Verisk Analytics, Inc. · NASDAQ:VRSK
Verisk Analytics — Investor Day (December 2017)
136 slides from Verisk Analytics's investor day presentation, Dec 7, 2017
Slide 1: Investor Day
Investor Day December 7, 2017 © 2017 Verisk Analytics, Inc. All rights reserved. 1
Slide 2: Forward-Looking Statements, Safe Harbor & Non-GAAP Financial Measures
Investor Day 2017 Forward-Looking Statements, Safe Harbor & Non-GAAP Financial Measures Forward-Looking Statements This release contains forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties, and oth
Slide 3: © 2017 Verisk Analytics, Inc. All rights reserved.
© 2017 Verisk Analytics, Inc. All rights reserved. 3
Slide 4: Insurance: Global Growth Opportunities
Insurance: Global Growth Opportunities © 2017 Verisk Analytics, Inc. All rights reserved. 4
Slide 5: Verisk Insurance Solutions Vision
Verisk Insurance Solutions Vision Be our customers’ preferred partner to accelerate innovation, excellence, and profitable growth through data analytics and insights © 2017 Verisk Analytics, Inc. All rights reserved. 5
Slide 6: Verisk Insurance Solutions (VIS)
Verisk Investor Day Insurance 2017 Solutions (VIS) Verisk Insurance Solutions ISO Claims Commercial Lines Claims Analytics Personal Lines Xactware Insurance Solutions Geomni AIR Sequel © 2017 Verisk Analytics, Inc. All rights reserved. 6
Slide 7: Global Insurance Growth Opportunities: Executive Summary
Investor Day 2017 Global Insurance Growth Opportunities: Executive Summary • Increased focus, noteworthy progress past 5 years • Combines organic opportunities and new acquisitions • Global team organized to succeed • Sequel: beachhead for London Market and extensions • Tuck-in acquisitions expand p
Slide 8: Prioritizing Where to Go First Based on Market Dynamics & Clients
Investor Day 2017 Prioritizing Where to Go First Based on Market Dynamics & Clients Relative attractiveness of international markets for Verisk ($) 100% Attractive established markets (DWP) 90% Attractive developing Germany Loss Ratio (3-Year Average) markets (DWP) United States 80% 74B France India
Slide 9: Commercial (Re)Insurance Represents ~50% Global P&C Opportunity
Investor Day 2017 Commercial (Re)Insurance Represents ~50% Global P&C Opportunity Large, stable Verisk core competency (and limited motor exposure) $B GWP 956 2% 2% 8% U.S. 348 14% Africa Australasia Asia & RoW Rest of World = 29% 249 1.75x U.S. Market Other Americas Asia 14% Europe (excl. UK/Irelan
Slide 10: Targets: Large & Underserved Specialty Commercial Markets Outside U.S. & UK
Investor Day 2017 Targets: Large & Underserved Specialty Commercial Markets Outside U.S. & UK Including large international centers (Bermuda, Zurich, Singapore) Source: London Matters 2015 report © 2017 Verisk Analytics, Inc. All rights reserved. 10
Slide 11: Key Global Lines Building Off Verisk Strengths: Casualty & Property
Investor Day 2017 Key Global Lines Building Off Verisk Strengths: Casualty & Property Global commercial industry size (incl. SME) 10% Casualty Line of Global business industry size Other2 Casualty $234B 5% Property $178B Property Other $173B 2015 Global Market size 0% 2015 London Market size Insuran
Slide 12: $2.0B International TAM for Commercial Lines Software & Services
Investor Day 2017 $2.0B International (non-U.S.) TAM for Commercial Lines Software & Services Global Total Addressable Market (TAM) for third-party insurance software for P&C and commercial specialty insurance Based on 2016 DWP, including U.S. Third-party software spend — P&C insurers $1.3B $0.7B $4
Slide 13: Global Opportunity: Connected across Lines, Geographies, Capabilities
Investor Day 2017 Global Opportunity: Connected across Lines, Geographies, Capabilities Broadening our definition of P&C to address global client needs across underwriting & claims Complex Specialized Motor & Small & Medium Commercial Enterprise & Specialty Regulatory Software Reporting Commercial C
Slide 14: Range of Build/Partnerships/Acquisitions Can Augment Our Global Data Sets
Investor Day 2017 Range of Build/Partnerships/Acquisitions Can Augment Our Global Data Sets Class of Property Terrorism Offshore Onshore Marine & E&O and EPL & Casualty Cyber E&S Others1 Business Energy Energy Cargo D&O Workers Verisk Before Pursuit of Data + Analytics + Scenarios + Models Integrate
