Verisk Analytics, Inc. · NASDAQ:VRSK

Verisk Analytics — Investor Day (March 2023)

142 slides from Verisk Analytics's investor day presentation, Mar 14, 2023

Slide 3: Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures
Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures Forward-Looking Statements This release contains forward-looking statements about Verisk’s future performance, including those related to our financial guidance. These statements relate to future events or to future financial p
Slide 4: Investor Day Agenda
Investor Day Agenda Approx. times 8:00 – 8:05 Introduction Stacey Brodbar, Head of IR 8:05 – 8:35 Strategic Overview Lee Shavel, President and CEO 8:35 – 8:55 Q&A 8:55 – 9:05 Break 9:05 – 9:25 Underwriting Neil Spector, President, Underwriting Solutions 9:25 – 9:40 Extreme Events Bill Churney, Presi
Slide 6: What You Will Hear Today
What You Will Hear Today 1. New Verisk Advancing a new era of innovation for the Insurance industry 2. Opportunity Play a central role as the scaled tech partner for the insurance industry 3. Strategy Path to convert the opportunity ahead of us into value for shareholders 4. Growth Drivers Multiple
Slide 7: Delivering a Better Company: What We Have Delivered to Date
Delivering a Better Company: What We Have Delivered to Date ✓ Insurance-focused enterprise ✓ Improved governance ✓ Organizational change ✓ Strong growth and margin expansion ✓ Expanded guidance © Verisk Analytics, Inc. All rights reserved. 7
Slide 8: Strategic Changes Set Us on a Path To Deliver Predictable Performance
Strategic Changes Set Us on a Path To Deliver Predictable Performance Then Now Focus Multi-Industry Laser focused on Insurance Organization Siloed Integrated Growth Mixed across non-insurance Strong, predictable Capital Allocation Poor returns Disciplined Go To Market Product Client / industry Cultu
Slide 9: New Verisk: Delivering a Predictable Growth Company
AGENDA New Verisk: Delivering a Predictable Growth Company • Clear focus on insurance, long growth runway • Industry challenges and opportunity • Capitalizing on our competitive position • Clear execution priorities © Verisk Analytics, Inc. All rights reserved. 9
Slide 10: A Strong and Profitable Platform
VERISK AT A GLANCE A Strong and Profitable Platform Revenue Profit Focus Retention Recurring $2.4B 52% 100% 95%+ 81% EBITDA Margin Insurance Total Revenue 2022 Revenue By Reporting Segment 2022 Revenue By Geography Claims Underwriting Domestic International Solutions $2.4B Solutions 85% $2.4B 15% 29
Slide 11: Delivers Solid and Consistent Growth
Delivers Solid and Consistent Growth Revenue Growth (1) Adjusted EBITDA Growth (1) 7.6% 6.5% OCC OCC 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Note 1: Numbers are pro forma for all dispositions. © Verisk Analytics, Inc. All rights reserved. 11
Slide 12: We Serve the Global Insurance Industry
We Serve the Global Insurance Industry Life & Annuity Property Property Auto Underwriting Estimating Forms, Rules, & Loss Costs Extreme Fraud Specialty Event Casualty Detection Marketing Business © Verisk Analytics, Inc. All rights reserved. 12
Slide 13: Deep Data to Power Better Insurance Decisions
Deep Data to Power Better Insurance Decisions Deep Data Innovative Technologies 30+ Comprehensive Tools Underwriting 2.3B+ transactions / year  Anti-Fraud 32B+ statistical records 16M+ commercial properties Process and Enhance Analytic Insight  Compliance Artificial Intelligence Platform Claims 
Slide 14: Advantaged Business Model Drives Strong Economic Value
Advantaged Business Model Drives Strong Economic Value Deliver top line growth, 1 2 Invest in new datasets, strong returns Advantaged Growing technology & products market position recurring revenue 5 3 Strong Operating balance leverage sheet 4 Attractive cash generation © Verisk Analytics, Inc. All
Slide 15: The New Verisk – Building on 50 Years in Insurance
The New Verisk – Building on 50 Years in Insurance Industry Utility > Data Infrastructure > Technology Innovator > Network • Centrality • Criticality • Growth • Multiplier • Scale • Defensibility • Industry • Efficiency • Stability • Evolution • Solutions • Operating leverage © Verisk Analytics, Inc
Slide 16: Next Generation of Management Brings New Energy and Ideas
Next Generation of Management Brings New Energy and Ideas Lee Shavel Chief Executive Officer BU Leaders Bill Churney Maroun Mourad Tim Rayner Neil Spector President, President, President, President, Extreme Event Solutions Claims Solutions Specialty Business Solutions Underwriting Solutions Function
Slide 17: Clearly Defined Strategic Operating Goals
Clearly Defined Strategic Operating Goals Client Product Team Financial • Strengthen client • Enhance existing • Enhance results- • Revenue growth strategic dialogue solutions oriented compensation • Margin expansion • Intensify industry • Accelerate growth • Communicate new engagement opportunities
Slide 18: New Verisk: Delivering a Predictable Growth Company
AGENDA New Verisk: Delivering a Predictable Growth Company • Clear focus on insurance, long growth runway • Industry challenges and opportunity • Capitalizing on our competitive position • Clear execution priorities © Verisk Analytics, Inc. All rights reserved. 18
Slide 19: US Insurance: A Scaled Industry That Plays A Critical Role in the Economy
US Insurance: A Scaled Industry That Plays A Critical Role in the Economy Verisk Solutions are Mission-Critical A Scaled Industry but Small-Cost Item for the Industry $800B VRSK 2022 Revenue as % of US GWP US GWP 0.3% 3,700 $500B Number of Industry US P&C Carriers Expenditures VRSK 2022 Revenue as a
Slide 20: Global Market Provides A Huge Runway for Growth
Global Market Provides A Huge Runway for Growth Growth Market Growth Drivers ✓ Growing risk from: ‒ Climate ‒ Technology ‒ Societal and geopolitical +2X ‒ Legal and regulatory ✓ $880B or 44% growth in Advanced Market $4.3T P&C Premiums $1.8T by 2040 ✓ $900B or 180% growth in Emerging Market 2020 P&C
Slide 21: Industry Challenges
