Verisk Analytics, Inc. · NASDAQ:VRSK
Verisk Analytics — Investor Day (March 2015)
90 slides from Verisk Analytics's investor day presentation, Mar 5, 2015
Slide 1: Investor Day 2015
Investor Day 2015 March 5, 2015 1
Slide 2: Forward Looking Statements, Safe Harbor & Non-GAAP Financial Measures
Forward Looking Statements, Safe Harbor & Non-GAAP Financial Measures Forward-Looking Statements This presentation contains forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties, and other factors th
Slide 3: Business Review and Strategy Discussion
Business Review and Strategy Discussion 3
Slide 4: Who We Are
Who We Are Data/Analytic Mindset 1. n+1 Data Set (proprietary) 2. Analytic Differentiation 3. Leader in the Market as a Development Partner 4. Excellence at ETL 5. Excellent Consumability/Visualization of Content 6. Demonstrated Value in Use Paths to Data/Analytic Solutions Multiple Thick Verticals,
Slide 5: Long-Cycle Innovation Requires Close, Careful Management of Investment and Process
Long-Cycle Innovation Requires Close, Careful Management of Investment and Process Company Yrs to $20M Rev Margin at $20M AIR 13 30% Xactware 15 15% Argus 12 40% Analog A 10 20% Analog B 10 5% Analog C 11 <20% Analog D 7 10% Analog E 10 25% 5
Slide 6: Our Generalized Innovation Model
Our Generalized Innovation Model Re-Platform Invent Commercialize 6
Slide 7: Advantaged Thinking in Data/Analytics Space
Advantaged Thinking in Data/Analytics Space • Inductive and Deductive • Invent in Collaboration with an Engaged Customer and Get to Revenue Fast • Commercialize in Innovative Ways • Customize • Repurpose • Add Data • Add Analytics • Re-Platform after Commercial Innovation • Repeat 7
Slide 8: Disciplined and Shareholder-Oriented Capital Allocation
Disciplined and Shareholder-Oriented Capital Allocation 9.4% organic revenue growth 46.6% EBITDA margins* • Acquired Inovatus, Dart, and Maplecroft • Divested Interthinx $500 million accelerated share repurchase *Excludes $6.9 million FTC-related costs and $4.8 million RA reorganization costs 8
Slide 9: Acquisition Mapping
Acquisition Mapping • We must proceed with a clear sense of our criteria ….. • We must remain strategic in M&A, and • Some of the best acquisition targets aren’t specifically looking to sell themselves • A $20M revenue, vertical data/analytic company is hard to spot from a distance • Our customers a
Slide 10: Our Team is Strengthening
Our Team is Strengthening • New Responsibilities for Internally Groomed Leaders – IPAS – 3E – Verisk Health COO – Risk and Compliance Group • Verisk Leadership Institute • Accelerating Employee Engagement • Key Senior Hires from Industry • Focused Campus Recruiting to the Data/Analytic Profile – for
Slide 11: Our Capabilities Are Expanding
Our Capabilities Are Expanding • Joint Development Environment – “Analytic Sandbox” • Power Data Centers • Automated Image Processing • Solution Re-Platforming – e.g. CAT Modeling – e.g. P&C Claims Fraud Fighting • Broader Set of Risk Modalities • Risk and Compliance Group 11
Slide 12: Continuous Improvement 2014
Continuous Improvement 2014 • Uptime Improvements • Entity Resolution within and across Verticals • Talent Realignment at IPAS • Digital Engagement with Customers • Verisk Health Retrieval and Coding Efficiency 12
Slide 13: Serve Add Value Innovate
We do things The Verisk Way because we want our customers, colleagues, shareholders, and communities to flourish Serve Add Value Innovate www.verisk.com/veriskway 13
Slide 14: Business Review and Strategy Discussion
Business Review and Strategy Discussion 14
Slide 15: P&C Insurance Solutions
P&C Insurance Solutions G& verisk SERVE | ADD VALUE | INNOVATE © Analytics
Slide 16: Verisk and Property & Casualty Industry Growth
Verisk and Property & Casualty Industry Growth $1,400 $1,200 8.6% CAGR $1,000 $800 1.8% CAGR $600 2014 estimate $400 $200 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Verisk Insurance Revenue ($ millions) P&C Industry DWP ($ billions) Verisk revenue: Highly recurring and predictable (~83% su
Slide 17: Property & Casualty Insurance Quick Facts
Property & Casualty Insurance Quick Facts P&C 2014 Direct 1. U.S. property & casualty insurance Written Premium market is largest in the world at ~$570B of annual premiums • Top 100 insurers represented ~85% of total 2014 premiums 2. Claims and claim settlement ~$570B expenses (COGS for insurers) am
