MSB, Actuarial Firm EMB to Partner on Risk-Based Modeling for Property Carriers

LOS ANGELES – MAY 29, 2007 — MSB, an MDA company and the leading worldwide provider of building cost data and estimating technology to the property insurance industry, announces a strategic alliance with expert property and casualty actuarial consultants EMB America LLC to develop and build an industry-wide model for a property risk-based scoring model. The model will be available for demonstration later this year and is designed to help individual carriers develop finely-tuned risk segmentation to more appropriately reflect their actual exposures to loss. This means fair premiums for consumers and more profitable books of business for carriers.

“We’ve seen the financial success that personal auto carriers have been able to achieve by using databases of auto and driver characteristics to create multiple rating classifications,” says Micheline Szocs, Director of Strategic Initiatives at MSB. “MSB Risk-Based Modeling will revolutionize property selection criteria and rating plan development by combining MSB’s construction cost and building trend knowledge, proprietary databases of home characteristics and property claims, and the actuarial and predictive modeling expertise of EMB to deliver a credible model in which carriers can have strong confidence.”

According to Jeff Kucera at EMB America LLC, who is well-known in the insurance industry and whose firm is already doing predictive modeling, “Rating for homeowners insurance has historically lagged behind that of private passenger automobile in the use of predictive modeling and the creation of new, innovative rating factors. This has the potential to be a major step forward in how this line of business is rated and to recognize some of the major contributors to why certain types of homes are more prone to have a loss, and why the cost of repairing a dwelling can be significantly different from one home to the next.”

MSB’s Risk-Based Modeling solution will deliver “scores” based on correlations of detailed home characteristics that are predictive of loss experience, both “good” and “bad.” Scores will be provided for each of six perils plus one composite score, allowing individual carriers to add to existing pricing models, create new pricing models, or develop underwriting rules. Scores will be accessible within the agents or underwriters workflow in MSB’s Residential Component Technology(R) (RCT) home valuation application as they input the building cost characteristic information.

Szocs explains that in the 1990s when losses were high, many carriers responded by raising rates and physically inspecting homes. Today, as neither consumers nor regulators are likely to accept double digit rate increases, carriers need other pricing options that are based on objective, observable criteria that identify problematic risks before they are written and create price competitiveness based on the right price for each type of risk.

About MSB

MSB, an MDA company, is the leading supplier of local building cost information, residential and commercial property valuation technology and services for the property and casualty insurance sector in the United States and Canada. MSB has five offices throughout the U.S. and Canada. For
information, visit MSB’s Web site at HTTP://

About MDA

MDA provides advanced information solutions that capture and process vast amounts of data, produce essential information, and improve the decision making and operational performance of business and government organizations worldwide.

Focused on markets and customers with strong repeat business potential, MDA delivers a broad spectrum of earth and space based information solutions, ranging from complex operational systems, to tailored information services, to electronic information products. MDA employs more than 3,000 people in locations across the United States, the United Kingdom, and Canada. The Company’s common shares trade on the Toronto Stock Exchange under the symbol TSX:MDA.

About EMB

EMB America LLC, part of EMB Consultancy, is a leading property and casualty actuarial consulting firm headquartered in San Diego, California, and with additional offices in San Antonio and Chicago. EMB America is part of the worldwide EMB organization. Emphasizing knowledge transfer, EMB is known for their outstanding consulting work and a variety of state-or-the-art software products, led by EMBLEM, their predictive modeling software, which is currently used by 18 of the 20 largest writers in the United Kingdom, and 8 of the 10 largest private passenger writers in the United States.