Industry Challenges Rapidly Changing Growing Regulatory Challenging Macro Technology Burdens Environment • Cloud migration • Data privacy • High inflation • Low/No Code • Fairness • Talent retention • Digitalization • Climate • Value creation © Verisk Analytics, Inc. All rights reserved. 21
Slide 23: New Verisk: Delivering a Predictable Growth Company
AGENDA New Verisk: Delivering a Predictable Growth Company • Clear focus on insurance, long growth runway • Industry challenges and opportunity • Capitalizing on our competitive position • Clear execution priorities © Verisk Analytics, Inc. All rights reserved. 23
Slide 24: Verisk is at the Center of a Large, Complex Ecosystem
Verisk is at the Center of a Large, Complex Ecosystem Insurers 3,700 carriers 1.6M employees Regulators Contractors 50 States & 1.3M companies 4 Territories Brokers Communities, 400k companies Businesses 1.2M employees & People Reinsurers 150+ companies *Source: AM Best, BLS, Management estimates. ©
Slide 25: Well-Positioned in Large and Growing Markets
Well-Positioned in Large and Growing Markets Underwriting & Rating Claims Growing +LSD% annually Growing +LSD% annually Total Total Addressable Market: Addressable Market: $15B $4.7B Current Current Share: Share: ~12% ~15% Business Lines: Business Lines: Forms, Rules, Loss Costs Life Solutions Prope
Slide 26: Verisk Competitive Advantages We Are Building On
Verisk Competitive Advantages We Are Building On 1 Longstanding industry relationships 2 Deep insurance industry expertise 3 Scale to drive broad distribution of innovation 4 Expanding integration into workflows 5 Proprietary asset data © Verisk Analytics, Inc. All rights reserved. 26
Slide 27: New Verisk: Delivering a Predictable Growth Company
AGENDA New Verisk: Delivering a Predictable Growth Company • Clear focus on insurance, long growth runway • Industry challenges and opportunity • Capitalizing on our competitive position • Clear execution priorities © Verisk Analytics, Inc. All rights reserved. 27
Slide 29: Drive Consistent and Predictable Growth by Extending Our Reach within Insurance
PRIORITY #1 Drive Consistent and Predictable Growth by Extending Our Reach within Insurance Faster Life Growth Insurance Marketing Specialty Business Solutions (International) Core Line Reimagine Claims Sustain and Initiative Solutions Resilience & Accelerate Supercharge Sustainability ecosystem Ext
Slide 30: Drive Consistent Growth Through Cross Sell of Existing Solutions
PRIORITY #1 Drive Consistent and Predictable Growth Through Cross Sell of Existing Solutions Average Number of Products (Across 33 Product Categories) Top 1 - 10 Customers 11 - 25 Customers 26 - 100 Customers 101 - 500 Customers 16.9 15.3 15.4 14.2 13.3 12.0 9.8 9.0 8.1 4.3 3.1 3.6 2016 2018 2022 20
Slide 31: Drive Consistent and Predictable Growth Through Innovation
PRIORITY #1 Drive Consistent and Predictable Growth Through Innovation Sustainable Transformational Disruptive Efficiency Innovation Innovation Innovation Innovation Optimizing existing Streamlining existing Leading the industry with Inventing market products for existing processes and business new
Slide 32: Multiple Levers of Margin Expansion
PRIORITY #2 Multiple Levers of Margin Expansion Result Operating Leverage Cost Actions Portfolio Impacts Margin • Subscription revenues drive • Cost savings from • Mix shift from faster expansion high incremental margins technology transformation growing, lower margin businesses • Build once, sell m
Slide 33: Ensure Disciplined Capital Allocation
PRIORITY #3 Ensure Disciplined Capital Allocation 1 2 3 4 Organic Selective Strong Return Capital Investment M&A Balance Sheet to Shareholders © Verisk Analytics, Inc. All rights reserved. 33
Slide 34: Verisk 2025 Financial Targets
Verisk 2025 Financial Targets OCC Revenue OCC EBITDA Adjusted EBITDA Adjusted EPS Growth Growth Margin Expansion Growth 54-56% in 2024 6%-8% 7%-10% +Double Digit annually annually +25-75 bps in 2025 © Verisk Analytics, Inc. All rights reserved. 34
Slide 35: Delivering the New Verisk: Our Future
IN SUMMARY Delivering the New Verisk: Our Future 1 2 3 Leveraging & Clear growth, Laser focused capitalizing on our profitability and on the Insurance advantaged market capital allocation business position roadmap The New Verisk Focused, Predictable Growth Company © Verisk Analytics, Inc. All rights
Slide 36: Modernizing and Pressing Our Competitive Positioning
Modernizing and Pressing Our Competitive Positioning Neil Spector President, Underwriting Solutions © Verisk Analytics, Inc. All rights reserved.
Slide 38: Modernizing and Pressing Our Competitive Positioning
AGENDA Modernizing and Pressing Our Competitive Positioning • “One-of-a-Kind” business • Attractive market opportunities • Strategy to drive growth © Verisk Analytics, Inc. All rights reserved. 38
Slide 39: Underwriting Solutions is a One-of-a-Kind Business
AT A GLANCE Underwriting Solutions is a One-of-a-Kind Business Underwriting Solutions Revenue Split (%) Key Characteristics Underwriting records of premiums and losses in our Products 32B market-leading statistical database 24% policy forms across 30 lines and Forms, Rules, Loss Costs 35,000 54 juri
Slide 40: Solid and Consistent Financial Performance
Solid and Consistent Financial Performance Revenue Growth Breakdown of $1.3B Revenues 6% OCC CAGR Transactional 16% 2022 Subscription 84% • High recurring revenue business • ~99% customer retention rates 2018 2019 2020 2021 2022 © Verisk Analytics, Inc. All rights reserved. 40
Slide 41: Our Goal is to Drive Transformation in the Insurance Industry
Our Goal is to Drive Transformation in the Insurance Industry Our products help insurers better target and segment risk and more precisely price and underwrite risk—while delivering a significantly enhanced customer experience. © Verisk Analytics, Inc. All rights reserved. 41
Slide 42: Complete Offering Helps Insurers Understand and Price Risk
