Verisk at Bernstein Conference: Strategic Focus on Innovation

On Thursday, 29 May 2025, Verisk Analytics Inc (NASDAQ:VRSK) presented its strategic direction at the Bernstein 41st Annual Strategic Decisions Conference 2025. The company emphasized a transition towards becoming a focused insurance industry data and analytics provider. CEO Lee Scheaveau highlighted both the success of existing programs and future growth opportunities. However, challenges such as adapting to market cycles and strategic reinvestment were also discussed.

Key Takeaways

• Verisk is committed to transforming into a focused data and analytics provider for the insurance industry.
• The Core Lines Reimagine program is a centerpiece of Verisk’s strategic efforts.
• Verisk aims to balance margin expansion with reinvestment in its business.
• The company is leveraging advanced technologies like GenAI to enhance client services.
• Verisk plans to grow its international business through strategic acquisitions and investments.

Financial Results

• Consistent Revenue Growth: Verisk has maintained a stable revenue growth rate of 5% to 9%, even during economic downturns like the Global Financial Crisis and COVID-19.
• Stable End Market: The insurance industry provides a solid foundation for Verisk, with its essential nature ensuring ongoing demand for Verisk’s products.
• Premium Growth Tailwinds: Recent years’ hard market conditions have contributed to Verisk’s growth, with high single-digit premium increases.
• Margin Expansion: Between 2021 and 2024, Verisk expanded its margins by 300 to 500 basis points, but the focus is now shifting towards reinvestment.

Operational Updates

• Core Lines Reimagine: This program aims to enhance customer data and insights through new modules and frequent updates, with three years of progress already made.
• GenAI Implementation: Verisk has applied generative AI in over 40 product use cases to process unstructured data efficiently.
• Strategic Dialogues: A new client strategy team and account planning process have been established to strengthen client relationships.
• Wildfire Modeling: Verisk integrates data from California wildfires into its models, providing valuable insights for mitigation strategies.

Future Outlook

• International Growth: Verisk’s international business is expanding at a double-digit rate, driven by strategic acquisitions and local market expertise.
• Strategic Priorities: The company focuses on insurance, strategic client dialogues, and delivering strong financial results.
• Reinvestment in the Business: Verisk plans to reinvest in core operations to sustain long-term growth while maintaining operational leverage.

Q&A Highlights

• Defensive Nature: Verisk’s stable insurance market and essential products contribute to its defensive business model, even during economic crises.
• Pricing Strategy: The company prioritizes long-term relationships over aggressive pricing tactics.
• Portfolio Risk Management: Verisk is enhancing its focus on portfolio risk management, engaging more actively with chief risk officers.

In conclusion, Verisk’s presentation at the Bernstein conference provided a comprehensive overview of its strategic initiatives and financial performance. For a deeper dive into the details, readers are encouraged to refer to the full transcript.

Full transcript - Bernstein 41st Annual Strategic Decisions Conference 2025:

Kelsey Ju, Financial Information Services Analyst, Autonomous: Hi. Good morning, everyone. Thank you for joining us today. My name is Kelsey Ju. I’m the financial information services analyst at Autonomous.

With me on stage today, we have Lee Scheaveau, the CEO of Verisk, and Elizabeth Mann, who’s the CFO of Verisk. Thank you so much for joining our conference today.

Lee Scheaveau, CEO, Verisk: Thanks, Kelsey. It’s great to be here with you.

Kelsey Ju, Financial Information Services Analyst, Autonomous: So, Lee, I believe it was just officially your three year anniversary as CEO of Verisk. Congrats. We wanna hear more about, you know, sort of the changes you’ve made in the last three years and how you’re thinking about Verisk, you know, over the next few years strategically.

Lee Scheaveau, CEO, Verisk: Great. Well, thanks. And yeah. So last last Friday was my my official three year anniversary, and I have to tell you, you know, it it feels I feel a little bit more relaxed than I did when I stepped into the role because, you know, it’s terrifying when you take on those new responsibilities. But you, above all, I’m immensely proud of, the team and what we’ve accomplished over the last over the last three years because in multiple ways, it set a foundation for where we can go from here.

And so to answer your question specifically, I think the things that, we’re most, pleased with is the transition from a multi industry, oriented data and analytics company to one that has, now returned its focus just to the insurance industry was something that we had to manage through. Separating the separating the other the non insurance businesses was the first step of that, but we then also had to demonstrate what were we capable of, you know, within this context. And in that regard, the ability to redirect management’s focus and our capital to making the investments that could add value to our clients and to the industry broadly, has, been very, very clearly demonstrated from our perspective, probably most significantly with the core lines reimagine effort that we have, been rolling out to the industry. And the feedback that we’ve heard both directly from clients and indirectly from clients has been very positive in terms of the value that they’re getting at getting out of it. So, you know, that has been, a a demonstration of where we’ve been able to to demonstrate value with that effort.