Slide 18: Property & Casualty Industry Landscape
Property & Casualty Industry Landscape Key Issues for Insurers • Competitive pressure and influx of capital continue to drive down rates • Economic growth not at a level to drive meaningful growth • Predictive modeling and analytic tools needed to drive profitable growth • Streamlining quoting and u
Slide 19: Building on Our Unique Heritage
Building on Our Unique Heritage Primary Solutions for the Insurance Life Cycle ISO was formed as an industry consortium in 1971 Expansion of solution sets to complement valuable core Verisk Insurance Solutions brand introduced in 2010 Verisk Underwriting Solutions formed in 2012 Product Risk Actuari
Slide 20: Actuarial Analysis: Industry Standard
Actuarial Analysis: Industry Standard Advisory Information Loss Costs Rules Policy Language Advisory cost information Classification and rating rules ISO policy language in 26 based on line, class, (the commercial insurance lines (13,000 forms) occupancy, etc. (created and personal lines manuals) in
Slide 21: Actuarial Analysis: Homeowners
Actuarial Analysis: Homeowners ~$83B in Direct Written Premium Multi-peril policy By-peril analysis Building characteristics language is key to profitability determine risk profile Verisk-Provided Profitability Tools Regulatory approved policy language Advisory loss costs Classification and rating r
Slide 22: By-peril rating has proven to enhance insurer market share and profitability
By-peril rating has proven to enhance insurer market share and profitability 25 insurers using by-peril plans have Companies rating by-peril have loss increased market share from 28% to ratios 4.3 points lower than their 34% in 6 years competition (70.8% vs. 75.1%) 2007 to 2013 Market Share of By-Pe
Slide 23: By-peril rating informed by building characteristics results in highly granular rating factors
By-peril rating informed by building characteristics results in highly granular rating factors Base All-Peril Loss Cost = $769 3,000 sq foot, 4 bed, 3.5 bath, colonial, 2,500 sq foot, 3 bed, 2.0 bath, ranch, brick exterior, attached 2 car garage, same zip wood siding, 2 car carport, pool, same zip c
Slide 24: By-peril rating informed by building characteristics results in highly granular rating factors
By-peril rating informed by building characteristics results in highly granular rating factors Base All-Peril Loss Cost = $769 3,000 sq foot, 4 bed, 3.5 bath, colonial, 2,500 sq foot, 3 bed, 2.0 bath, ranch, brick exterior, attached 2 car garage, same zip wood siding, 2 car carport, pool, same zip c
Slide 25: By-peril rating informed by building characteristics results in highly granular rating factors
By-peril rating informed by building characteristics results in highly granular rating factors Base All-Peril Loss Cost = $769 3,000 sq foot, 4 bed, 3.5 bath, colonial, 2,500 sq foot, 3 bed, 2.0 bath, ranch, brick exterior, attached 2 car garage, same zip wood siding, 2 car carport, pool, same zip c
Slide 26: Underwriting: Homeowners
Underwriting: Homeowners ~$83B Homeowners Multi-Peril Direct Written Premium Comprehensive suite of underwriting analytics to expedite accurate underwriting decisions, including replacement cost estimation, location-based risk data, catastrophe risk data, and claims loss histories Verisk provides da
Slide 27: Case Study: Homeowners Underwriting
Case Study: Homeowners Underwriting Verisk provides data to support rules-based underwriting decisions: Underwriting Assessment Result Underwriting Rule Results Replacement cost RCE > $600,000 requires underwriter $430,000 Pass estimate approval Properties <.5 miles from coast require Distance to co
Slide 28: Underwriting: Commercial Property
Underwriting: Commercial Property ~$55B in Direct Written Premium Unique database of 3.5 million commercial buildings and ratings on ~47,000 fire protection areas provide differentiated methods to underwrite Verisk verifies application information is correct: • Construction • Protection • Occupancy
Slide 29: Case Study: Commercial Property Portfolio Analysis
Case Study: Commercial Property Portfolio Analysis Analyzed more than 250,000 buildings and 1.8 million commercial property characteristics Rating Information Analysis Identified Construction Class • 30% of the carrier risks had incorrect construction class Year Built • 19% of the risks we identifie