Complete Offering Helps Insurers Understand and Price Risk Forms, Rules & Commercial Personal Lines Personal Life Marketing Loss Costs Property Property Auto Powered by Proprietary & Contributory Data and Advanced Technology © Verisk Analytics, Inc. All rights reserved. 42
Slide 43: Modernizing and Pressing Our Competitive Positioning
AGENDA Modernizing and Pressing Our Competitive Positioning • “One-of-a-Kind” business • Attractive market opportunities • Strategy to drive growth © Verisk Analytics, Inc. All rights reserved. 43
Slide 44: U.S. P&C Market Provides a Runway for Stable Growth
U.S. P&C Market Provides a Runway for Stable Growth U.S. P&C Market Market Size Growth Total +100-200 Addressable Market: bps $4B 6% 4% Current Share: ~30% Long-term Our Industry Growth (1) Growth 1. Direct written premium growth as reported by A.M. Best from 2000 through 2021. © Verisk Analytics, I
Slide 45: U.S. P&C Industry Facing Growing Number of Challenges
U.S. P&C Industry Facing Growing Number of Challenges Efficiency & Automation Accuracy Digitization Growing need for our data and • 71% of underwriters say • ~90% of underwriters say • ~80% of underwriters say solutions ineffective systems & improving underwriting customer demand for inefficient pro
Slide 46: Modernizing and Pressing Our Competitive Positioning
AGENDA Modernizing and Pressing Our Competitive Positioning • “One-of-a-Kind” business • Attractive market opportunities • Strategy to drive growth © Verisk Analytics, Inc. All rights reserved. 46
Slide 47: Large Unpenetrated Addressable Markets for Rapidly Growing Adjacencies
Large Unpenetrated Addressable Markets for Rapidly Growing Adjacencies Life Insurance Marketing Solutions International U.S. U.S. P&C current markets Markets growing Total Total Total Total Addressable Market: Addressable Market: Addressable Market: Addressable Market: $2B $2B $1B $1B TAM expansion
Slide 48: Four Point Plan to Drive Growth
Four Point Plan to Drive Growth 1 Constantly upgrading and evolving product for value-based pricing 2 Modernize core offering to improve industry productivity Expanded data coverage / quality and data-forward / digital delivery 3 to improve underwriting accuracy and efficiency Penetrating new growth
Slide 49: Constantly Upgrading and Evolving Product Drives Growth
GROW TH DRIVER #1 Constantly Upgrading and Evolving Product Drives Growth Contributory & Benefits for Customers Proprietary Data ✓ Better decision making ✓ Efficiency ✓ Contribution & bundling discounts Benefits for Verisk ✓ Competitive differentiation ✓ Share of wallet expansion ✓ Longer-term stick
Slide 50: Modernizing Forms, Rules, and Loss Costs Will Help
GROW TH DRIVER #2 Modernizing Forms, Rules, and Loss Costs Will Help Address the Industry’s Productivity Imperative Grow our value-add to the industry Fortify our value proposition Modernize our foundation New solutions Expand into new workflows More data New, faster insights Digitize our content Ne
Slide 51: Expanded Data Coverage and Quality Increases Underwriting Accuracy
GROW TH DRIVER #3 Expanded Data Coverage and Quality Increases Underwriting Accuracy Expanded Data Coverage in Commercial Increased Data Quality… Property through Digitization… 15.7M 5 Core Attributes 2020 2022 +200% Construction class 40% 100% Occupancy 62% 100% Number of stories 79% 100% Year buil
Slide 52: Data-Forward, Digital Delivery Increases Underwriting Efficiency
GROW TH DRIVER #3 Data-Forward, Digital Delivery Increases Underwriting Efficiency and Improves Customer Experience LightSpeed • Dramatically reduced question count and 80%+ reduction in time to fully bindable quote Benefits for Customers • Supports all insurance distribution models including ✓ More
Slide 53: Case Study #1: Large Carriers Drive Growth
GROW TH DRIVERS: CASE STUDY Case Study #1: Large Carriers Drive Growth Opportunity Result: Revenue Growth • Top 15 U.S. P&C insurance carrier and customer for 10+ years with 4% average 9% CAGR annual premium growth1 • Growth driven by core offerings / premium growth • Cross-selling and competitive t
Slide 54: Case Study #2: Gaining Wallet Share Through Cross-sell
GROW TH DRIVERS: CASE STUDY Case Study #2: Gaining Wallet Share Through Cross-sell of Broad Product Offering New U.S. Insurtech started in 2017 LightSpeed in 2023 • Purchased 4 products in 2019 and 10 in 2022 expanding wallet 128x • Recent adoption of LightSpeed Fireline • Participate in growth of o
Slide 55: New Growth Vectors: Modernization of the Life Insurance Industry
GROW TH DRIVER #4 New Growth Vectors: Leading the Modernization of the Life Insurance Industry Positioned at the Center of Benefits for Customers Tech Trends and Industry Forces Technology Trends Low / Data / AI Speed to No Code Driven Market 75% reduction in time to market FAST Individual Life | Gr
Slide 56: New Growth Vectors: Vertical Player for Insurance Marketing
GROW TH DRIVER #4 New Growth Vectors; Building True Vertical Player for Insurance Marketing Address Entire Lifecycle from Prospect thru Policy Holder Advantages Marketing data Complete & actionable for profitable & data strategy safe interactions Who What When Identity Attributes Signals & Insights
Slide 57: New Growth Vectors: Double-Digit International Growth
GROW TH DRIVER #4 New Growth Vectors: Differentiation in Unpenetrated Markets Driving Double-Digit International Growth Modern delivery platforms and premier market tools Unique data & capabilities Applications for in opaque market • Data Insights Hub delivering 50M International Expansion data poin
Slide 58: Underwriting Solutions: How We Will Measure Success
Underwriting Solutions: How We Will Measure Success Revenue Growth +50-100 bps New 6% Underwriting Growth Vectors Products Forms, Rules, & Lead in new markets Loss Costs and deliver double-digit growth Excel in core businesses and accelerate 2018-2022 mid-single-digit growth 2022-2025 CAGR CAGR © Ve
Slide 59: Modernizing and Pressing Our Competitive Advantage
SUMMARY Modernizing and Pressing Our Competitive Advantage Unmatched offerings built on contributory and proprietary data Proven track record of dependable growth above the industry average for our market leading solutions Large and attractive markets for our new and differentiated growth vectors Mu
