Moody’s Acquires Praedicat, Adding Casualty and Liability Modeling Capabilities

Rhea-AI Summary

Moody's (NYSE:MCO) has acquired Praedicat, a leading provider of casualty insurance analytics. This acquisition enhances Moody's risk assessment capabilities by adding comprehensive casualty and liability modeling to its suite of insurance solutions. Praedicat's models and predictive analytics help insurers and reinsurers navigate risks associated with catastrophic events, including product and environmental liabilities.

The integration of Praedicat's capabilities will provide Moody's casualty insurance industry customers with a holistic approach to understanding risk exposure. This move builds on Moody's 2021 acquisition of RMS and advances its investments in new analytics and growth in the casualty market. The transaction terms were not disclosed, and it is not expected to have a material impact on Moody's 2024 financial results.

Positive

• Acquisition of Praedicat enhances Moody's capabilities in casualty and liability modeling
• Expands Moody's offerings in the insurance industry, potentially increasing market share
• Builds on previous strategic acquisitions, showing consistent growth strategy
• Integration provides a more comprehensive risk assessment solution for customers

Negative

• Financial terms of the acquisition not disclosed, limiting assessment of the deal's value
• No material impact on 2024 financial results, suggesting short-term financial benefits

Insights

Financial Analyst

Moody's acquisition of Praedicat is a strategic move to enhance its insurance analytics portfolio. This acquisition complements Moody's 2021 purchase of RMS, solidifying its position in the risk assessment market. While the financial terms weren't disclosed, Moody's stated it won't materially impact 2024 results, suggesting a relatively small deal size.

The integration of Praedicat's casualty and liability modeling capabilities into Moody's suite of insurance solutions creates a more comprehensive offering. This could potentially increase Moody's market share and revenue in the insurance analytics sector, especially as demand for advanced risk assessment tools grows due to increasing catastrophic event losses.

Investors should note that this acquisition aligns with Moody's strategy of expanding its data and analytics capabilities, which could drive long-term growth and diversify revenue streams beyond its core credit rating business.

Insurance Industry Expert

The acquisition of Praedicat by Moody's is a significant development for the casualty insurance industry. Praedicat's specialization in casualty catastrophe modeling addresses a critical need in the market, especially as insurers grapple with emerging risks like environmental liabilities and product-related claims.

By integrating Praedicat's capabilities, Moody's is positioning itself as a one-stop-shop for insurers and reinsurers seeking comprehensive risk assessment tools. This holistic approach could lead to more accurate pricing of casualty risks, potentially improving underwriting profitability for insurers who leverage these advanced analytics.

The move also reflects the insurance industry's growing reliance on data-driven decision making, particularly in areas where historical data may be This trend is likely to continue, potentially reshaping competitive dynamics in the casualty insurance market.

Tech Analyst

Moody's acquisition of Praedicat underscores the growing importance of advanced analytics and AI in the insurance sector. Praedicat's predictive analytics and modeling capabilities represent cutting-edge technology in risk assessment, particularly for complex casualty and liability scenarios.

The integration of Praedicat's tech into Moody's existing suite could lead to synergistic innovations, potentially resulting in more sophisticated, AI-driven risk models. This could give Moody's a significant competitive edge in the rapidly evolving insurtech landscape.

Moreover, this acquisition aligns with the broader trend of traditional financial services firms investing in tech capabilities to stay relevant and competitive. It's a smart move that could help Moody's future-proof its business model and capitalize on the growing demand for data-driven insights in the insurance industry.

NEW YORK--(BUSINESS WIRE)-- Moody’s Corporation (NYSE:MCO) announced today that it has acquired Praedicat, a leading provider of casualty insurance analytics. The acquisition adds comprehensive casualty and liability modeling to Moody’s range of market leading solutions for the insurance industry, further enhancing its overall risk assessment strategy.

Praedicat’s models and predictive analytics help insurers and reinsurers navigate risks associated with catastrophic events, including product and environmental liabilities. Moody’s will integrate Praedicat’s capabilities into its existing suite of insurance solutions, providing casualty insurance industry customers with a holistic approach to understanding their risk exposure.

“As losses from catastrophic events are increasing, insurers are constantly looking for science-based casualty data and analytics,” said Rob Fauber, President and Chief Executive Officer of Moody’s. “Praedicat’s industry-leading liability modeling enhances our data and analytics capabilities to deliver actionable insights that will help the casualty insurance industry customers navigate the complex risk landscape.”

The transaction builds on Moody’s previous 2021 acquisition of RMS and advances Moody’s investments in new analytics and growth in the casualty market.

The terms of the transaction were not disclosed. The transaction will not have a material impact on Moody’s 2024 financial results.

For more information on casualty and financial lines underwriting, please click here.

ABOUT MOODY’S CORPORATION

In a world shaped by increasingly interconnected risks, Moody’s (NYSE: MCO) data, insights, and innovative technologies help customers develop a holistic view of their world and unlock opportunities. With a rich history of experience in global markets and a diverse workforce of approximately 15,000 across more than 40 countries, Moody’s gives customers the comprehensive perspective needed to act with confidence and thrive. Learn more at moodys.com.