The other, element that we cited at the outset was that we wanted to elevate our strategic dialogue with our clients. And that, I think, we’ve met even greater success, and faster than we would have anticipated at the outset. And I really want to, applaud the organization for embracing this and leaning into, supporting that dialogue broadly. And what we have encountered, was a real appetite on the part of our clients to give us feedback in terms of where they felt we could be doing better, which we’ve worked hard to address, but also think about where the industry is headed and what we can do to support those grow that growth. Clearly, there are, substantial emerging risks, whether it’s, increased severe weather risk in the form of wildfires or severe convective storms.

There are new, regulatory challenges, that the the industry is adjusting to. But the demand for our ability to make an investment in a dataset or an analytic or a platform that adds value to the industry is stronger than ever, and I think we have a much better communication channel with the industry to support that. So I think that’s that has been, has been very effective. And we have built out beyond that senior level dialogue a a very organized approach to focusing on our largest and most effective clients and making certain that we are communicating the value that we are and can be delivering to them. Now in the second aspect, to kinda move to, you know, where are we headed, I think the thing that we’re really excited about and have demonstrated to some extent, but I think it, is something you’ll see continue to see development in is, you know, with our centrality and our position within the data flows for the industry and the functions that they provide, our ability to be an effective network for the industry, connecting insurers and brokers and reinsurers and contractors and adjusters across multiple product lines is an opportunity that exists above and beyond the pure data and analytics element of what we’re doing.

And so we have proven that out in our property estimating solutions. We’re demonstrating that in our antifraud business, as well as in our extreme events business. And something we can we can talk about later, but I think that represents, in a lot of ways the the next gear or the next the next phase of what Verus can become.

Kelsey Ju, Financial Information Services Analyst, Autonomous: Sounds very exciting, and thanks for sharing. So one of the main priorities you mentioned just now is elevating the strategic dialogues with clients. I was just wondering, you know, how is that actually happening, you know, across different verticals in Verisk, and what type of benefits are you seeing based on these strategic dialogues you’re having with clients?

Lee Scheaveau, CEO, Verisk: Sure. Thanks, Kelsey. So, you know, it has to start, at at some contact point within our clients within the c suite. Sometimes it’s the CEO. Sometimes, it’s, the president of a the North American underwriting business.

It and but someone that has, at the at the industry, a broad view and wants to understand and develop the relationship. And so that’s something that I’ve tried to lead personally, with our with our largest accounts and feel as though we have a an active and and in in, nearly all cases, a very constructive dialogue. But that needs to then be built out, with an organization, that follows up on that and is providing a broad strategic overview of what is the where is the relationship? How are we serving them? And where are there other opportunities where we think they can create value and where do they think we can create value that supports their objectives?

And so we have built out a client strategy team and a strategic account planning process on an annual basis that allows us to more specifically target, what we are, what we’re trying to what we’re trying to accomplish within each of those. And then each of my direct reports, particularly the business unit leads, are expected to develop their own relationships. So in our claims business with a chief claims officer or on their underwriting business, the with the chief underwriting officer or extreme events with a chief risk officer. And so those relationships are then broadening out. And then the rest of the organization realizes that if there is a new product opportunity or sales opportunity, we can coordinate across that relationship, to make sure that we’re we’re communicating the value and the opportunity effectively.

So that’s how we’ve tried to build it out. It’s been complemented by a third party assessment, a consulting assessment that looked at our go to market strategy. And within each of our businesses, how can we optimize or improve a variety of either sales territories, pricing pricing strategies, incentive systems, to optimize each of those as well as tie it into the overall broader strategy. So, we’re we’re thrilled with the results that we’ve seen so far, and I think we can continue to extend that deeper and more broadly in the organization.

Kelsey Ju, Financial Information Services Analyst, Autonomous: Got it. That’s super helpful. Another theme that I think comes up a lot is invention. You’ve certainly mentioned that in your recent earnings calls. I’ve also seen that mentioning a few times in your letter to the shareholders in the annual report.

So maybe just talk to us a little bit more about what you mean by invention and how you’re tackling

Lee Scheaveau, CEO, Verisk: Thank you. Piece. And and, Kelsey, you know, there can be, you know, subtle semantic differences between innovation, and and invention. And the use of invention is is quite purposeful. You know, there is a a strategic framework that I’m sure, you know, more than a few people in the audience have heard.

It’s called the seven powers, foundation. And, you know, within that, they talk about the powers that tend to drive significant value creation within enterprises, and, you know, including things like scale power, network network power, process power. And after having defined those, you know, one of the statements of the book is that, you know, power derives from invention, creating a new solution for, an existing market market need. And it was an important differentiation, for us because as a product company, a focus on and I’ll and I’ll use the the term innovation in this context as being incremental change, in, in improving that product, adding a new feature. And you could say, well, if you’re innovating, you’re you’re kind of inventing, but I’m just creating a distinction where I think a lot of our focus had been on that innovation aspect.