Slide 60: Driving Growth through Strong Execution and Best in Class Science
Driving Growth through Strong Execution and Best in Class Science Bill Churney President, Extreme Event Solutions © Verisk Analytics, Inc. All rights reserved.
Slide 61: Driving Growth through Strong Execution and Best in Class Science
AGENDA Driving Growth through Strong Execution and Best in Class Science • Strong franchise operating in a healthy market • Attractive market opportunities • Strategy to drive growth © Verisk Analytics, Inc. All rights reserved. 61
Slide 62: Extreme Events Solutions Today
AT A GLANCE Extreme Events Solutions Today Extreme Events Solutions Revenue Split Key Characteristics (%) Insurers Gov't/Other 31% 7% Corporates 100+ PhDs 5% ~ $300M Global indices for ESG risk +170 factors revenue Brokers 19% Countries covered by extreme +110 event models Reinsurers 38% 500+ Custom
Slide 63: Our Risk Solutions Address the World's Biggest Problems
Our Risk Solutions Address the World’s Biggest Problems – 8 of Top 10 Global Risks (1) Natural Peril Liability Geospatial Securitized Risk Modeling Modeling ESG Data Analytics Risk Transfer Indices Powered by Enterprise Grade Software Note 1: As defined by the World Economic Forum © Verisk Analytics
Slide 64: The World Faces a Wide Range of Extreme Events
The World Faces a Wide Range of Extreme Events Verisk Global Insured Modeled Losses Terror Severe Storm 4% 36% Wildfire 4% Flood 6% $120B+ Average Annual Crop 15% Losses Tropical Earthquake Cyclone 10% 25% Source: Verisk 2022 Global Modeled Catastrophe Losses Whitepaper © Verisk Analytics, Inc. All
Slide 65: Solid and Consistent Financial Performance
Solid and Consistent Financial Performance Revenue Growth Breakdown of $300M Revenues 8.5% CAGR Transactional 13% 2022 Subscription 87% • High recurring revenue business • 95%+ client retention rates 2018 2019 2020 2021 2022 © Verisk Analytics, Inc. All rights reserved. 65
Slide 66: Key Strengths
Key Strengths Best in Class Models Enterprise Grade Software Client-Centric Service • Responsible implementation • Hosted in the cloud • Client service NPS > 75 of most up to date science • Truly open and flexible • Global support teams • Integrated use of AI platform located in major (re)insurance
Slide 68: Driving Growth through Strong Execution and Best in Class Science
AGENDA Driving Growth through Strong Execution and Best in Class Science • Strong franchise operating in a healthy market • Attractive market opportunities • Strategy to drive growth © Verisk Analytics, Inc. All rights reserved. 68
Slide 69: Industry Facing Growing Number of Challenges
Industry Facing Growing Number of Challenges Rising Cost Need to Monitor and Measure Drive Operational Efficiency of Catastrophes Climate and ESG Risk in Analytics Workflows • Increase in losses from • Increased regulatory and • Automation of complex “secondary perils” reporting requirements workflo
Slide 70: Actual Insured Losses from Natural Catastrophes Have Doubled
Actual Insured Losses from Natural Catastrophes Have Doubled Last 5 Years vs. Previous 5 Years Average Annual Losses Key Factors Driving Increase (USD Billions) $103B • Rise in values and replacement costs • Natural variability over 5-year period • Effects of climate change on atmospheric perils $47
Slide 71: Most Natural Disaster Losses Remain Uninsured
Most Natural Disaster Losses Remain Uninsured Insured and Total Economic Losses By Region (1) (USD) Uninsured Insured $287B $293B $143B $45B $84B $65B $503B $71B $19B $22B North America Latin America Europe Asia Oceania 1. At 1% exceedance probability (100-year return period) level 2. Source: Verisk
Slide 72: Healthy and Growing $2.5B Addressable Market
Healthy and Growing $2.5B Addressable Market P&C Extreme Event Models and ESG Data and Analytics Market Size Growing Steadily + MSD% Total Annually Addressable Market: $2.5B Current Share: ~12% © Verisk Analytics, Inc. All rights reserved. 72
Slide 73: Driving Growth through Strong Execution and Best in Class Science
AGENDA Driving Growth through Strong Execution and Best in Class Science • Strong franchise operating in a healthy market • Attractive market opportunities • Strategy to drive growth © Verisk Analytics, Inc. All rights reserved. 73
Slide 74: Four Point Plan to Drive Growth
Four Point Plan to Drive Growth 1 Drive market share gains within insurance and reinsurance Migrate to SaaS platform to improve risk analysis and drive 2 efficiency for clients 3 Grow ESG Risk Analytics through differentiated offering 4 New product development: OneVerisk for Property Analytics © Ver
Slide 75: Drive Continued Market Share Gains Within Insurance and Reinsurance
GROW TH DRIVER #1 Drive Continued Market Share Gains Within Insurance and Reinsurance Non-Life Premium Moved to Verisk 2018-2022 Models in Last 5 Years 8.5% +$40B CAGR >30 Clients 11 bps 2018 ~5% CAGR Market Growth Revenue Growth 2018 2022 Direct Written Premiums Verisk EES Solutions (Global non-lif
Slide 76: Cross Sell Case Study – End-to-End Data Insight Solutions
GROW TH DRIVER #1 – A CLOSER LOOK Cross Sell Case Study – End-to-End Data Insight Solutions New Global (Re)Insurer Liability Startup Example Modeling* Enterprise • Startup Treaty Reinsurer Exposure • Initial engagement w $0 GWP Manager* • Plans for global reinsurance expansion Analyze and growth int
Slide 77: Migrate to SaaS Platform to Drive Speed of Innovation
GROW TH DRIVER #2 Migrate to SaaS Platform to Drive Speed of Innovation and Faster Adoption Initiatives Results We Expect ✓ Create fully SaaS deployed environment Benefits for client ✓ Reduce Total Cost of Ownership ✓ Move to quarterly technology release cycle from annual today ✓ Quicker adoption ti
Slide 78: Grow ESG Risk Analytics through Differentiated Offering