Slide 15: Recent M&A Has Expanded Verisk International Platform
Investor Day 2017 Recent M&A Has Expanded Verisk International Platform Acquisition Strategic Rationale Overview Platform extension & Sequel Leading insurance & reinsurance software specialist global focus Risk Intelligence Fraud detection, compliance, risk control & process Global focus Ireland aut
Slide 16: Sequel: Global Opportunity, Coordinated Approach
Investor Day 2017 Sequel: Global Opportunity, Coordinated Approach across Verisk Insurance Solutions • Sequel customers and insurance market welcome combined capabilities • Addresses large market opportunity in complex specialty commercial insurance • Functional integration proceeding well • Excitin
Slide 17: International Solution Set & Target Markets 2017 (Today)
Investor Day 2017 International Solution Set & Target Markets 2017 (Today) Solution Set Complex Global Extreme Property Auto Cat Claims Verisk Risk Specialty Actuarial/ Property IoT/ Event Models Claims Claims Reporting Rating (Healix Commercial Data (for (Underwriters Telematics (AIR) (Xactware) (C
Slide 18: Insurance: Global Presence, Organized to Succeed
Investor Day 2017 Insurance: Global Presence, Organized to Succeed Offices in 13 countries Supporting Growth Business Unit Global Corporate Country Leadership Development Team Global Business Development United France Germany Singapore China Japan Australia Canada Kingdom © 2017 Verisk Analytics, In
Slide 19: International: Product Coverage & Customers Served (2012)
Investor Day 2017 International: Product Coverage & Customers Served Yesterday (2012) AIR Countries Modeled 2012 Countries (81 Total) • UK: Lloyds Participation, Xactware, COA • Canada, Japan: International Participation • Israel: ISO ClaimSearch © 2017 Verisk Analytics, Inc. All rights reserved. 19
Slide 20: International: Product Coverage & Customers Served (2017)
Investor Day 2017 International: Product Coverage & Customers Served Today (2017) AIR Countries Modeled • UK: Geo Info/Global Property, Healix, • Germany, Australia: Claims Analytics 2012 Countries (81 Total) ENI, Sequel, ClaimX, ISO • Belgium, France: Claims Analytics, • Canada: Participation, Heal
Slide 21: International: Product Coverage & Customers Served (2022)
Investor Day 2017 International: Product Coverage & Customers Served Tomorrow (2022) AIR Countries Modeled 2012 Countries (81 Total) 2017 Countries (106 Total) • India, China: priority markets in the future 2022 Countries (123 Total) © 2017 Verisk Analytics, Inc. All rights reserved. 21
Slide 22: Better today than yesterday, but not as good as tomorrow
Investor Day 2017 Global Insurance Growth Opportunities “Better today than yesterday, but not as good as tomorrow” 2012 2017 2022 Revenue $70M $130M ~$230 Path to Grow • Unique capabilities (replicate and localize U.S. solutions) • Follow our customers • Domain expertise from across Verisk • Local a
Slide 23: Global Property Underwriting Solutions
Global Property Underwriting Solutions © 2017 Verisk Analytics, Inc. All rights reserved. 23
Slide 24: To Effectively Underwrite and Price Property Risks, Insurers Typically Use…
Investor Day 2017 To Effectively Underwrite and Price Property Risks, Insurers Typically Use… Reconstruction cost Community fire response Property-specific details Occupancy capability details Information on local perils estimates • Type of construction • Building uses • Estimated replacement • Type
Slide 25: Verisk Is Their Source for This Information in the United States
Investor Day 2017 …And Verisk Is Their Source for This Information in the United States Capturing building features for more Monitoring the Identifying 26 million Tracking the than 90 million costs of more than Assessing the businesses and ability of more than residential and 4,000 labor and wildfir
Slide 26: This Building
This Building This building: Construction Relative Hazard Percentile 89thPercentile • Fire resistive (Class 6 – our highest class) • Excellent resistance to fire and wind damage • 28 stories high • Total floor area ~ 450,000 ft2 0 Percentile 42nd Percentile 50th Percentile 100th Percentile • Year bu
Slide 27: Getting Accurate Property Information Is a Major Obstacle for Insurers