How do we it’s important, how do we continue to add more value in the clients that we’ve had? Corelines Reimagine is an example of where we’ve been able to provide a more digitized, dataset or analytic that can be ingested by our clients more effectively, But where can we solve a new solution for our clients? And we have done that effectively in a variety of ways. Sometimes it’s within the business unit. Sometimes it’s across the business unit where we’re tying underwriting data and claims data, to provide a richer analytic or addressing a new element.

Or sometimes it’s through an acquisition that brings a new skill set, as we did with a a low, no code, policy management system designed for the life insurances, business that we, are working to see and evaluate its applicability to the property and property and casualty insurance element. So that’s the way we define it. And, we have been working with a team of my direct reports to identify how have we pursued invention in the past and what can we do to improve that and expand it and make it more effective within the organization.

Kelsey Ju, Financial Information Services Analyst, Autonomous: Got it. And speaking of invention and innovation in general, I think it’s important to talk about your GenAI strategy as well as, you know, how you leverage other advanced technologies. And maybe just broadly talk to us about, you know, how you see the threats and opportunities brought by GenAI and other advanced technologies.

Lee Scheaveau, CEO, Verisk: Certainly. It’s and I it’s it’s been a, an important topic, and a very a very popular topic. And I’m gonna try to put it in the context of, its applicability and and reception within the within the insurance industry. The you know, first of all, let’s, you know, start with GenAI. It is a it is a predictive, an analytic and a predictive, artificial intelligence.

And I make that point because, it is something that pre creates value, by identifying what the most likely outcome is, but it operates within specific parameters that don’t provide a definitive a definitive response. That’s part of its value and its power. And so we have worked across the enterprise to find applications, for it. Probably the most direct, beyond utilizing it to generate code is in processing large amounts of data and information that is often in an unstructured format to provide summaries, that accelerate the capabilities of a a medical professional, or an insurance professional in, rather than spending a lot of time gathering that information and correlating it or integrating it, to to to giving them more usable data faster. So that’s been a direct app a direct application.

And we have developed that developed those applications within each of our business units. At last count, I think we’ve talked about this on our earnings calls, we have over 40 specific product use cases where we have, implemented generative AI as an additional, feature. To move beyond, the example that I gave you, a lot of what we, have provided to contractors and adjusters have been materials costs and labors costs to estimate, the cost of a potential insurance settlement. We’ve utilized AI trained upon past claims, to make recommendations to a claims professional or an adjuster on questions that they should be asking to to more accurately predict the nature of that of that of that cost or that or that claim. So that’s an example.

The, one thing that we’ve done is we’ve tried to share effectively information on generative AI applications across the organization. We had a gen a Gen AI day a couple months ago where all of the the, our chief analytics officers and data officers within the organization came together to review their use cases, and we find that that sharing activity is incredibly incredibly valuable. And then we engage with our clients to demonstrate what we’ve been able to do because our our function, I think, is defined by, you know, one of our our one of our the investors we met with, earlier today. He said, Lee, you know, is it would it be fair to consider Verisk in some ways the research and development arm for the insurance industry? And I I I think that was a a very accurate assessment.

So our ability to develop that, you know, at a in a much more efficient way for the industry as a means means to do that. So that’s the way we’re thinking about generative AI. But I also wanna put in context, and I’ve challenged our technology team to say, you know, we we we can’t ignore other developing technologies that we think might have relevance to the insurance industry. And if we’re focused on analytical outcomes, we also make need to make sure that we’re not ignoring those connectivity or those network opportunities, where we can create value or other emerging technologies like, you know, cognitive artificial intelligence models that are that produce more determinative outcomes in underwriting scenarios or risk assessment scenarios. So we continue to look broadly across the the technology and particularly the AI environment to find, where we can create the most value for the industry.

Kelsey Ju, Financial Information Services Analyst, Autonomous: Got it. And just out of curiosity, is GenAI an important part of your strategic dialogues with clients? Because when I think about the insurance industries, maybe, like, advanced technology isn’t the first thing So maybe just talk us through your thinking behind your investment there.

Lee Scheaveau, CEO, Verisk: Yeah. I would say it’s it it is a topic of interest and exploration. I wouldn’t say that it is the most important element of our strategic dialogue with clients. And, you know, one industry participant, you know, ex explained to me or, you know, offered the perspective, look. If you’re an insurance underwriter, your job is to think about everything that could go potent go potentially wrong, within that within that risk.

There tends to be an orientation, more towards or what are the bad things that could happen, relative to the good things that could happen. And I think it characterized it characterizes technology adoption across the industry. One of the positives is that I think as we see generational change within insure the insurance industry management, we’re seeing more receptivity to technology, and that’s accelerated our dialogue with a a a lot of clients. So it is a component, but I think the more important component is regardless of the technology, how can we leverage data, or platforms to find more efficiencies so that we can do what we’re doing better, faster, and and less expensively than we have in the past.

Kelsey Ju, Financial Information Services Analyst, Autonomous: Got it. Super helpful. One of the things that consistently impressed me about Verisk is that it is one of the most consistent growth deliverer in within info services. I think Verisk in general grows within a tight band of five to 9%. Even in the market downturn during the GFC, during COVID, I think your insurance business still delivered 5% growth.