GROW TH DRIVER #3 Grow ESG Risk Analytics through Differentiated Offering Differentiated Offering Results Climate Change ✓ Grow current client set : Commodity Biodiversity • 50% of total market cap of the S&P 500 Risk • Investors representing $25T AuM Geospatial ✓ Capitalize on growth in ESG spend b
Slide 79: Organic New Product Development: OneVerisk for Property Analytics
GROW TH DRIVER #4 Organic New Product Development: OneVerisk for Property Analytics Unique Industry Offering Advantages ✓ Drive monetization of solution from integrated platform + = ✓ Designed to addresses the full lifecycle of risk Verisk proprietary ✓ Enable benchmarking Verisk-Hosted OneVerisk fo
Slide 80: Extreme Event Solutions: How We Will Measure Success
Extreme Event Solutions: How We Will Measure Success Revenue Growth New Product Development +50-100bps ESG Technology Analytics Market Share Migration Gains 8.5% 2018-2022 2022-2025 CAGR CAGR © Verisk Analytics, Inc. All rights reserved. 80
Slide 81: Driving Continued Growth with Better Science, Data and Execution
SUMMARY Driving Continued Growth with Better Science, Data and Execution Proven track record of delivering above average 8.5% CAGR growth Large attractive $2.5B market growing at MSD% Unmatched offering based on leading science and enterprise software platform Multiple drivers set to deliver continu
Slide 83: Multiple Factors Driving Sustained Growth
AGENDA Multiple Factors Driving Sustained Growth • Building on a solid base • Growth opportunities • Strategy to drive growth © Verisk Analytics, Inc. All rights reserved. 83
Slide 84: Claims Solutions Today
AT A GLANCE Claims Solutions Today Claims Solutions Revenue Split (%) Key Characteristics International 5% Casualty Property 50+ Years of Insurer data 10% Estimating 53% $0.7B revenue 30+ Solutions for entire Claims cycle Anti-Fraud 1.6B+ Claims records in database 32% AI Predictive analytics 2022 $
Slide 85: Stable Recurring Revenue Base
Stable Recurring Revenue Base Revenue Growth Breakdown of $703M Revenues 5.8% CAGR $703M $652M $611M Transactional Subscription 2022 $596M 26% 74% $561M • High recurring revenue business • Customer retention rate at 90%+ 2018 2019 2020 2021 2022 © Verisk Analytics, Inc. All rights reserved. 85
Slide 86: Diverse Client Base Presents Penetration Opportunities
Diverse Client Base Presents Penetration Opportunities Customer Type (% of Revenue) Other 6% Independent adjusters/Third party Insurers administrators 54% 20% 2022 Contractors 20% © Verisk Analytics, Inc. All rights reserved. 86
Slide 88: Leveraging Key Strengths
Leveraging Key Strengths Market Leadership Best-In-Class Data Ecosystem Leveraging Key Strengths • End to end solutions • Best-in-class database • Widest and deepest for Property Estimating & enhancing analytics for growing Ecosystem anti-fraud solutions connectivity with • >75% market share custome
Slide 90: Multiple Factors Driving Sustained Growth
AGENDA Multiple Factors Driving Sustained Growth • Building on a solid base • Growth opportunities • Strategy to drive growth © Verisk Analytics, Inc. All rights reserved. 90
Slide 91: Large $4.7B U.S. Expanding Addressable Market
Large $4.7B U.S. Expanding Addressable Market Anti-Fraud Casualty Property Total Total Total Addressable Market Addressable Market Addressable Market $3B $1B $0.7B Current Share Current Current Share Share 53% 8% 11% Key Opportunities Key Opportunities Key Opportunities ✓ Policy lifecycle solutions
Slide 92: Driving Over 10x Return on Investment Through Casualty Workflow Automation
CASE STUDY – CASUALTY SOLUTIONS Driving Over 10x Return on Investment Through Casualty Workflow Automation Situation Client Benefits • Significant time spent by Claims Adjusters Up to 90% • Increased productivity manually reviewing medical records time saved • Tedious, time consuming, and often erro
Slide 93: Multiple Factors Driving Sustained Growth
AGENDA Multiple Factors Driving Sustained Growth • Building on a solid base • Growth opportunities • Strategy to drive growth © Verisk Analytics, Inc. All rights reserved. 93
Slide 94: Four Point Plan to Drive Growth
Four Point Plan to Drive Growth 1 Enhance “Go to Market” strategy to address TAM 2 Drive product innovation with augmented datasets 3 Expand internationally 4 Leverage Verisk’s role in claims ecosystem © Verisk Analytics, Inc. All rights reserved. 94
Slide 95: Enhance Go to Market Strategy to Address TAM
GROW TH DRIVER #1 Enhance “Go to Market” Strategy to Address TAM Initiatives Results We Expect ✓ Innovate with customers Growing claims products for Top 50 Customers 4.8 ✓ Prioritized agenda focused on delivering cost savings & measurable ROI 4.4 ✓ Aggressive sales & marketing approach to drive cros
Slide 96: Case Study: Claims Solutions – Leveraging Bundling in the Anti-Fraud Space
GROW TH DRIVER #1 Case Study: Claims Solutions – Leveraging Bundling in the Anti-Fraud Space 2023 Claims Tech Based Car Sharing Platform Essentials • Self Insured Entity Public Records • 2017: Purchased ClaimSearch OFAC • 2019: Added Public, Police and Motor Vehicle Reports Verifier • 2022: Transiti
Slide 97: Product Innovation & Augmented Datasets
GROW TH DRIVER #2 Product Innovation & Augmented Datasets Leverage Improved Ecosystem Data Datasets Insights Assets Results ✓ Increased automation ✓ Higher productivity Leverage and Respond to Enhancing ✓ Deliver cost combine existing customer feedback existing datasets datasets to deliver to delive
Slide 98: Expand Internationally
GROW TH DRIVER #3 Expand Internationally Results ✓ Growth in international markets is accretive to overall Claims growth ✓ Synergies from cross border collaboration in Entry Jan 2023 Continental Europe ✓ Scale and relevance in Bodily Injury claims Entry Feb 2017* Entry Dec 2021 and other lines of bu
Slide 100: Claims Solutions: How We Will Measure Success
Claims Solutions: How We Will Measure Success Revenue Growth +75-200bps Leverage Expand Claims 5.8% Innovation Internationally Ecosystem Enhance "Go to Market“ Strategy 2018-2022 2022-2025 CAGR CAGR © Verisk Analytics, Inc. All rights reserved. 100
Slide 101: Multiple Factors Driving Sustained Growth