Slide 30: Claims Estimation: Homeowners
Claims Estimation: Homeowners Personal property contents estimating solution teamed with powerful cost research and property data facilitates faster settlements and increased customer satisfaction. Verisk analysis: ~$330 per claim 81% Total projected indemnity Projected loss adjustment (claim settle
Slide 31: Claims Estimation: International Expansion
Claims Estimation: International Expansion Global customers also experiencing outstanding results with adoption of property estimation tools. Top United Kingdom insurance carrier reports: 34 Days $1.5M Reduced cycle time Saved more than $1.5million (U.S.) from 39 days to 5 days in first six months B
Slide 32: Claims Management and Fraud Detection: Homeowners
Claims Management and Fraud Detection: Homeowners Enables fast-tracking of claims at first notice of loss and better total management to: Lower combined ratio Increase customer retention Accelerate cycle time Improve ratio claims/adjuster More than1B claims in the ISO ClaimSearch database Homeowner
Slide 33: Industry Challenge: Hail Claim Frequency and Severity Are Accelerating
Industry Challenge: Hail Claim Frequency and Severity Are Accelerating Number of Hail Claims Increased from 2010 to 2012*: 84% $54B 70% 65% Insurers paid a total of $54B in Almost 70% of the $54B in Average severity was 65% higher claims for hail losses from hail claim losses occurred from 2008 thro
Slide 34: Verisk Addresses the Challenge: Early Fraud Detection Improves Productivity/Outcomes
Verisk Addresses the Challenge: Early Fraud Detection Improves Productivity/Outcomes Reduce triage time at first notice of loss: Identifies prior history of roof damage Detects claimant financial stressors Scores probable fraud indicators Deeper investigation reduces Meritorious claims fast-tracked
Slide 35: Case Study: Portfolio Analysis
Case Study: Portfolio Analysis U.S. Commercial Portfolio Touchstone: All-Peril Analysis Time in 3 Hours ~300K ~$200B Locations Countrywide 300 251 250 Total Insured Value 200 $ Millions 186 167 150 100 50 14 18 12 0 Avg. Annual Loss 100 Years All-Peril Analysis, Improved Efficiency Hurricane Only (H
Slide 36: Integration of Cat and Non-Cat Losses
Integration of Cat and Non-Cat Losses CAT RISK NON-CAT RISK TROPICAL CYCLONE FIRE (Hurricane, Typhoon) SEVERE THUNDERSTORM (Tornado, Hail, Straight-Line Wind) VANDALISM & THEFT UNDERSTANDING RISK EXTRATROPICAL TOUCHSTONE LIGHTNING CYCLONE (Winter Storm) EARTHQUAKE EXPLOSION FLOOD WATER LEAKAGE TERRO
Slide 37: Verisk Provides Industry-Leading Solutions & Analytics
Verisk Provides Industry-Leading Solutions & Analytics Primary Risk Assessment Competitive Advantage Competitors Industry-Standard 5 petabytes of time-series data and coverage Internal Insurance Programs language in >200M policies Comprehensive database of 3.5M commercial Property Information buildi
Slide 38: Building on Our Unique Heritage Growth Opportunities
Building on Our Unique Heritage Growth Opportunities Industry-Wide Focus New Solutions New Customer Sets • Cross-Sell and Bundle • Remote Imagery • International • Product Development • Predictive Pricing Models • Weather Analytics (Customized Policy Language) • Commercial Flow Business • Point-of-S
Slide 39: Financial Impact: Homeowners Insurance Company
Financial Impact: Homeowners Insurance Company Revenues ($ million) Premiums $828 Net Investment Income $101 Net Realized Investment Gains (Losses) $2 Other Revenues $5 Total Revenues $936 Claims & Expenses Claims & Claim Adjustment Expenses $494 Policy Acquisition Expenses $142 General, Administrat
Slide 40: Financial Impact: Homeowners Insurance Company
Financial Impact: Homeowners Insurance Company Revenues ($ million) Premiums $828 Net Investment Income $101 Net Realized Investment Gains (Losses) $2 Other Revenues $5 Total Revenues $936 Claims & Expenses Claims & Claim Adjustment Expenses $494 Policy Acquisition Expenses $142 General, Administrat
Slide 41: Deep Domain Expertise
Deep Domain Expertise Executive Role Tenure (years) President, Beth Fitzgerald 35 ISO Insurance Programs and Analytic Services President, Bill Raichle 34 Verisk Insurance Solutions – Commercial Property President and Chief Executive Officer, Jim Loveland 27 Xactware Solutions President, Rich Della R
Slide 42: Questions?