So maybe just talk to us a little bit more about what makes Verisk so defensive that’s able to deliver 5% revenue growth in the market downturn. Great.

Lee Scheaveau, CEO, Verisk: And, Kelsey, it’s a great opportunity for me to bring Elizabeth into the conversation as she articulates it from a from a financial perspective.

Elizabeth Mann, CFO, Verisk: Thanks thanks a bunch for the question, Kelsey, and thanks thanks for having us here. Yes. It is it is one of the things that we are very proud of at at Verisk, the the consistency and, you know, predictability of that of that revenue growth, I think it comes from two factors. First first of all, the insurance industry itself is a fairly stable end market. It is a necessary product for individuals and businesses and and for, you know, the the society as a whole.

So we’re we’re working already in a fairly stable end market, but more importantly, the the core of our products are really tremendously important to our to our clients. For for some of our products, it would be almost impossible for them to to do business, at least nearly as efficiently without without our data and and analytics. So that and the fact that we have, you know, long term contracts with them enable enable us to maintain that consistency even during a year of COVID or or the great financial crisis.

Kelsey Ju, Financial Information Services Analyst, Autonomous: Got it. It is a fairly stable end market, but it does go through cycles. So maybe it’s it’s a great opportunity for us to talk about where we are in that P and C insurance industry cycle. And as we eventually transition from hard to soft markets, how are you thinking about the impact of that on your ability to raise prices, ability to cross sell initiatives, and and so on?

Elizabeth Mann, CFO, Verisk: Yeah. Happy happy to talk about that. Yes. You’re right. The the insurance industry does go through cycles of of varying premium growth.

We are we are now several years into sort of a hard market for the insurance industry, meaning premium growth has been relatively high. It’s grown high single digits for the past several years, really starting in about 2021 or ’22. That has been that has been in some ways a tailwind for growth for us as we many of our relationships with our customers are based on the premise that our business will grow as their business grows. So there can be a premium linkage or a premium input into our into our pricing conversation. So that has been that has been a benefit to us over the last several years.

I think one of the most important points is that we have been also continuing to emphasize the value that we’re delivering to our to our clients and making sure that the benefits that they’re seeing is is not just tied to the premium, but the value that they’re driving and the increased efficiency that they’re driving in other places by using our core products, not to mention the additional products that we can continue to sell to them. So that is how we are building, you know, building our business for the long term, to continue to grow with our clients. And we’ve you know, the history will show that we did continue to deliver that growth in both hard cycles and soft softer cycles in the insurance industry historically. So that’s our our goal to continue to do that.

Lee Scheaveau, CEO, Verisk: And if I can if I can add to that, Kelsey, so the, you know, the insurance cycle is something that we have have been through a hard market, soft market, cycle. There is a, the factor that in hard markets, there’s, more of a tendency to focus on revenue growth, within within that from our from our clients. So they want to optimize that. And so we tend to, to shift to finding ways that they can underwrite more business more effectively, price the risk effectively. You know, in a softer market when they are feeling more profit pressure, then we have then the focus shifts to how can we operate more efficiently.

And so there is, typically a a shift in where their focus is. The good news is that we support them on both sides of that equation. And so that, will enable us, to be able to change the dialogue around, the product sets that we have to offer them. And then regardless of the cycle, and and to your point, if you look at that consistent growth rate within that range, the reason another element that that’s so stable is that the growth reflects, while at at some level overall industry growth, but the primary driver has been the increasing adoption of data and technology over time by the industry to make them more efficient and better at what they do. We’ve often talked about that our revenues relative to overall industry net written premium, you know, are on the 35 to 40 basis point level.

And that has that has grown, and we expect that to continue to grow as, the industry becomes more digitized and is utilizing more technology across a broad range of their functions from underwriting claims and risk management.

Kelsey Ju, Financial Information Services Analyst, Autonomous: Got it. I think one of the main events that happened earlier this year is the California wildfires. And just curious to get your perspective on, are you seeing any major impact or disruption to the insurance industry? Are carriers exiting the state or consolidating or reducing their exposure to the state? And what do you think the overall impact is on Verisk?

Lee Scheaveau, CEO, Verisk: So I I first, I would say the, the overall impact on Verisk, is is negligible, you know, with regard to that event in terms of, you know, near term, any near term negative consequences. One, because in our property estimating solution business, where we have seen some weather sensitivity when there is a sick significant, hurricane or severe convective storm that causes damages to homes. It’s it’s typically partial damage, and so that generates repair act repair claim activity. And that’s where we get involved. And if there’s a high volume of those, it will tend to have up a, a positive impact on that.

Wildfires tend to be, complete loss scenarios. And in that scenario, the insurance company is just validating and and and paying out the paying out the claim. And I think that’s generally been the, been the case. So specific to the to the business itself, there’s not an impact. However, I I do think, that the California wild, wildfires, have been an important, learning point, for the industry and for the state on the growing level of risk, that geographies are facing.