SUMMARY Multiple Factors Driving Sustained Growth Enhanced Go To Market focused on subscription sales and high ROI cross sell Accelerate pace of focused tech innovation and drive more value from existing and new datasets Enhance operating model across products and geographies to deliver operating le
Slide 103: Panel Discussion: Expanding our Reach in Insurance
Panel Discussion: Expanding our Reach in Insurance Tom Famularo – Managing Director, Life Solutions Matt Lohman – Managing Director, Marketing Solutions Tim Rayner – President, Specialty Business Solutions © Verisk Analytics, Inc. All rights reserved.
Slide 104: Life Solutions
AT A GLANCE Life Solutions Life Solutions Revenue Split (%) Key Characteristics Services 60% Leading Life insurance technology platform1 ~$75M 75% reduction in time to market revenue Licenses 40% demonstrated ability to deliver 90% 90% reduction of IT cost & 60% on services faster policy conversion
Slide 105: Marketing Solutions
AT A GLANCE Marketing Solutions Marketing Solutions Revenue Split (%) Key Characteristics Transactional 10% Insurance shopping events witnessed 264M in the past year ~$80M average increase in customer acquisition 20% efficiency with no incremental cost revenue Subscriptions 90% earlier indication of
Slide 106: Specialty Business Solutions Today
AT A GLANCE Specialty Business Solutions Today Specialty Business Solutions Revenue Split Key Characteristics (%) Gov't/Other 4% Institutions 2% £13bn+ Premium processed annually Insurers Reinsurers 69% 3% ~$80M +200 Clients revenue Broker / MGA Top Managing Agents & Brokers 22% >85% on our Platform
Slide 107: Panel Discussion: Expanding our Reach in Insurance
Panel Discussion: Expanding our Reach in Insurance Tom Famularo – Managing Director, Life Solutions Matt Lohman – Managing Director, Marketing Solutions Tim Rayner – President, Specialty Business Solutions © Verisk Analytics, Inc. All rights reserved.
Slide 109: Driving Disciplined and Consistent Growth
AGENDA Driving Disciplined and Consistent Growth • Consistent stable growth • Commitment to margin expansion • Disciplined capital allocation • Next 3 years, clear roadmap © Verisk Analytics, Inc. All rights reserved. 109
Slide 110: Consistent & Predictable Revenue Growth Last 15 Years
Consistent & Predictable Revenue Growth Last 15 Years Total Revenue Growth 8.1% CAGR 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Annual OCC% Revenue Growth; Average = 6.9% 8.3% 7.9% 7.6% 7.8% 7.2% 7.2% 7.0% 6.9% 6.9% 6.7% 6.8% 6.5% 6.5% 6-8% 5.3% 5.3% Range 1. x 1. Pro
Slide 111: Advantaged Business Model Drives Strong Economic Value
Advantaged Business Model Drives Strong Economic Value Deliver top line growth, 1 2 Invest in new datasets, strong returns Advantaged Growing technology & products market position recurring revenue 5 3 Strong Operating balance leverage sheet 4 Attractive cash generation Monetize across global indust
Slide 112: Steady and Robust Subscription Revenue Growth
Steady and Robust Subscription Revenue Growth Subscription Revenue Transactional Revenue (81% of Total Revenue) (19% of Total Revenue) OCC Subscription Growth Rate $3,000 OCC Transactional Growth Rate 20.0% 7.2% 7.1% 7.1% 6.9% 6.0% 6.0% 10.0% $2,500 4.7% 0.0% $2,000 8.5% -3.4% CAGR -10.0% $1,500 -20
Slide 113: Faster Growth Businesses Become Larger Contributors Over Time
Faster Growth Businesses Become Larger Contributors Over Time 2022 Growth 2018 14% Growth Verisk 5% $2.4B Growth Rate Penetrated $1.7B 86% Penetrated OCC Growth Rates 95% Penetrated: 5.2% Growth: 18.9% Total: 6.5% OCC Growth Rates Penetrated: 6.9% Growth: 15.1% Total: 7.2% Time © Verisk Analytics, I
Slide 114: Driving Disciplined and Consistent Growth
AGENDA Driving Disciplined and Consistent Growth • Consistent stable growth • Commitment to margin expansion • Disciplined capital allocation • Next 3 years, clear roadmap © Verisk Analytics, Inc. All rights reserved. 114
Slide 115: Margin Expansion Opportunities Across the Business
Margin Expansion Opportunities Across the Business Margin Expansion Progress Third Party Services Headcount 75bps-125bps 150bps-250bps Original 25% 2024 300 – 500 bps Target 50% Savings already actioned: Actioned ~60+% 25% IT Savings 75bps-125bps Savings already Realized realized: ~30+% © Verisk Ana
Slide 116: Confidence in Delivering Margin Goal
Confidence in Delivering Margin Goal ~200-300 bps ~60 bps 53-54% ~30 bps of Non-operational (1) ~30-50 bps ~30 bps of Technology Transformation and T&E 52.0% FY 2022 Core Operations Headwinds Portfolio Mix Shift FY2023 1. x 1. Non-operational includes pension expense © Verisk Analytics, Inc. All rig
Slide 117: Raising the 2024 Margin Target to 54%-56%
Raising the 2024 Margin Target to 54%- 56% 400-500 bps 56% 54% 52.7% 54% 52.0% 53% 50-51% 2021 2022 4Q22 2023 2024 Baseline Actual Actual Guidance Guidance © Verisk Analytics, Inc. All rights reserved. 117
Slide 118: Driving Disciplined and Consistent Growth
AGENDA Driving Disciplined and Consistent Growth • Consistent stable growth • Commitment to margin expansion • Disciplined capital allocation • Next 3 years, clear roadmap © Verisk Analytics, Inc. All rights reserved. 118
Slide 119: Portfolio Actions Drive Step-Up In Return on Invested Capital
Portfolio Actions Drive Step-Up In Return on Invested Capital ROIC Focus ROIC Improvement ✓ Dispositions of energy and financial services segments have driven a step up in return on ~2X invested capital ✓ Prioritizing organic investment in high return projects within insurance 27% ✓ Capital discipli
Slide 120: Clear Capital Allocation Priorities
Clear Capital Allocation Priorities 1 2 3 4 Organic Selective Strong Return Capital Investment M&A Balance Sheet to Shareholders © Verisk Analytics, Inc. All rights reserved. 120
Slide 121: Capex Funded by Strong Cash Flow, Drives Future Growth
1. Capex Funded by Strong Cash Flow, Drives Future Growth Total Capex $200M $95M Internally Developed Software Hardware/Third-Party Software Non-IT 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Capex as a % of Revenue 8.2% 8.8% 7.8% 7.5% 9.1% 10.6% 8.1% 8.6% 8.3% 8.2% © Verisk Analytics, Inc. Al