Investor Day 2017 Getting Accurate Information about the Underlying Property Is a Major Obstacle for Insurers Especially outside the U.S. • Expensive to conduct on-site inspections • Reliance on inaccurate information to make decisions • Limited use of data and analytics outside the U.S. • Financial
Slide 28: Global Property Solution Relies on High-Resolution Aerial Imagery
Investor Day 2017 Verisk’s Global Property Solution Relies on High-Resolution Aerial Imagery… In geographies where collection of aerial imagery is not possible, rely on high-resolution satellite imagery © 2017 Verisk Analytics, Inc. All rights reserved. 28
Slide 29: High-Resolution Lidar for Estimating Building Height
Investor Day 2017 ...High-Resolution Lidar for Estimating Building Height... © 2017 Verisk Analytics, Inc. All rights reserved. 29
Slide 30: Visual Identification for Capturing Building Features
Investor Day 2017 …Visual Identification for Capturing Building Features and Categorization and… • Data collection team with more than 20 years of experience • Footprints digitized manually at 1:1,000 scale from 10cm resolution imagery • Validated against ground surveys of thousands of buildings sam
Slide 31: Proven Methods and Intellectual Property Leveraged Internationally
Investor Day 2017 Proven Methods and Intellectual Property Leveraged Internationally Specific Commercial Property Evaluation Schedule (SCOPES) Methodology • Used to create loss costs that are filed in the U.S. • Combines engineering and actuarial analysis: − Recognizes individual variations of loss
Slide 32: Solution Built on Recently Acquired Capabilities in the UK
Investor Day 2017 Verisk’s Solution Is Built on Recently Acquired Capabilities in the UK GeoInformation Group – Leading creator of geospatial solutions • Established in 1998, owns a unique array of map data collected by its widely respected technical team • Award-winning innovators in aerial survey
Slide 33: Underwriters Advantage: Extending Our U.S. Capability to New Markets
Investor Day 2017 Underwriters Advantage: Extending Our U.S. Capability to New Markets Leadenhall Market, London, England Overview Occupancy • Retail hub of 10 properties within a • ~100 independent and high street shops, spectacular Victorian market setting offices, and a wide variety of bars, pubs
Slide 34: Underwriters Advantage: Critical Underwriting Information Worldwide
Investor Day 2017 Underwriters Advantage: Provides Critical Underwriting Information for Properties Worldwide United Kingdom Phase 2: Canada Phase 2: Germany Phase 3: China Phase 1: France Hong Kong Singapore Phase 1: Australia Global Addressable Market: $300M+ © 2017 Verisk Analytics, Inc. All righ
Slide 35: Global Property Solution Helps Insurers Gain a Competitive Edge
Investor Day 2017 Verisk’s Global Property Solution Is Designed to Help Insurers Gain a Competitive Edge through Property Intelligence across the Globe Building information Compliance & Community regulatory information (fire, crime) reporting Cost-to- Portfolio rebuild mgmt. estimates Fire Analytics
Slide 36: Extreme Event Modeling
Extreme Event Modeling © 2017 Verisk Analytics, Inc. All rights reserved. 36
Slide 37: Higher 2017 Natural Catastrophe Losses Will Benefit (Re)Insurance Markets
Investor Day 2017 Higher 2017 Natural Catastrophe Losses Will Benefit (Re)Insurance Markets Losses (USD Billions) 140 120 100 80 60 40 20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (F) Source: I.I.I., Swiss Re, Verisk © 2017 Verisk Analytics, Inc. All rights reserved. 37
Slide 38: Underinsurance of Catastrophe Risk Presents Growth Opportunity
Investor Day 2017 Underinsurance of Catastrophe Risk Presents Growth Opportunity 62 280Insured Insured 61 Insured 218 Uninsured 679Uninsured 618 Insured 209 Insured 549 Uninsured 340 Insured 24 Insured 65 Insured 41 Uninsured 40 Insured 284 Insured 244 Uninsured © 2017 Verisk Analytics, Inc. All rig
Slide 39: AIR Has Expanded Its Extreme Event Portfolio beyond Natural Catastrophes
Investor Day 2017 AIR Has Expanded Its Extreme Event Portfolio beyond Natural Catastrophes Natural Catastrophes Crop and Agriculture Terrorism & Political Risk Life & Health Casualty & Cyber © 2017 Verisk Analytics, Inc. All rights reserved. 39