It certainly made painfully and tragically, real, the consequences of concentrated development in areas with changing risk risk parameters and the importance for local governments, to be thinking about what mitigation strategies they can deploy. And this isn’t a question of, the Pacific Palisades fire department capabilities. No fire department is designed or any system is designed to handle, a a fire of that intensity and that breadth. You know, what is well suited, to helping mitigate that are building codes that recognize, the protections that are necessary, to limit wildfire wildfire spread. And so we build, we have a wildfire model.

It was the the one of the first to be submitted California Department of Insurance, and we have scientists, that are on the ground, structural engineers that have been evaluating the wildfires to determine what we have learned about it. And we’ve learned a couple a couple things. 80% of the homes that were built of noncombustible materials survived. 80% of the foam homes that were not built or that were built of combustible materials were completely destroyed. Fencing, was a critical factor, because it served as both a propagand of the fires as well as, a typically very dry and inflammable fuel source that because of its its linear nature tends to expand it.

So we are integrating those into our models, but also we you know, many investors may not be aware. We also have a building code effectiveness survey that is used by the industry. So making certain that we’re identifying where communities can improve their building code effectiveness to mitigate loss is a benefit to individuals. It’s a benefit to those municipalities and to insurance companies. So that’s one very physical dimension.

But the other important learning here is that and you were asking the questions about, insurers leaving the, leaving the state. California, up until recently, did not allow the use of forward looking models as a basis for pricing increases. And and so insurers could only look to historical levels for pricing, and there was the natural resistant to those pricing increases in, in spite of, from our perspective, clearly increasing risk within those markets. So we think California has taken a step in the right in the right direction, but a lot of insurers had been reducing their exposure because of those increasing risks and, importantly, their inability to to get appropriate pricing for that risk. We have seen, I think, some settlements with some of the some of the carriers or resolution of those pricing issues within California, but I think it’s a lesson to certainly California and the rest of the country that we need robust markets where insurers can receive adequate adequate premiums to cover risks in rapidly evolving, in a rapidly evolving, environment with increased building and increased exposures.

Kelsey Ju, Financial Information Services Analyst, Autonomous: Does the wildfire have a significant impact on the industry’s profitability? And in general, just how are you thinking through the increase or decrease in profitability for carriers and how that affects Verisk? So,

Lee Scheaveau, CEO, Verisk: certainly, if you look at the the recent earnings announcements, almost all of the carriers, certainly those that have, significant homeowners exposure, have taken some level of hit relative to the, to the California to the, LA wildfires. The great thing about the industry is that it learns, it adjusts, it makes, adjustments in pricing, and it’s designed to absorb those. So, there is a a near term impact, but, the industry has demonstrated, the resilience and the ability, to absorb this. It will have an impact, on homeowners’ property rates within the within these areas as new information is factored in. And I I certainly don’t think that this represents a a material risk to the insurance industry broadly or even within California, provided that the California insurance market, learns from it and adapts and continues to attract more capital into that into that marketplace.

And consequently, as I said at the outset, we don’t see a long term negative impact. We do think that it is an opportunity for us, you know, in the products that we offer, whether it’s the wildfire models or the building code or community risk assessment, that we have to engage, more actively with both regulators and municipalities to help them manage the risk and to, frankly, support the economic growth that is represented by the housing markets within each of within each of those municipalities.

Kelsey Ju, Financial Information Services Analyst, Autonomous: Got it. Super helpful. I think Verisk is such an important partner, for insurance carriers in terms of data and analytics services. So just curious to get your perspective on what are some of the new and emerging areas in insurance data analytics that carriers are really investing into today, and how is Verisk positioned within those new growth verticals?

Lee Scheaveau, CEO, Verisk: Certainly. Great, great question. The one area that I would, that I’d focus on, there there are, you know, number of, number of opportunities that, that come to mind. One, is the desire, to manage, their portfolio of risks, more actively. And if we think you know, traditionally, our focus has been providing data and analytics to the chief underwriting officer, in underwriting a underwriting a risk, providing loss costs, providing, policies, standardized, policies to serve as a basis for those, underwriting rules that direct that that element.

And so that’s a very specific function. But once that risk is on the books, then we historically would not have been involved in it. But one thing that we’ve observed through our conversations with clients is a more active management, through a variety of reinsurance or retrocession or active sale of of portfolios of risks, to manage that. And so that becomes, the province of the chief risk officer. So one of our opportunities is building a more active dialogue with the portfolio risk manager.

Now the interesting connection is that reinsurers who we have served for a long time manage very complex portfolios of risk. And so, we have been working to adapt the technology and the platforms that our reinsurers use, across, millions of specific property locations, you know, to the needs of officer. And a lot of the investment that we’re making in a product, that you’ve heard us talk about called Synergy Studio is designed to provide that broader enterprise portfolio risk, not just to the reinsurers, but to the the insurers as a as a component of that. So that’s an example of where, we’re looking to serve, to serve a different functionality within the insurance industry. The other element that we’re excited about and have had great success, within The UK has been a more digital connection between the broker or the agent and the underwriter within the specialty market.