Questions? verisk Analytics
Slide 43: Healthcare: Verisk Health
Healthcare: Verisk Health 43
Slide 44: Our Mission
Our Mission Our mission is to empower a sustainable, value-based healthcare delivery and payment system. 44
Slide 45: Verisk Health Overview
Verisk Health Overview Our Vision To be the trusted data analytics and technology partner that helps our clients identify and manage clinical and financial risks within the populations they serve, while also ensuring the alignment of payment, risk, and quality of care. Health Plans: 260+ Provider Ne
Slide 46: Addressing Our Clients' Challenges
Addressing Our Clients’ Challenges Increasingly Complex Greater Need for Cost Shift to Value-Based Regulatory Environment Containment Healthcare Our Solutions Revenue Payment Population Quality Solutions to align patient Solutions to ensure Analytics and reporting Solutions to drive risk with approp
Slide 47: Competitive Landscape
Competitive Landscape Revenue Payment Population Quality 47
Slide 48: Verisk Health Advantage
Verisk Health Advantage Depth of Client Relationships Solutions That Healthcare Empower Domain & Value-Based Regulatory Healthcare Expertise Industry Data Standard Management Analytic & Proprietary Engines Data Assets 48
Slide 49: Empowering Value-Based Healthcare
Empowering Value-Based Healthcare Why Value-Based Healthcare Defining Value-Based Is Imperative Healthcare $5.2T $3.1T Improve $2.4T Clinical & Unsustainable rise Quality in costs (1) Outcomes 2008 2014 2023 Reduce Improve Patient Clinical Waste Experience & & Variation in $900B+ Engagement Care Of
Slide 50: Improving Outcomes & Aligning Payment
Improving Outcomes & Aligning Payment Population Improve Clinical & Quality Outcomes Improve Reduce Patient Clinical Waste Verisk Health identifies and predicts patients with the highest Experience & & Variation in medical risk, allowing health plans and providers to deliver Engagement Care better c
Slide 51: Improving Quality & Linking to Payments
Improving Quality & Linking to Payments Quality Improve Clinical & Quality Outcomes Improve Reduce Patient Clinical Waste Verisk Health measures quality performance, identifies gaps Experience & & Variation in in care, enables data-driven interventions and facilitates the Engagement Care process of
Slide 52: Addressing Waste & Transparency
Addressing Waste & Transparency Payment Improve Clinical & Quality Outcomes Improve Reduce Patient Clinical Waste Verisk Health detects variations in care and Experience & & Variation in suspicious billing patterns, enabling our clients to Engagement Care reduce waste and improve transparency. Align
Slide 53: Path to Growth
Path to Growth Widening the Moat and Driving Revenue Market Expansion Market Penetration Innovation Aging Population Medicare Advantage Anti-Fraud Alliance Coverage Expansion Managed Medicaid Payer/Provider Collaboration Value-Based Contracts At-Risk Providers Shared Savings Exchanges Commercial Pla
Slide 54: Market Trends Driving Growth
Market Trends Driving Growth Aging Population Coverage Expansion Shift to Value-Based Payments Managed Medicaid lives1 (m) Provider covered lives in risk Medicare Advantage lives1 (m) contracts2 +3.0% +8.0% 26.3 49.5 59.2 126.8 16.6 +32.3% 2014 2020 QHP / Exchanges lives1 (m) 23.7 80.0 2014 2020 +28
Slide 55: Addressable Market Is Growing
Addressable Market Is Growing Almost doubles by 2019 $8.7Bn $0.9 $2.7 Quality $4.8Bn Population $0.8 Payment $2.1 $0.7 Revenue $1.9 $3.0 $1.4 2014 2019 55
