Summary of Moody's Conference Call Company Overview - **Company**: Moody's Corporation (NYSE: MCO) - **Event**: Info Services Track of the Ultimate Service Investor Conference - **Date**: November 18, 2025 Key Points Industry Insights - **M&A Activity**: There has been a significant increase in M&A activity in the second half of the year, contrary to initial expectations. This includes both strategic and sponsor-backed M&A, which positively impacts issuance volumes [7][10] - **Economic Growth**: Economic growth has slowed but remains better than market expectations, contributing to a favorable environment for debt issuance [7][8] - **Default Rates**: Default rates are slightly above long-term averages but have been decreasing, which is conducive for issuance [8] - **Issuance Trends**: The strongest issuance has been in the corporate segment, particularly in investment-grade and leveraged finance [8] Financial Performance - **Revenue Growth**: Moody's anticipates medium-term organic revenue growth targets of high single digits to low double digits, with a focus on areas with strong growth potential [18][19] - **Refinancing Needs**: A significant amount of debt issued over the past five years will need refinancing, which supports future issuance [11][12] AI and Technology - **AI Opportunities**: The company views AI as a significant opportunity to monetize proprietary data and analytics, enhancing customer engagement and expanding use cases [20][21][26] - **Digital Fulfillment**: Moody's is developing a digital fulfillment model to better serve customers and monetize content across various platforms [30][31] Market Dynamics - **Investor Sentiment**: There is growing interest among investors regarding the credit quality of private credit funds, indicating a shift in focus towards understanding credit risk [48][59] - **Partnership with MSCI**: The collaboration aims to provide Moody's modeled credit ratings to investors in private credit, enhancing their understanding of credit risk [49][50] Challenges and Considerations - **Two-Speed Economy**: The U.S. economy is experiencing a two-speed dynamic, with disparities in growth across different sectors, particularly between the AI-driven economy and traditional sectors [15] - **Structured Finance Outlook**: There has been a modest reduction in the outlook for structured finance and public category issuance, attributed to slower growth in consumer finance [14][15] Strategic Focus - **Investment Areas**: Moody's plans to invest in segments with the strongest growth potential, including banking, lending, and insurance [19][38] - **Proprietary Data Utilization**: The company emphasizes the value of its proprietary data in various applications, including risk assessment and credit modeling [37][40] Conclusion - Moody's is positioned to leverage its proprietary data and analytics capabilities to navigate the evolving market landscape, particularly in the context of increasing M&A activity and the integration of AI technologies. The focus on understanding credit risk in private credit markets presents a significant opportunity for growth and engagement with investors [58][59]

Core Insights - The global modeled insured average annual property loss (AAL) from natural catastrophes has increased to $152 billion, indicating a significant rise in expected annual insured property losses [1][3] - Non-crop property and casualty losses rose by 25 percent compared to 2024, with severe thunderstorms and other frequency perils accounting for two-thirds of total potential losses [1][4] - The report highlights a $32 billion increase in non-crop global modeled insured AAL over 2024, reflecting an upward trend in catastrophe losses globally [3] Industry Trends - Over the past five years, insured losses have averaged $132 billion per year, compared to $104 billion in the preceding five-year period, indicating a growing trend in catastrophe-related losses [3] - Frequency perils, such as severe thunderstorms, winter storms, wildfires, and inland floods, now account for two-thirds ($98 billion) of the total modeled AAL, outpacing risks from larger events by a ratio of 2 to 1 [4][5] - The report emphasizes the need for insurers to adapt their strategies to address the increasing frequency and impact of these perils [5] Regional Insights - Property exposure in Verisk-modeled countries grew by 7 percent annually from 2020 to 2024, driven by inflation and construction in high-hazard areas [11] - In Asia and Latin America, insured losses account for only 12 percent and 32 percent of economic losses, respectively, compared to 48 percent in North America, highlighting significant protection gaps [11] - The 2025 Palisades and Eaton fires in North America caused up to $65 billion in economic losses, with 60-70 percent insured, indicating high insurance penetration but escalating wildfire risk [11] Modeling Innovations - Verisk introduced new inland flood models for Malaysia, Indonesia, and Ireland, and updated models for Australia, Mexico, the UK, the U.S., and South Korea [10] - The report underscores the importance of adopting forward-looking risk models that reflect current environmental and climate realities [10]