And so we’ve talked about our white space platform, which provides a common platform for a broker and underwriter to define customized forms for individual business that automates the ability, for an underwriter to take a submission from a broker, identify is all of the information that I need there, does it meet our risk parameters before it goes to an underwriter to evaluate is this something that we that we want to underwrite, and, the follow on building of a syndicate to support that support that risk. So we’ve had great success of that in The UK. And given that, the the value that both brokers and carriers have realized from that, the ability to bring that to a broader global, global application within The US, is another area that we think has a lot of promise for us.

Kelsey Ju, Financial Information Services Analyst, Autonomous: Got it. Super helpful. Let’s talk about some of the product categories that Verisk has. I would say the bread and butter is really the forms Ruth’s lost cost business, and you have been talking about the Core Lines reimagined program for a couple of years now. So just curious to hear an update on where we are in that Core Lines reimagined program, What kind of benefits are you seeing currently?

And does that has that already helped you increase customer retention or help with your pricing conversations?

Lee Scheaveau, CEO, Verisk: Excellent. I’m gonna I’m gonna turn that over to Elizabeth to address.

Elizabeth Mann, CFO, Verisk: Yeah. Thanks thanks very much. So Core Lines Reimagine is our investment program in forms, rules, and loss cost, which is our our largest business and our business that goes back to the ISO contribution, contributory database that provides those lost costs and policy language to the carriers. We it’s been a five year program. We’re about about three, three plus years into it now, so we’re well on the on the way of kind of customers seeing and experiencing the benefit of it.

One important thing to know about this program, it’s not it’s not kind of one one change from the old to the new. It is a series of a a number of different modules that is improving both the data and the insights that’s available to customers, making the data that they get more current and more more frequent updates, and really and providing insights and not just kind of data. So all of all of those things have been invested in. We’ve invested in the core platform where they can access it. Last year, we introduced 20 new modules, and we we talk about these kind of one by one or we highlight certain ones of them on our earnings call.

But, yes, it absolutely has improved, you know, not not just retention, definitely helped on the pricing side as customers really see and experience the value and the efficiency they get from better working with our content. It also has improved actually data contribution to us. As customers have seen the values of some of the products that have come out, they’ve come to us and and looked to contribute more data. So we view it as really enriching and enhancing not just our core business, but even, you know, enhancing that network element that that Lee had talked about. Got it.

You know, one question I’ve always had on forms through its lost cause is, obviously, Verisk has very strong market positioning in this product. And as I

Kelsey Ju, Financial Information Services Analyst, Autonomous: think through, you know, my other coverage companies and how they’ve really raised prices when they have very strong market positioning in certain products. Comparing to some of the other companies, I would say various price hikes and forms through loss costs have been more modest. So just curious, you know, why haven’t you raised more prices in forms through this loss cost, especially in a hard market environment?

Elizabeth Mann, CFO, Verisk: Yeah. I I think it’s fair to say we we could be more aggressive on pricing, and we we choose not to be to to, you know, to hit the maximum on the aggressiveness scale. Part of that is we really view it as a long term relationship with the industry, and we are building to grow with them for the long term and the sustainability. And in a way, this actually connects back to your earlier question on the the consistency of our of our revenue growth. And in a way, that that that cuts both ways.

The the consistency and stability of our price increases have enabled us to continue to grow through many softer cycles, whether in the insurance industry or macroeconomically. But part of that is is part of the understanding in the industry that it it is a more consistent and continuous growing relationship. Got it. Extreme Event Solutions,

Kelsey Ju, Financial Information Services Analyst, Autonomous: which is one of the fastest growing areas for Verisk. So, Lee, I think you mentioned the Verisk Synergy Studio or and and as an answer to an early part of the questions, just curious to hear your thoughts around the changes you’re making with Verisk Synergy Studio and why this is a key area of investment for Verisk overall.

Lee Scheaveau, CEO, Verisk: Sure. And I I it’s actually an opportunity, Kelsey, which I appreciate to go back to the core value element and the growth growth opportunity, for extreme events. One thing that we heard from clients, was what was most important to them was that the scientific rigor and the quality of our underlying models, whether it was a hurricane model in The US or a wildfire model or a typhoon model in Asia, our clients really value, our ability to bring the best scientific, engineering, predictive expertise, to that model. And that was one of the learnings that we got out of our our go to market evaluation where, we had outreach to clients to understand what they valued and how they, they thought about our relationship and our product. And so, it’s important to emphasize that while, we are investing in expanding that, we need to make certain that we’re maintaining, leadership in model quality first.

And then there is a natural expansion, opportunity for us in new perils and new geographies. And, that needs to be founded on not rushing out as many as models as possible, but making certain that we’re bringing our best our best expertise to build that model so that our clients will rely on it. So that’s the starting point. You know, the the corollary is in our Corelines reimagine product. We need to make certain that data quality is the starting point and data currency that Elizabeth talked to.