Slide 56: Market Penetration – 2014
Market Penetration – 2014 115+ 35+ Up-Sells New Clients 15% 95%+ Customers Purchase Retention Multiple Solutions 56
Slide 57: Innovation
Innovation Anti-Fraud Payer/Provider Shared Alliance Collaboration Savings Pooled Data Population & Patient Risk 28 MSSP ACO Clients in 2014 Fraud Analytics Provider Performance 9 Pioneer MSSP Clients – Analytics 7 Experienced Shared Savings ~16M Lives Across 50 States Quality Reporting CMS 2018 goa
Slide 58: Verisk Health Financial Performance
Verisk Health Financial Performance Multiple Growth Drivers 16% Market Expansion Market Penetration $316M 22% Innovation 114% $272M $223M Attractive Business Model 79% Revenue Linked to Customer Growth SaaS Subscriptions $104M 16% Multiyear Contracts $58M 95%+ Customer Retention $50M 2009 2010 2011
Slide 59: Questions?
Questions? verisk Analytics
Slide 60: Financial Services: Argus
Financial Services: Argus 60
Slide 61: Argus Is a Leading Provider of Data, Information & Analytic Solutions for Banks and Their Regulators
Argus Is a Leading Provider of Data, Information & Analytic Solutions for Banks and Their Regulators Strategy At the foundation of our value-creating solutions… Advertising Regulation • Unique and Proprietary Consortia Datasets Argus • Deep Domain Expertise in Analytics Risk & Fraud Product and Bank
Slide 62: Growth through Geographic Expansion and New Product Innovation
Growth through Geographic Expansion and New Product Innovation Company Milestones 1997 2006 2010 2014 Track Record of Innovation 62
Slide 63: Our Solutions Suite is Designed to Address the Biggest Challenges Facing the Consumer Banking Industry
Our Solutions Suite is Designed to Address the Biggest Challenges Facing the Consumer Banking Industry Syndicated Studies Product Solutions Analytic Services Help Understand the Transform Proprietary Data Into Provide Analytics & External Environment Information & Action Execution Support Subscripti
Slide 64: Benchmarking Study Use Case: Increase Deposits
Benchmarking Study Use Case: Increase Deposits ACH Inflows $ Volume Focus on assessing increasing payroll deposits from existing clients to improve: Peers • Primacy rates • Reduce branch costs • Account retention Bank • Cross-sell Through our product-level consortium data, we: • Showed peer benchmar
Slide 65: LookAhead® Stress-Testing Software Use Case
LookAhead® Stress-Testing Software Use Case Argus helps “stress-test” portfolios to ensure regulatory compliance against the Fed’s SCAP, CCAR and DFAST requirements. • Forecasting and stress- testing… regulatory submissions and “what-if” scenario analyses. • Portfolio management… P&L modeling, staff
Slide 66: Wallet-Share Algorithms Use Case
Wallet-Share Algorithms Use Case Case study 1: Spend and Get Case Study 2: Line Increases by Off-Us Optimization Spend Segment, Test vs. Control (Incremental Sales per Mailed) (Incremental Sales per Mailed) High-Off Us Opportunity $25 $85 Low Off-Us Opportunity $17 2X $55 $67 $13 $31 $17 $19 Total L
Slide 67: Media Effectiveness Use Case
Media Effectiveness Use Case What What/ Argus has partnered with major People Where media analytics companies to See… People help improve: Key Buy… • Measurement of ad Partners Argus effectiveness by linking the spending behaviors (response) of customers that are exposed to specific types of ads (st
Slide 68: Sales Process Harnesses Balance of "Hunting" and "Farming" Mix
