RMS Data Qualit y Analy tics deliver objective and independent insight into proper t y exposure data, allowing

g insurers and reinsurers to assess the qualit y of the data input into catastrophe models. Evaluate data qualit y, measure its impact, and target improvements where they mat ter most for more informed risk management decisions.

Data Qualit y Analy tics

RMS Data Quality Analytics consist of data quality scores and accuracy assessments that target the primary elements of property exposure data: Where it is Location What it is Vulnerability attributes How much it is Valuation Data Quality Analytics leverage RMS independent, third-party catastrophe modeling expertise to provide insurers and reinsurers with objective insight into exposure data quality. The resulting data metrics and reports provide a standardized method to easily communicate data quality across the industry. Applications and benefits include: Reduced Operational Risk in Portfolio Management

Data Qu a l i t y A na ly t i c s P ro d u c t s a n d S e rv i c e s
Analytics can be delivered through software, consulting services, and other service solutions to meet an organizations needs: Data Quality Toolkit: Desktop application to assess and enhance data quality for reinsurance underwriting and portfolio management ExposureRefine Service: RMS consulting service to assess and manage exposure data quality for robust insurance and reinsurance risk management practices Data Analytics Service: Service to evaluate and improve data quality at the point of underwriting

- Better internal data quality controls and systematic efforts to understand and improve exposure data quality demonstrate robust risk management practices - Improved exposure data quality improves the accuracy of model results, resulting in fewer post-catastrophe surprises Improved Underwriting Risk Selection and Pricing - Risk selection: Analytics that indicate good data quality can make risks more attractive and can potentially merit an increased line size; metrics and heuristics can serve as underwriting guidelines - Pricing: Data Quality Analytics can be accessed by pricing systems to inform premium adjustment, including surcharges and credits for data quality Improved Confidence in Reinsurance Transactions - Analytics enable insurers to demonstrate their command over data quality issues, resulting in stronger reinsurance submissions Ability to Demonstrate Superior Capital Allocation to Rating Agencies - Data quality management performance contributes to rating agency decisions on rating upgrades or downgradescompanies can strengthen their rating using Data Quality Analytics to show active management of exposure data quality Informed Reinsurance Portfolio Management - Peer-to-peer comparisons across cedants allow for objective, consistent, and systematic ranking - Data Quality Analytics reports facilitate more informed discussions and stronger client relationships during renewal season Increased Confidence in Indemnity Cat Bond Transactions - Data quality assessment, included as part of an indemnity bond disclosure, provides investors an objective, consistent, and quantitative measure of data quality that can be compared across bond issuers to increase confidence

Compare relative data quality for cedants, accounts or regions to each other or over time.

Sort and filter results via interactive, tabular reports for in-depth analysis.

K e y C om p on e n t s o f Data Qu a l i t y A na ly t i c s
Data Quality Analytics consist of completeness scores and accuracy assessments. These transparent, actionable, and easy-tocommunicate metrics evaluate data quality and inform portfolio management and underwriting decisions.

Completeness Scores: Improve Data Quality Where it Matters Most

Informed by RMS catastrophe models, completeness scores quantify the quality of exposure data, identifying gaps in data and assessing the impact of unknown or low-resolution data on model results. Metrics evaluate a suite of factors, and include: Completeness Scores: Weighted by peril, hazard severity, hazard gradient, line of business, and other factors, completeness scores measure: - Geocoding resolution to assess the variability in modeled losses resulting from the level of geocoding resolution - Vulnerability completeness to measure the amount of variability in modeled losses resulting from missing primary vulnerability attributes, such as occupancy, construction class, year built, and number of stories
2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% -6.0% -7.0% -8.0% 100 Yr 250 Yr AAL 100 Yr 250 Yr AAL

The variation in loss cost illustrates the range in expected loss as a result of missing vulnerability attributes.

Variation in Loss Cost: Measures the potential variation in model loss estimates resulting from the percentage of lowresolution geocoding and unknown vulnerability attribute information in a data set. For example, in a case where there are 10 buildings8 with known construction type, 2 with unknown construction typethe variation in loss cost indicates the maximum variation (+/-) due to the 2 unknown construction types if they were coded to the best case and worst case attributes.

Accuracy Assessment: Reveal Data Credibility and Objectivity

Portfolio % of Portfolio* with Conflicting Attributes Main Driver

Accuracy is assessed across three dimensions. First, formalized validation heuristics identify inconsistent or illogical combinations of geocoding, vulnerability, building valuation, and financial attributes, and investigate suspicious patterns of data. Then, data is compared against the RMS ExposureSource database, a comprehensive database of location-specific, commercial and residential property exposure data. Finally, loss result comparisons are made to indicate how loss results for the portfolio as coded would compare to results if occupancy was known but everything else unknown (i.e., industry inventory). Together, these measures illuminate potential accuracy issues.