You know, how do we make sure that we’re expanding that dataset, making it, more relevant and more current? The models are the equivalent in in extreme events. And then having established that, then how do we, build on that to tie those models together and apply them across a portfolio of exposures so that a risk manager or a reinsurer can have a much more sophisticated and integrated way to evaluate that portfolio of of risk. And it and it involves millions of data points, because of, the very, complex and distributed portfolios that they are managing. That transition, because of their reliance and understanding of our approach to risk, is something that has to be managed very carefully, and very gradually.

That’s why, the rollout has a very clearly defined plan of what our clients can expect, when it’s going to occur. It’s a rollout that begins in 2026. We’re describing what we, can accomplish with, Verisk Synergy Studio and got a great reception at our Verisk Insurance Conference recently in Orlando. High degree of interest, but what I heard repeat repeatedly from clients is make certain that you go through that transition carefully, because, you know, if you don’t, it’s going to be it’s gonna be very disruptive to us. So we’re excited about the opportunity.

We don’t wanna get investors too excited about it because it is, a gradual process, but one that we think is going to be immensely additive, to the value that we’re able to provide and our ability to expand a network element within our our servicing of that community.

Kelsey Ju, Financial Information Services Analyst, Autonomous: Got it. Super helpful. I think, you know, thinking about new growth factors, you know, marketing, life insurance, and international business, in your last Investor Day, you did outline targets to achieve double digit growth in those areas. So maybe just give us an update on how you’re stacking up against that Investor Day target.

Lee Scheaveau, CEO, Verisk: And I’m I’m gonna a natural thing for Elizabeth to address, but, you know, one of the things that we established at Investor Day, was, in addition to insurance focused, and elevating the strategic dialogue was a focus on delivering delivering results. And your question goes directly directly to that. You know, overall, we’re really happy, with the progress we’ve made. I think we have, you know, in, across the enterprise, we have outperformed kind of the midpoints of all of those targets, whether it’s revenue growth or EBITDA growth, or or margin. But, of course, it’s a mix of mix of businesses, and you’re always going to have have varied results.

But, you know, across the board, you don’t expect for expect perfection, but we’ve had more more successes than than challenges on that.

Elizabeth Mann, CFO, Verisk: Yeah. With with with that with that intro, you know, I I think we’ve been open about the fact that our marketing business has had some headwinds over those over those couple years. You know, in the in the early part of of that three year cycle, the insurance industry was still experiencing profitability challenges and had cut back on marketing spend to address that. We’re now more in an environment where the insurance business is ramping back up on marketing and that the insurance component of that business is doing well. But we had it was a business that we had acquired through acquisition, and so not all of their insurance customers, and those segments are still experiencing marketing headwinds.

So that business has not achieved the goal that we set. But the other two areas that you highlighted, our life insurance business continues to achieve those goals to do very well. We highlighted at the Investor Day that this was a great example of an acquisition that we found surfing the life insurance industry. It’s a SaaS platform for policy administration workflow in the life insurance industry. As a small start up, when we acquired it, it was growing kind of mid single digits despite having a great product.

They were having a hard time making headway with the very long term insure long term focused life insurance players who are having a hard time committing a mission critical platform to a small venture backed company. Given the Verisk name and the Verisk strength supporting it, we’ve had a a very strong rate of customer adoption and continue to deliver well in that in that double digit range. And our international businesses have continued to scale across the portfolio. We’ve our claims businesses that we’ve acquired a number of businesses in Germany and are integrating into an end to end claims management workflow has has grown double digits on an organic basis, you know, building on those acquisitions. And and our specialty business solutions business facing the London market and driven by the strength of that network business with the white space platform has also continued to to deliver strongly on that on that objective.

Lee Scheaveau, CEO, Verisk: And and maybe to to kinda well, wanted to provide that specific, the specific review as you as you had asked about, Kelsey. It’s also a good opportunity to think about the layers, of contribution to growth within our within our business. And, you know, start at the base level of those core established products where you have, at a at a base level, you know, basic economic growth or growth in net written premium, that provides a consistent base. And then we are, as with Coreline’s reimagine, investing in improving the value that our clients extract from that. We’ve heard that clearly from them.

So that provides a a lift. And I think, you know, the combination of those, activities are probably three to 5%. I think when we’ve we’ve talked about the components of the growth. And then, the ability to expand the number of products that has been, I think, accelerated by a higher level of client engagement, it typically adds another one to 2% to that to that element as we’re able to expand the uptake of our of our clients. And then the third element is one to 2% that comes from these higher growth businesses that are are generally double double digit growers, but they’re smaller proportionally.

But that higher growth, you know, adds an incremental one or 2% to the to the overall growth rate. So it’s the combination of all of those, but we’re starting from a very solid base from our position, demonstrating enhanced value that we’re capturing through, through pricing and looking for those penetration opportunities, where, our sponsorship and our investment can accelerate the growth.

Kelsey Ju, Financial Information Services Analyst, Autonomous: Super helpful. I think speaking of the international business, your recent acquisitions have been mostly outside of The US. So just curious to hear more about your broader international strategy and how m and a really fits into that whole picture.

