
Climate Hazard Models
Upgrade of North American
Earthquake Models,
Expansion of Latin American
Earthquake Models
Enterprise Grid
Computing
Upgrade and
Significant Expansion
of North Atlantic
Hurricane Models
Europe Windstorm
Model Upgrade
RMS Hosted Solutions
Expansion of Asian
Model Suite
Models Cover
90+ Countries,
Over 90% of Global Property
Insurance Premium
RMS(one)
1988
1992
1994 1996 1998
START Founded at
Stanford University
California Earthquake
Model
U.S. Hurricane
Model
U.S. Earthquake
and Hurricane
Models
London Office Opens
Models Cover
12 Countries
Models Cover
40 Territories
RMS Purchased by
RiskLink – DLM
Expansion of Weather
Risks
Terrorism & Workers Compensation
Models
Models Cover
42 Countries
2002
1993 Exceedance Probability
Curve
RiskLink - ALM
for Treaty Reinsurers
RMS(one)
29
30
31