Portfolio A

24% Wood structure > 10 Stories 7% Light Metal Construction > 3 Stories 4% Unreinforced Masonry > 1940 31% Single Family Dwellings of Concrete Construction 0% 5% 10% 15% 20% 25% 30% 35%
* Where potential conflicting attributes known

Portfolio B

Portfolio C

Portfolio D

Validation heuristics flag geocoding, vulnerability, building valuation and financial issues.

The RMS ExposureSource Database

Developed specifically to provide exposure data optimized for use with catastrophe modeling in the insurance industry, the ExposureSource database provides a comprehensive and robust source of U.S. property exposure data for improved risk analysis and management. This best confidence database consists of location-specific U.S. commercial and residential data compiled from a number of third-party databases that is validated and assigned confidence thresholds through extensive field surveys, satellite imagery, photographs, research, and other sources. This compilation of accurate building attribute data helps insurers and reinsurers assess and improve the quality of exposure data.
Construction Class Number of Stories Year Built Square Footage Attribute ExposureSource Identification Number Address Latitude Longitude Occupancy 757 Market Street, San Francisco, CA 94013 37.7865 -122.4046 Hotel Multi-Family Dwelling General Commercial Moment Resisting Steel Frame 40 2001 916,073 Value 422374706

ExposureSource records contain property-specific information that describe the characteristics of a structure.

P ro d u c t s a n d S e rv i c e s
Data Quality Analytics can be accessed through a variety of platforms, including the in-house Data Quality Toolkit as well as through the RMS ExposureRefine and Data Analytics services, to deliver actionable insights via the solution that best meets an organizations business needs.

RMS Data Quality Toolkit: Desktop Data Quality Analytics

The Data Quality Toolkit is a Microsoft Windows, client-server based desktop application that combines comprehensive exposure data quality assessment with maximum flexibility for measuring, reporting, and improving exposure data quality at the portfolio level, allowing users to: Score and interact with exposure data across multiple EDMs: Portfolios can be selected for analysis from one or more Exposure Data Module (EDM) databases to score and report data quality by user-defined groupings such as by cedant, broker, or business unit. Validate and enhance data with the ExposureSource database: Compare building attributes in exposure data with the ExposureSource database for accuracy assessment. Additionally, the enhancement feature enables the improvement of exposure data by replacing incorrect or missing attributes with those from the ExposureSource database. Create user-defined validation heuristics: A rule builder enables the creation of additional validation heuristics, which can either be incorporated alone or combined with RMS-defined rules into customized validation heuristics profiles. Provide standardized reports to the market: The toolkit provides a standard data quality report as well as high-level portfolio summaries for exposure, completeness, and accuracy. Compare data by cedants, business units, or over time: Compare results from multiple results databases to evaluate relative data quality over time or across groupings of data.

R M S D ata Q u a l i t y S e rv i c e s
RMS offers a range of services for insurers and reinsurers to engage with RMS analysts based on the scope of services required. Working with RMS analysts, companies gain efficiency, speed, and quality assurance without the expense of recruiting, training, and employee overhead. All services can be licensed stand-alone or in conjunction with other hosted services, and include: ExposureRefine Data Cleansing Data Analytics RiskAnalytics
Raw location schedule in multiple formats

RMS Service Suite Distinct, but integrated, hosted services

Data Cleansing
Prepare exposure data for modeling Enhance geocoding resolution Provide cleansed, model ready, and consistent input

Cleansed RMS Ready location schedule

Data Analytics
Provide RMS Data Quality A nalytics Flag suspicious data

Enhanced RMS ready risk schedule, custom data quality reports

RiskAnalytics

Custom model analytics

Deliver prebind pricing analytics Report on portfolio risk metrics over time What-if scenario analytics Post-event estimates

Enhance missing or incorrect information using ExposureSource database

The RMS Service Suite consists of distinct, but integrated services that address data quality at all stages of the catastrophe modeling process.

RMS ExposureRefine Service: Portfolio-Level Data Quality Assessment

The ExposureRefine consulting service provides insurers and reinsurers with clear and objective findings that quantitatively measure portfolio data quality. The integrated suite of capabilities offered by the ExposureRefine service improve the reliability of catastrophe loss analyses by identifying and quantifying the data quality issues that have the most influence on the accuracy of model results. In-depth analyses help identify issues that may not be readily apparentis data robust in high-hazard, high-value locations, or are there processing errors that may systematically corrupt data and bias results? Analyses and reports from ExposureRefine provide actionable insights that enable data quality improvements where they have the maximum impact. The service includes sensitivity analyses on modeled loss results to further assess the impact of a clients data quality issues. Analyses and reports produced by ExposureRefine: Provide consistent measures, comparisons, and benchmarks of the quality of data submitted by underwriters, brokers, and cedants Quantify the impact of data quality on loss results and provide actionable insights that enable companies to understand the impact of poor data on the reliability of model results Allow targeted improvements to data quality that have the maximum impact on the accuracy of model results Assist in identifying and establishing process improvements to address systematic data quality issues

Original Data

Completeness Scores Assess Completeness

Validation Heuristics

Additional Investigations

Compare & Enhance Improve Data

Actionable Insights Analysis & Recommendations

Assess Accuracy

The ExposureRefine service uses a systematic process to analyze exposure data and assess data quality, providing insights and prioritized recommendations for improvements.