Slide 40: Casualty Catastrophes Represent a Large, Untapped Opportunity
Investor Day 2017 Casualty Catastrophes Represent a Large, Untapped Opportunity Global Insurance Premiums $178B $234B Liability Property & Other Lines • TAM: $185 million • Intuitive framework to assess risk across all casualty lines • Calculate portfolio loss for historical or emerging casualty acc
Slide 41: Targeting a $200M Rapidly Growing Market for Cyber Insurance
Investor Day 2017 Targeting a $200M Rapidly Growing Market for Cyber Insurance Cyber Risk Solutions across Insurance Value Chain Product Development Marketing Underwriting Claims Management Compliance Portfolio Analysis Risk Transfer Insurance Solutions Insurance Solutions Enabling Growth of Cyber I
Slide 42: Executing Comprehensive Strategy for Extreme Event Analytics
Investor Day 2017 Executing Comprehensive Strategy for Extreme Event Analytics Upstream Analytics More Natural Peril Models Downstream Analytics Exposure Management Insurance Solutions Real-Time Pricing and Portfolio Analytics Underwriting Models for Extreme Events Portfolio Optimization © 2017 Veri
Slide 43: Touchstone Provides Industry an Enterprise Modeling Platform
Investor Day 2017 Touchstone Provides Industry an Enterprise Modeling Platform Access to Comparative Multiple Models Analytics Underwriting Loss Analytics w/ Uncertainty Touchstone Re Data Quality Loss Hazard Geospatial Non-Cat Analyze Analytics Grouping Analytics Analytics Analytics Re © 2017 Veris
Slide 44: Growth Initiative: Advanced Portfolio Analytics
Investor Day 2017 Growth Initiative: Advanced Portfolio Analytics 200 Reinsurers, Lloyds Syndicates Grow Customer Base Alternative Channels 1000+ Insurers, MGAs • Ensure new client • Trading platforms integrations successful Wider • Other reinsurance Capital Markets, • Leverage very satisfied platfo
Slide 45: Global Resilience Practice Aims at Protection Gap
Investor Day 2017 Global Resilience Practice Aims at Protection Gap Provide governments and nongovernmental organizations with solutions to help better prepare for and recover from disasters Identify and quantify risks to Evaluate mitigation Inform disaster finance populations and infrastructure str
Slide 46: AIR Positioned for Growth
Investor Day 2017 AIR Positioned for Growth • Strong suite of core catastrophe models • New extreme event models, including cyber and casualty, significantly expand our runway • Growing competitive positioning resulting from historic investment in Touchstone • Strong collaboration across Verisk’s in
Slide 47: Insurance Claims: Opportunities for Growth
Insurance Claims: Opportunities for Growth © 2017 Verisk Analytics, Inc. All rights reserved. 47
Slide 48: P&C Insurance Claims Fraud: A $34 Billion Problem
Investor Day 2017 Property & Casualty Insurance Claims Fraud: A $34 Billion Problem • Estimated that 10% of claims costs result from fraud • Affects all lines of insurance $600B • Policyholders, claimants, and service providers can be perpetrators • Increasingly sophisticated attacks by organized cr
Slide 49: ISO ClaimSearch Database: The Leader in Insurance Fraud Detection
Investor Day 2017 ISO ClaimSearch Database: The Leader in Insurance Fraud Detection and Mitigation • Only industrywide claims database used for claims fraud detection • ~95% market penetration • All major P&C lines of insurance ⎯ Auto ⎯ Property ⎯ Liability • Deeply integrated into insurers’ systems
Slide 50: ISO ClaimSearch Platform: Upsell and Cross-Sell Opportunities
Investor Day 2017 The ISO ClaimSearch Platform: Many Upsell and Cross-Sell Opportunities $600B © 2017 Verisk Analytics, Inc. All rights reserved. 50
Slide 51: New Visualized ISO ClaimSearch User Experience
Investor Day 2017 New Visualized ISO ClaimSearch User Experience © 2017 Verisk Analytics, Inc. All rights reserved. 51
Slide 52: Verisk Claims Extensions: Additional Growth Drivers
Investor Day 2017 Verisk Claims Extensions: Additional Growth Drivers IoT & Telematics Solutions Growing Auto Verisk Claims – International Claims Presence Analytics ISO poised for growth ClaimSearch Platform Property Liability Claims Claims Analytics Analytics Workers Comp Claims Analytics © 2017 V
Slide 53: © 2017 Verisk Analytics, Inc. All rights reserved.