Slide 122: Invest Organically to Drive Growth
1. Invest Organically to Drive Growth Case Study: Lightspeed Auto Incremental New Sales Customer Benefits >$60M ✓ One Platform for easy data access and API +5X integration ✓ Cuts question count and time to get quotes ✓ Higher conversion rate Financial Results ✓ Strong ROIC profile > 30% ~$12M ✓ Prod
Slide 123: Selective Tuck-in M&A
2. Selective Tuck-in M&A Case Study: FAST Revenue Growth Financials Acquired in ✓ Acquired in 2019 for $193M 2019 ~$75M ✓ Achieved 28% CAGR in revenue since acquisition 28% ‒ Revenue growth accelerated post acquisition CAGR ✓ Improved margin 270 bps over 4 years, while still 4% $35M investing for gr
Slide 124: Maintain Investment Grade Rating and Strong Balance Sheet
3. Maintain Investment Grade Rating and Strong Balance Sheet Investment Grade Target FCF Working Capital Debt Issuer Leverage Generation Efficiency Continue Debt to CAGR last Working Capital to EBITDA Target three years Maintain 2–3X 8.1% Source of Cash © Verisk Analytics, Inc. All rights reserved.
Slide 125: Consistent Return of Capital to Shareholders
4. Consistent Return of Capital to Shareholders Uses of Capital ($M) Capital Returned as % of FCF $2,507 8% Dividend 237% Share 66% repurchases $1,137 $983 $869 $777 75% 62% 63% 64% 57% 18% M&A 20% 23% 8% Capex 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 © Verisk Analytics, Inc. All rights res
Slide 126: Consistently Returned Capital to Shareholders
4. Consistently Returned Capital to Shareholders Dividend per Share Share Repurchases 7.4% CAGR $1.24 $1.16 $2,500 $1.08 Note: Dividend $1.00 increased 10% in 1Q23 $1,663 $439 $475 $300 $349 2019 2020 2021 2022 2018 2019 2020 2021 2022 2023 Repurchases as % of Weighted Avg. Shares Outstanding 2.3% 1
Slide 127: Driving Disciplined and Consistent Growth
AGENDA Driving Disciplined and Consistent Growth • Consistent stable growth • Commitment to margin expansion • Disciplined capital allocation • Next 3 years, clear roadmap © Verisk Analytics, Inc. All rights reserved. 127
Slide 128: Verisk Is a Resilient, Predictable Business
Verisk Is a Resilient, Predictable Business Subscription revenue >80% Product usage Mission critical Retention rate 95+% Proven resilience in Top line growth: GFR 2008 / 2009 ~+5% past downturns Top line growth: Covid 2020 / 2021 ~+6% Lower costs from incentive compensation, headcount Flex factors I
Slide 129: Growth Businesses Become Larger Contributors Over Time
Growth Businesses Become Larger Contributors Over Time Growth ~20% Growth Verisk 14% 2025 Growth Rate Growth 5% 2022 Penetrated ~80% 2018 Penetrated 86% OCC Growth Rates Penetrated: ~5-6% Growth: ~10-15% Penetrated Total: 6-8% 95% Time © Verisk Analytics, Inc. All rights reserved. 129
Slide 130: Multiple Factors Contribute to Revenue Growth
Multiple Factors Contribute to Revenue Growth 150-200 bps 50-150 bps 6-8% Growth 150-200 bps 50-150 bps 300-400 bps $2.4B 2022 Pricing New customers Upsell/Cross Sell New Initiatives Consolidation 2025 © Verisk Analytics, Inc. All rights reserved. 130
Slide 131: Verisk 2025 Financial Targets
Verisk 2025 Financial Targets OCC Revenue OCC EBITDA Adjusted EBITDA Adjusted EPS Growth Growth Margin Expansion Growth 54-56% in 2024 6%-8% 7%-10% +Double Digit annually annually +25-75 bps in 2025 © Verisk Analytics, Inc. All rights reserved. 131
Slide 132: Driving Consistent and Predictable Growth
SUMMARY Driving Consistent and Predictable Growth Long track record of consistent and predictable growth Committed to deliver margin expansion Disciplined capital allocation Multiple factors set to drive accelerated earnings growth going forward © Verisk Analytics, Inc. All rights reserved. 132
Slide 135: Feedback on Today's Event
Feedback on Today’s Event Thank you for joining us for our 2023 Investor Day. We hope you found it informative. Your feedback is important to us, so we would appreciate it if you could fill out a quick survey - it should take only 2-3 minutes. The answers are all anonymous. This survey will be onlin
Slide 136: Delivering the New Verisk: Our Future
IN SUMMARY Delivering the New Verisk: Our Future 1 2 3 Leveraging & Clear growth, Laser focused capitalizing on our profitability and on the Insurance advantaged market capital allocation business position roadmap The New Verisk Focused, Predictable Growth Company © Verisk Analytics, Inc. All rights
Slide 137: Appendix: Supplemental Slides and/or Non-GAAP Reconciliations
Appendix: Supplemental Slides and/or Non-GAAP Reconciliations ©Verisk © Verisk Analytics, Analytics, Inc. Inc. All All rights rights reserved. reserved.
Slide 138: Non-GAAP Reconciliations
Non-GAAP Reconciliations Specified Metrics We have provided certain non-GAAP financial information as supplemental information regarding our operating results. These measures are not in accordance with, or an alternative for, U.S. GAAP and may be different from non-GAAP measures reported by other co
Slide 139: Non-GAAP Reconciliations
Non-GAAP Reconciliations Segment Results and EBITDA | Current and Prior-Year Period Segment Results Summary and FY22 FY21 Adjusted EBITDA Reconciliation Insurance E&SM FS Insurance E&SM FS Revenues $2,437.0M $22.4M $37.6M $2,206.9M $112.8M $142.8M Revenues from acquisitions and dispositions (104.5)
Slide 140: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Net Income/EPS and Free Cash Flow | Current and Prior-Year Period Adjusted Net Income and EPS FY22 FY21 Net income $1,042.1M $607.1M plus: Amortization of intangibles 74.4 79.9 less: Income tax effect on amortization of intangibles (18.6) (20.0) less: Litigation res
Slide 141: Non-GAAP Reconciliations
Non-GAAP Reconciliations 2021 and 2022 Pro Forma Revenues and EBITDA 2022 2021 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY Revenues (Insurance) $586M $610M $610M $630M $2,437M $536M $550M $558M $563M $2,207M Revenues from acquisitions (20) (28) (28) (28) (105) (1) - (0) (2) (3) Organic revenues 567 582 582 602 2,