Lee Scheaveau, CEO, Verisk: Yep. So, with regard to the international strategy, it’s been and something that we’ve been pleased with the, the growth levels that we’ve been able to achieve. It’s it’s been consistently a double double digit grower for us, and it’s largely been developed, at the outset in building a base, through acquisitions. Because developing access and understanding that local insurance market structure is more challenging to to develop that. You know, you know, Verisk emerged from a an industry utility that was formed by that formed by that industry.

You know, it’s hard to achieve that de novo within the within those markets, and and certainly for, a foreign company that is entering that market. So our approach has been looking for businesses that we think have very similar characteristics, strong growth rates, delivering value to the clients, and bringing local market knowledge. I think our position in The UK, has been a function of, putting, building, and learning from businesses that we’ve acquired there, finding connectivity between a number of them, and building a more substantial presence. So I think acquisitions will continue to be a component, but to which we add our own internal investment in those, in those companies to expand their capabilities or accelerate their penetration or integrating even some of our data sets and expertise into what we’re doing.

Kelsey Ju, Financial Information Services Analyst, Autonomous: Got it. I think we talked about a lot of exciting new products, investment areas, so on and so forth. And in general, I just wanna get your thoughts around how do you really balance, you know, margin expansion versus investment or reinvestment into the business.

Elizabeth Mann, CFO, Verisk: Yeah. We we think about we think about that balance very frequently between between, you know, efficiency and and margin expansion versus versus investment and long term growth. We have we have just completed a cycle, a a commitment that we made in in 2021. We made a commitment to expand the margins by 300 to 500 basis points, and we just achieved that and finished that in 2024. So we expanded margins by well over a hundred basis points per year.

And that that goes to show, I think, the the efficiency potential of the of the core business. Having achieved that that target, we continue to see operating leverage in the core business, but we don’t necessarily feel the priority to expand margins at that significant rate of over a hundred basis points per year. So we think we can continue to deliver margin expansion, but maybe at a at a slightly less rate than that in order to provide more capability to reinvest in the in the core business and continue to extend the long term sustainability of that of that growth rate. I I’d like to add, you know, even when we were expanding margins 100 basis points a year, we were also funding significant investments in the business. All of the core lines reimagined that we talked about was funded in that time.

A lot of the work on Verisk Energy Studio was so we were funding investment even during that time through self funding of it, and so we think we can continue to do to do that and maintain operating leverage and invest in long term sustainability.

Lee Scheaveau, CEO, Verisk: You know, one metaphor that I like to use, is, you know, all companies are, to some extent, economic engines. And and certainly, we feel that way about at Verisk. And the the economic engine is your ability to to generate profitability. And so margin is is certainly one way to evaluate that. It might be the tachometer for for most companies.

Return on invested capital is another way to manage that that that energy or that economic energy. And, you know, our focus then is how do we then apply that energy, you know, to speed and distance. And so you can apply it to acceleration. You can apply it to kinda sustaining that. I think our we recognize that while margin is an important barometer of of the health of our business, it also represents our ability to invest in sustaining and accelerating that growth over time.

The reason I I use that analogy is that, you know, that operating leverage will continue to express itself in, in margin strength. And we have to make the decision in how we are going to apply that into, I think, what we think is most determinative of our value creation over time, which is the sustaining, sustaining and compounding, revenue and profitability growth, over the course of time. That’s certainly what has gotten us to this point. We think it continues to be a very relevant, formula for our ongoing value creation.

Kelsey Ju, Financial Information Services Analyst, Autonomous: Got it. I know we’re running out of time. Maybe just one last question from me on capital allocation. Maybe talk about your thoughts around, you know, the different priorities between the m and a’s, the shared buybacks, the dividends, debt prepayments, things like that?

Lee Scheaveau, CEO, Verisk: Yep. So our our top priority is always where can we generate the strongest return on invested capital within the within the business. If it’s we’re talking about capital, it’s about returns. We have received a lot of support from our investors on organic organic investment, because we generate extremely high returns on capital when we find those opportunities, and we wanna press the organization to continue to look for ways to build that. Again, the dynamic is we make an investment in that data analytic or platform, and we can leverage it across an industry.

You know, the second element is where, can we, generate a good return by, through an acquisition that we can enhance value by accelerating its adoption or improving its efficiency or capability within within that. And you have seen us, make a a couple small acquisitions, and so we’re looking for areas where we can do that and it’s additive to the overall business. If those returns aren’t available to us in in either case, then we’ve also demonstrated that we will return that capital to shareholders in the form of share repurchases or dividends, and we try to balance our dividend growth, against efficient capital, capital returns.

Kelsey Ju, Financial Information Services Analyst, Autonomous: Got it. Thank you so much for sharing with us today. Really helpful. Really appreciate all of your insights, and thanks everyone for joining us today.

Lee Scheaveau, CEO, Verisk: Right. Thank you.

Elizabeth Mann, CFO, Verisk: Thank you.

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