Hi Mike,
in this case you should adopt the connector policy to make the criteria for "similar alarm" more generic.
It looks like your policy creates a new id for every alarm, and thus you see all of them as new ones, rather than updates to already existing alarms.
The MdrElementID of the Alarm is the key for this. It has to be constructed to avoid the problem you mention.
Thus, don't use unique numbers or the complete message as ID, but something that makes it sufficiently unique to not merge with "different" alarms, but to still map to the same alarm when an update comes.
And related to this:
Why don't you use the GA Connector for UIM?
MichaelBoehm