Sales Process Harnesses Balance of “Hunting” and “Farming” Mix •New 1 2 3 4 •Onboard Study •Cross-sell data Retention •Client or •Up-sell •Delivery Partner “Hunters” “Farmers” • New Markets • Delivery • New Clients • Cross-Sell • New Partners • Up-Sell • New Verticals • Client Retention 1/3 Sell 2/3
Slide 69: Unique Data Assets Enable Us to Provide a Valuable and Differentiated Solution Set
Unique Data Assets Enable Us to Provide a Valuable and Differentiated Solution Set Credit Payment Payment Description Argus* Bureaus Networks Processors Transaction POS & online transaction detail Data (merchant, location, amount, date) Account Credit card, deposits, checking, and Data money-market
Slide 70: Significant Runway across All Our Products and Services
Significant Runway across All Our Products and Services UK & EUR ~ $70MM North Amer ~ $260MM ME&A APAC ~ $40MM ~ $90MM LATAM ~ $40MM Estimated Total Addressable Market ~$500MM from Existing Solutions & Targeted Markets 70
Slide 71: What Next? Expanding Our Data Assets through New Markets, Verticals, and Fusion
What Next? Expanding Our Data Assets through New Markets, Verticals, and Fusion with Other Proprietary Data Assets (External and Internal) We are in the process of achieving our objectives by: Driving the richness of Deepening customer Pivoting growth and syndicated studies via intimacy via dedicate
Slide 72: Recent and Past Successes Validate the Multi-Pronged Path for Growth
Recent and Past Successes Validate the Multi- Pronged Path for Growth $96.8MM $81.1MM $64.2MM 2012 2013 2014 72
Slide 73: Questions?
Questions? verisk Analytics
Slide 74: Financial Review
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Slide 75: Attractive Business Model
Attractive Business Model • Recurring revenue stream and high barriers to entry − 72% of total revenue is subscription and long-term contracts − Extremely high customer retention − Majority of revenue is prepaid quarterly or annually − Long-standing and deep relationships with our customers − Deeply
Slide 76: Strong Track Record of Top-Line Growth
Strong Track Record of Top-Line Growth Revenue (in $ millions) 12.5% CAGR $1.5 B $1,747 $1,596 $1.0 B $1,408 $1,191 $992 $750 M $910 $830 $500 M $761 $679 $603 $540 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 ________________________________________________________________ Note: From cont
Slide 77: Strong Organic Growth Complemented by Leading Margins
Strong Organic Growth Complemented by Leading Margins Organic Revenue Growth 9.3% 9.3% 9.4% 8.5% 7.9% 2010 2011 2012 2013 2014 Verisk EBITDA Margins Verisk in Top 5% of S&P 500 > 45% ________________________________________________________________ Note: Excludes Financials and Oil 77
Slide 78: Revenue Sources Are Diverse; High Levels of Recurring Revenue
Revenue Sources Are Diverse; High Levels of Recurring Revenue 2014 Revenue Distribution 2014 Subscription Base Healthcare Specialized 18% 5% Financial Services 6% Subscription Transaction Risk Revenue Revenue Assessment 72% 28% 37% Insurance 34% Decision Analytics 63% _______________________________
Slide 79: Insurance Is a Strong Foundation for Growth; Newer Verticals Are Making Important Contributions
Insurance Is a Strong Foundation for Growth; Newer Verticals Are Making Important Contributions • Growth driven by a combination − New Customers − Deeper Penetration into Existing Customers − New Solutions • Majority of Revenue Is Prepaid Quarterly or Annually • Very high customer retention 2014 Con
Slide 80: Consistent Quarterly Top-Line Progression