Verisk Analytics — Investor Day (March 2023) on 6ix

Verisk Analytics — Investor Day (March 2023)

Slide 1: Verisk Analytics Investor Day

Slide 2: Introduction

Slide 3: Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures

Slide 4: Investor Day Agenda

Slide 5: Delivering a Predictable Growth Company

Slide 6: What You Will Hear Today

Slide 7: Delivering a Better Company: What We Have Delivered to Date

Slide 8: Strategic Changes Set Us on a Path To Deliver Predictable Performance

Slide 9: New Verisk: Delivering a Predictable Growth Company

Slide 10: A Strong and Profitable Platform

Slide 11: Delivers Solid and Consistent Growth

Slide 12: We Serve the Global Insurance Industry

Slide 13: Deep Data to Power Better Insurance Decisions

Slide 14: Advantaged Business Model Drives Strong Economic Value

Slide 15: The New Verisk – Building on 50 Years in Insurance

Slide 16: Next Generation of Management Brings New Energy and Ideas

Slide 17: Clearly Defined Strategic Operating Goals

Slide 18: New Verisk: Delivering a Predictable Growth Company

Slide 19: US Insurance: A Scaled Industry That Plays A Critical Role in the Economy

Slide 20: Global Market Provides A Huge Runway for Growth

Slide 21: Industry Challenges

Slide 22: Steve Rulison, Liberty Mutual Insurance

Slide 23: New Verisk: Delivering a Predictable Growth Company

Slide 24: Verisk is at the Center of a Large, Complex Ecosystem

Slide 25: Well-Positioned in Large and Growing Markets

Slide 26: Verisk Competitive Advantages We Are Building On

Slide 27: New Verisk: Delivering a Predictable Growth Company

Slide 28: Three Key Priorities

Slide 29: Drive Consistent and Predictable Growth by Extending Our Reach within Insurance

Slide 30: Drive Consistent Growth Through Cross Sell of Existing Solutions

Slide 31: Drive Consistent and Predictable Growth Through Innovation

Slide 32: Multiple Levers of Margin Expansion

Slide 33: Ensure Disciplined Capital Allocation

Slide 34: Verisk 2025 Financial Targets

Slide 35: Delivering the New Verisk: Our Future

Slide 36: Modernizing and Pressing Our Competitive Positioning

Slide 37: Jim Haggerty, QBE

Slide 38: Modernizing and Pressing Our Competitive Positioning

Slide 39: Underwriting Solutions is a One-of-a-Kind Business

Slide 40: Solid and Consistent Financial Performance

Slide 41: Our Goal is to Drive Transformation in the Insurance Industry

Slide 42: Complete Offering Helps Insurers Understand and Price Risk

Slide 43: Modernizing and Pressing Our Competitive Positioning

Slide 44: U.S. P&C Market Provides a Runway for Stable Growth

Slide 45: U.S. P&C Industry Facing Growing Number of Challenges

Slide 46: Modernizing and Pressing Our Competitive Positioning

Slide 47: Large Unpenetrated Addressable Markets for Rapidly Growing Adjacencies

Slide 48: Four Point Plan to Drive Growth

Slide 49: Constantly Upgrading and Evolving Product Drives Growth

Slide 50: Modernizing Forms, Rules, and Loss Costs Will Help

Slide 51: Expanded Data Coverage and Quality Increases Underwriting Accuracy

Slide 52: Data-Forward, Digital Delivery Increases Underwriting Efficiency

Slide 53: Case Study #1: Large Carriers Drive Growth

Slide 54: Case Study #2: Gaining Wallet Share Through Cross-sell

Slide 55: New Growth Vectors: Modernization of the Life Insurance Industry

Slide 56: New Growth Vectors: Vertical Player for Insurance Marketing

Slide 57: New Growth Vectors: Double-Digit International Growth

Slide 58: Underwriting Solutions: How We Will Measure Success

Slide 59: Modernizing and Pressing Our Competitive Advantage

Slide 60: Driving Growth through Strong Execution and Best in Class Science

Slide 61: Driving Growth through Strong Execution and Best in Class Science

Slide 62: Extreme Events Solutions Today

Slide 63: Our Risk Solutions Address the World's Biggest Problems

Slide 64: The World Faces a Wide Range of Extreme Events

Slide 65: Solid and Consistent Financial Performance

Slide 66: Key Strengths

Slide 67: Carl Kearney, CNA Hardy

Slide 68: Driving Growth through Strong Execution and Best in Class Science

Slide 69: Industry Facing Growing Number of Challenges

Slide 70: Actual Insured Losses from Natural Catastrophes Have Doubled

Slide 71: Most Natural Disaster Losses Remain Uninsured

Slide 72: Healthy and Growing $2.5B Addressable Market

Slide 73: Driving Growth through Strong Execution and Best in Class Science

Slide 74: Four Point Plan to Drive Growth

Slide 75: Drive Continued Market Share Gains Within Insurance and Reinsurance

Slide 76: Cross Sell Case Study – End-to-End Data Insight Solutions

Slide 77: Migrate to SaaS Platform to Drive Speed of Innovation

Slide 78: Grow ESG Risk Analytics through Differentiated Offering

Slide 79: Organic New Product Development: OneVerisk for Property Analytics