RMS Data Analytics Service:Improved Underwriting Decision-Making

The Data Analytics service empowers insurers to evaluate the importance of exposure data quality to catastrophe model results at the point of underwriting. The service provides account-level data quality insights that are synthesized into actionable reports enabling underwriters to assess the data quality of a risk, measure its importance, and target data improvements, facilitating more informed pricing decisions. Reports can be customized to complement internal underwriting packs or model result summaries, providing enhanced insight into the risk being underwritten. Quick turnaround times allow Data Quality Analytics to be incorporated into existing in-house processes without impacting internal or external service levels. The Data Analytics service can be subscribed to as a stand-alone offering, or licensed in conjunction with other RMS hosted services.
LOC NUM 7 11 10 20 21 LOC NUM 7 11 10 20 21 CA NC TN NJ GA

Identify main regions contributing to poor attribute completeness (earthquake peril)

STATE PERIL EQ EQ EQ EQ EQ TIV ($M) 28.18 207.21 26.15 9.81 4.84 % TIV 0.10 0.73 0.09 0.03 0.02 Vulnerability Completeness Score (VCS) 59.40 66.00 53.40 53.40 53.90 Importance to overall account (VCS weight) 84.30 11.00 3.10 1.40 0.20

Five locations in CA contribute 80% to overall attribute completeness of the account

VCS -POTENTIAL IMPROVEMENT STATE CODE CA CA CA CA CA TIV ($M) 11.88 6.19 6.36 1 .9 1.15 Vulnerability Completeness Score (VCS) 58.8 58.8 61.4 58.8 58.8 Importance to overall account (VCS weight ) 35.9 18.7 16.8 5.7 5.1 CONS 0 0 0 0 0 OCC 0 0 0 0 0 STORIES 9.9 9.9 15.9 9.9 9.9 YEAR BUILT 31.3 31.3 22.7 31.3 31.3

Enhance missing number of stories and year built using RMS ExposureSource database to improve overall data completeness
VCS -POTENTIAL IMPROVEMENT STATE CODE CA CA CA CA CA TIV ($M) 11.88 6.19 6.36 1 .9 1.15 Vulnerability Completeness Score (VCS) 100 90.1 61.4 68.7 100 Importance to overall account (VCS weight ) 3 5 .9 1 8 .7 1 6 .8 5 .7 5 .1 CONS 0 0 0 0 0 OCC 0 0 0 0 0 STORIES 0 9 .9 1 5 .9 0 0 YEAR BUILT 0 0 2 2 .7 31.3 0

The Data Analytics service allows insurers to target data quality improvements where they matter most.

Vulnerability Completeness Score = 15

100 80

Vulnerability Completeness Score = 92

Occupancy
60

Construction
40

Number Stories
20

Year Built
0 Hurricane Portfolio A Hurricane Portfolio B

A portfolio with a high vulnerability completeness score indicates that information is comprehensively and systematically captured for the attributes that have the greatest impact on model results. Low scores can result if a key attribute is missing, even though the majority of the data may be complete.

H e i ght Di s tri buti on

100%
ME ME

80% 60% 40%

ZIP

Street
PA PA

NY NY

VT VT NH NH MA MA RI RI

NJ NJ

CT CT

Geocoding Resolution Score = 20

20% 0%
NM NM MS MS TX TX LA LA AL AL

WV WV VA VA NC NC

DE DE MD MD

SC SC

Low

Medium

High

GA GA

C o n struction Di s tri buti on

30%

FL FL

Hurricane Portfolio A

20%

10%
ME ME NY NY VT VT NH NH MA MA PA PA NJ NJ CT CT RI RI

0% Wood Masonry Steel Concrete Light Metal

ZIP

Street

Age Di s tri buti on

60%

Geocoding Resolution Score = 85

WV WV VA VA NC NC

DE DE MD MD

NM NM MS MS AL AL

SC SC

40%

TX TX

LA LA

GA GA

Geocoding Resolution Score

100

20% Portfolio 0% Old Medium New Industry

FL FL

Hurricane Portfolio B

Industry comparison metrics indicate how aggressively or conservatively the portfolio has been coded compared to the underlying industry inventoryi.e., how loss results for the portfolio as coded would compare to results if occupancy is known but everything else is unknown.

Geocoding resolution scores are region and peril specific. Although these two hurricane portfolios have the same percentages of street and ZIP Code level geocoding, Portfolio A has a very low score because locations are concentrated in high risk regions.

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