Consistent Quarterly Top-Line Progression Risk Assessment (in $ millions) 162 162 161 165 156 153 154 155 145 144 144 146 138 138 137 139 1Q 2Q 3Q 4Q11 1Q 2Q 3Q 4Q12 1Q 2Q 3Q 4Q13 1Q 2Q 3Q 4Q14 Decision Analytics (in $ millions) 287 300 242 257 260 247 262 223 224 236 195 152 167 179 168 141 1Q 2Q 3
Slide 81: Risk Assessment: Our Heritage
Risk Assessment: Our Heritage • 100 of Top 100 P&C Companies Are Customers • Industry-Standard, Mission-Critical, Embedded Insurance Solutions − Loss cost estimates – insurers’ “cost of goods” − Regulatory compliance − Enable speed to market − Leading commercial property analytics for insurers • Fou
Slide 82: Decision Analytics: Enhancing Our Future
Decision Analytics: Enhancing Our Future • New, Large Verticals with Data Analytic Needs • Cross-Vertical Themes (Antifraud, Predictive Modeling, Benchmarking, Optimization) • Leveraging Existing Assets − Repurposing of data (n + 1) − Technology infrastructure − Replatforming Revenue (in $ millions)
Slide 83: 2014 Saw Strong Revenue Growth and Good Cost Management
2014 Saw Strong Revenue Growth and Good Cost Management Revenue (in $ millions) 977 1,096 Growth (2013–2014) DA 12.1% RA 5.2% 618 651 VRSK 9.5% 2013 2014 EBITDA (in $ millions) 434 Growth (2013–2014) Margin (2014) 398 DA 9.1% DA 39.6% RA 6.3% RA 56.7% 347 369 VRSK 7.8% VRSK 46.0% 2013 2014 _________
Slide 84: Verisk's Differentiated Financial Model
Verisk’s Differentiated Financial Model Strong, Stable Revenue Growth Leading EBITDA Margin ($M) (%) 15.2% CAGR $1,747 47.7% 46.7% $1,596 46.3% 46.6% 46.0% $1,408 $1,191 $992 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Low Capital Intensity Strong Free Cash Flow (CapEx as a % of Revenue) ($M)
Slide 85: Disciplined Capital Allocation
Disciplined Capital Allocation Cumulative $2,086 62% $1,278 38% Acquisitions and earn-outs Share Repurchase (in $ millions) 2009 2010 2011 2012 2013 2014 Share Repurchase $47 $437 $382 $163 $279 $778 Acquisitions and earn-outs $69 $222 $143 $808 $1 $35 Acquisitions and earn-outs Share Repurchase 85
Slide 86: Disciplined Track Record on M&A Delivers Value
Disciplined Track Record on M&A Delivers Value • Increase in Value at 10x Multiple: ~ $1.4 billion • Annualized Return1: ~ 20% 2002 83 2003 16 Predictive Analytics 2004 33 2005 93 2006 Annual Investment – 232 Buy and Multiple 2007 170 Acquisitions ($MM) Build Verticals 2008 101 But not without 2009
Slide 87: Share Repurchases Excluding the Accelerated Share Repurchase
Share Repurchases Excluding the Accelerated Share Repurchase Total Shares Repurchased through 12/31/14 4.4 million Total $ Repurchased in 2014 $275.4 million Average Purchase Price 2014 $62.18 Current Share Price (February 25, 2015) $72.18 Annualized return1 May 2010 - Feb 2015 21.0% $ Return above
Slide 88: Debt Facilities and Capital Structure
Debt Facilities and Capital Structure Balanced Maturity Schedule at Year-End ($ in millions) Private Placements $ 220 Bonds 1,050 Revolver expanded to Revolver 160 $990M, due Oct. 2019 Total Drawn $1,430 Debt/EBITDA1 1.7x Covenant levels 3.00–3.50x 830 450 350 160 170 50 250 2014 2015 2016 2017 2018
Slide 89: History of Growth and Innovation
History of Growth and Innovation 1971 – 1997 1998 – 2001 2002 – 2009 2010 – 2014 2015 & Beyond Expansion Founding Culture + Innovation The Verisk Way Change Inflection • Not-for-profit • Drive to operational • Focus on • Add new • The world's most service bureau efficiency and innovation, product ac
Slide 90: Financial Review
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