RMS rebounded from the more difficult trading conditions of 2009 to achieve strong underlying^† revenue growth of 12% and operating profit growth of 12%, whilst maintaining profit* margins at approximately 30% and continuing its investments in the Next Generation platform and other growth initiatives in the Data and Life and Health markets. The reported results were unaffected by foreign exchange movements this year with little change in the average sterling: US dollar exchange rate.

RMS achieved a balanced performance across its various business units. While nearly 75% of new sales were once again achieved in the core modelling business, more than 25% of new sales came in growth areas such as Emerging Risk Solutions, Capital Markets, and Data Solutions.

Operating achievements for the year included the release of RiskLink version 10.0, the launch of the first of RMS's Next Generation platform capabilities, in the form of Enterprise Grid Computing (EGC), and continued sales momentum for growth initiatives such as RMS's Data Quality Analytics, ('Miu') software for managing portfolios of catastrophe ('cat') bonds, and the Life and Health market, including the successful completion of the first Excess Mortality cat bond.

RMS continues to focus on developing complete solutions for its clients across the re/insurance value chain. This includes providing access to sophisticated models, an ability to integrate those models into enterprise-wide business processes, and analytics that help clients make better decisions. Clients seek upstream capability to acquire and manage high-quality exposure data, and downstream capability to open and interpret the models, and then apply these insights to deliver targeted decision support for underwriting, pricing and managing their business.

RMS is developing a Next Generation platform to deliver these capabilities, and these solutions, to its global client base. The rollout of new capabilities will take place over several years, and was initiated in 2010 with the release of RMS's Enterprise Grid Computing (EGC) capability, which enables its clients to pool the computing power of their servers into one high performance grid. Benefits include unparalleled analysis speed and scalability, flexible job and resource management, and highly efficient use of computing resources, all leading to deeper catastrophe risk insights and faster time-to-market. RMS is targeting delivery of its full suite of Next Generation platform capability in 2013.

RMS continues to focus primarily on the commercial catastrophe modeling business, which includes modelling of natural hazards risks such as earthquake, hurricane and flood, as well as terrorism risk and risk from pandemic diseases. Its primary market is the global property and casualty re/insurance industry, where it currently serves over 350 customers in 30 countries around the world. Products and services are developed and delivered through the activity of nearly 550 RMS employees in North America, Europe, Japan and China, and more than 2,200 additional employees at India-based RMSI.

RMS models are deeply embedded in risk decision-making processes throughout the re/insurance vertical, including insurance companies, insurance and reinsurance brokers, reinsurers and the capital markets. During 2010, RMS was engaged in the development of substantial updates to two of its core peril models, Atlantic Hurricane and European Windstorm, which will be released as RiskLink 11.0 in 2011. The release is driven by significant increases in hazard and loss data, as well as advances in research and technology since the models were last updated. RMS will also be releasing a new China Typhoon model in 2011.

RMS continues to expand 'upstream' from its models to provide its clients with data and data management solutions. In 2010, RMS completed additional sales of its Data Quality Toolkit in new markets such as Bermuda. This product integrates client business rules with RMS analytics to ensure that data is complete, consistent, accurate and fit for purpose. RMS is continuing to improve its data solutions, and expects to release the next version of the Toolkit in 2010/11, as part of its mission to help the industry achieve a universal standard for measuring, managing and communicating data quality.

The capital markets experienced a strong rebound from 2009's reduced level of activity. RMS took advantage of improved markets to execute 15 cat bond deals this year, and maintained its leading market position. In addition, RMS continued to sell its Miu software product to clients and investors to help manage portfolios of cat bonds, with an expanded version scheduled for release in 2010/11.

One of RMS's emerging growth areas is the Life and Health marketplace, where it is pursuing a variety of initiatives related to Longevity and Excess Mortality risk. With respect to Longevity, RMS has developed a strong pipeline of interest, including the UK pension market, where RMS's efforts to project longevity risk more accurately are seen as an opportunity to manage existing books of pension liability better. With respect to Excess Mortality, RMS was chosen in 2010 to be the modeller for Swiss Re's excess mortality bond, VITA, the first such bond executed in the capital markets.

RMS once again achieved its operating profit budget while maintaining a strong investment programme in initiatives designed to generate future growth, including its Next Generation software platform, Data Solutions products and services, and Emerging Risk Solutions such as Life and Health.

The new year has started well with a number of contracts booked and a solid sales pipeline. RMS has now released initial elements of its Next Generation platform, including new capability such as Enterprise Grid Computing (EGC). In its Life and Health initiatives, it has a strong pipeline of business opportunities in the Pensions market for its new developed Longevity risk modelling product and services. RMS is expecting to achieve low double digit growth again this year.