“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements contained in this release are forward-looking statements and are based on future expectations, plans and prospects for Moody’s business and operations that involve a number of risks and uncertainties. Such statements involve estimates, projections, goals, forecasts, assumptions and uncertainties that could cause actual results or outcomes to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements. Stockholders and investors are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements and other information in this document are made as of the date hereof, and Moody’s undertakes no obligation (nor does it intend) to publicly supplement, update or revise such statements on a going-forward basis, whether as a result of subsequent developments, changed expectations or otherwise, except as required by applicable law or regulation. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, Moody’s is identifying certain factors that could cause actual results to differ, perhaps materially, from those indicated by these forward-looking statements. These factors, risks and uncertainties include, but are not limited to: the impact of general economic conditions (including significant government debt and deficit levels, and inflation and related monetary policy actions by governments in response to inflation) on worldwide credit markets and on economic activity, including on the volume of mergers and acquisitions, and their effects on the volume of debt and other securities issued in domestic and/or global capital markets; the uncertain effectiveness and possible collateral consequences of U.S. and foreign government initiatives and monetary policy to respond to the current economic climate, including instability of financial institutions, credit quality concerns, and other potential impacts of volatility in financial and credit markets; the global impacts of the Russia - Ukraine military conflict and the military conflict in Israel and the surrounding areas on volatility in world financial markets, on general economic conditions and GDP in the U.S. and worldwide, on global relations and on the Company's own operations and personnel; other matters that could affect the volume of debt and other securities issued in domestic and/or global capital markets, including regulation, increased utilization of technologies that have the potential to intensify competition and accelerate disruption and disintermediation in the financial services industry, as well as the number of issuances of securities without ratings or securities which are rated or evaluated by non-traditional parties; the level of merger and acquisition activity in the U.S. and abroad; the uncertain effectiveness and possible collateral consequences of U.S. and foreign government actions affecting credit markets, international trade and economic policy, including those related to tariffs, tax agreements and trade barriers; the impact of MIS’s withdrawal of its credit ratings on countries or entities within countries and of Moody’s no longer conducting commercial operations in countries where political instability warrants such actions; concerns in the marketplace affecting our credibility or otherwise affecting market perceptions of the integrity or utility of independent credit agency ratings; the introduction or development of competing and/or emerging technologies and products; pricing pressure from competitors and/or customers; the level of success of new product development and global expansion; the impact of regulation as an NRSRO, the potential for new U.S., state and local legislation and regulations; the potential for increased competition and regulation in the jurisdictions in which we operate, including the EU; exposure to litigation related to our rating opinions, as well as any other litigation, government and regulatory proceedings, investigations and inquiries to which Moody’s may be subject from time to time; provisions in U.S. legislation modifying the pleading standards and EU regulations modifying the liability standards applicable to credit rating agencies in a manner adverse to credit rating agencies; provisions of EU regulations imposing additional procedural and substantive requirements on the pricing of services and the expansion of supervisory remit to include non-EU ratings used for regulatory purposes; uncertainty regarding the future relationship between the U.S. and China; the possible loss of key employees and the impact of the global labor environment; failures or malfunctions of our operations and infrastructure; any vulnerabilities to cyber threats or other cybersecurity concerns; the timing and effectiveness of any restructuring programs; currency and foreign exchange volatility; the outcome of any review by tax authorities of Moody’s global tax planning initiatives; exposure to potential criminal sanctions or civil remedies if Moody’s fails to comply with foreign and U.S. laws and regulations that are applicable in the jurisdictions in which Moody’s operates, including data protection and privacy laws, sanctions laws, anti-corruption laws, and local laws prohibiting corrupt payments to government officials; the impact of mergers, acquisitions, such as our acquisition of RMS, or other business combinations and the ability of Moody’s to successfully integrate acquired businesses; the level of future cash flows; the levels of capital investments; and a decline in the demand for credit risk management tools by financial institutions. These factors, risks and uncertainties as well as other risks and uncertainties that could cause Moody’s actual results to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements are described in greater detail under “Risk Factors” in Part I, Item 1A of Moody’s annual report on Form 10-K for the year ended December 31, 2023, and in other filings made by the Company from time to time with the SEC or in materials incorporated herein or therein. Stockholders and investors are cautioned that the occurrence of any of these factors, risks and uncertainties may cause the Company’s actual results to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements, which could have a material and adverse effect on the Company’s business, results of operations and financial condition. New factors may emerge from time to time, and it is not possible for the Company to predict new factors, nor can the Company assess the potential effect of any new factors on it. Forward-looking and other statements in this document may also address our corporate responsibility progress, plans, and goals (including sustainability and environmental matters), and the inclusion of such statements is not an indication that these contents are necessarily material to investors or required to be disclosed in the Company’s filings with the Securities and Exchange Commission. In addition, historical, current, and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240905321224/en/

For Moody’s Investor Relations:

Shivani Kak

Moody’s Corporation

+1 212-553-0298

Shivani.Kak@moodys.com



For Moody’s Communications:

Chris Cashman

Moody’s Corporation

Chris.Cashman@moodys.com

+1 212-553-1461

Source: Moody’s Corporation Investor Relations

FAQ

What company did Moody's (MCO) acquire in this announcement?

Moody's (NYSE:MCO) acquired Praedicat, a leading provider of casualty insurance analytics.

How will the Praedicat acquisition benefit Moody's (MCO) insurance industry offerings?

The acquisition adds comprehensive casualty and liability modeling capabilities to Moody's suite of insurance solutions, enhancing its overall risk assessment strategy and providing customers with a more holistic approach to understanding risk exposure.

Will the Praedicat acquisition have a significant impact on Moody's (MCO) 2024 financial results?

No, according to the announcement, the transaction will not have a material impact on Moody's 2024 financial results.

How does the Praedicat acquisition align with Moody's (MCO) previous strategic moves?

This acquisition builds on Moody's previous 2021 acquisition of RMS and advances its investments in new analytics and growth in the casualty market, showing a consistent strategy in expanding its insurance industry capabilities.