© 2017 Verisk Analytics, Inc. All rights reserved. 53
Slide 54: Geomni: Insurance Applications
Geomni: Insurance Applications © 2017 Verisk Analytics, Inc. All rights reserved. 54
Slide 55: Geomni Overview: Image Acquisition to Customer Solution
Investor Day 2017 Geomni Overview: Image Acquisition to Customer Solution © 2017 Verisk Analytics, Inc. All rights reserved. 55
Slide 56: How Will Geomni Achieve High Growth?
Investor Day 2017 How Will Geomni Achieve High Growth? • Continue smart, measured, operational ramp-up • Engage Verisk insurance client base, facilitate key partnerships • Expand on financial services and banking platforms (real estate and mortgage focus) *Photogrammetry, Survey, and Mapping departm
Slide 57: Xactware Insurance Market Presence Provides Ready Market for Geomni
Investor Day 2017 Xactware Insurance Market Presence Provides Ready Market for Geomni Tools • Industry-standard claims platform • 85% market share (North America) • 23 of top 25 U.S. insurance carrier customers • Most widely accepted building cost data in the industry © 2017 Verisk Analytics, Inc. A
Slide 58: Geomni Solutions Distributed through Xactware Platform
Investor Day 2017 Geomni Solutions Distributed through Industry-Standard Xactware Platform Conventional Estimating Automation • Measurements taken • Measurements obtained • Software assisted • Models created • Cost data applied • Imagery forensics applied • Estimate created / claim settled • Claim s
Slide 59: Continual Refresh of North American Aerial Imagery Baseline
Investor Day 2017 Geomni Plan Includes Continual Refresh of North American Aerial Imagery Baseline Oblique imagery Ortho imagery © 2017 Verisk Analytics, Inc. All rights reserved. 59
Slide 60: Post-Catastrophe Image Capture Adds Value for Customers
Investor Day 2017 Post-Catastrophe Image Capture Adds Value for Customers Hurricane Harvey, landfall in Texas Hurricane Irma, landfall in Florida Aug 26 – Sept 2 Sept 10 – Sept 12 • Geomni response began Aug 17, • Geomni response began Aug 30, 2 aircraft 9 aircraft • Acquired >1,850 sq miles 3" GSD
Slide 61: Post-Catastrophe Image Capture: Adapted to Serve Customer Needs
Investor Day 2017 Post-Catastrophe Image Capture: Geomni Adapted to Serve Customer Needs Financial Services: Puerto Rico Oct 19–20 • Florida crew mobilized ⎻ San Juan, Caguas, Ponce, Vega Baja, Aguadilla, Mayagüez, and Cabo Rojo ⎻ Acquiring 3.0" GSD oblique imagery ⎻ 480 sq miles ⎻ Difficult logisti
Slide 62: Technology Focus Includes Aerial, Drone, Mobile & Image Analytics
Investor Day 2017 Technology Focus Includes Aerial, Drone, Mobile & Large-Scale Image Analytics Insurance providers desire imagery to drive their machine-learning analysis teams. Aerial Roof & Property Aerial Roof & Property Detailed Information Pre-Analysis at Scale UAV Inspection Ground-Based Prop
Slide 63: Geomni Solutions
Investor Day 2017 Geomni Solutions For P&C Insurance and Property Professionals • Geomni Roof • Geomni Property – Aerial imagery library baseline – Post-catastrophe imagery – UAV (drone) inspection service imagery – Handheld app imagery • Property Essentials • Image Inspection • Assisted Estimating
Slide 64: Geomni Applied
Investor Day 2017 Geomni Applied Initial insurance-based solution helping to automate claims, now expanding solution for full life cycle Using ground-truth data from policy quote to claim Quote Bind Renewal/Ad Hoc Claim • Imagery-interpreted • Virtual inspection • Policy renewal ITV • Images, dimens
Slide 65: Analyzing Millions of Locations: Damage Detection
Investor Day 2017 Analyzing Millions of Locations during Image Acquisition Process Damage detection: Use cases include claims, emergency response, financial services, and more © 2017 Verisk Analytics, Inc. All rights reserved. 65
Slide 66: Analyzing Millions of Locations: Change Detection
Investor Day 2017 Analyzing Millions of Locations during Image Acquisition Process Change detection: Use cases include claims, underwriting, banking, real estate, tax assessment, and more © 2017 Verisk Analytics, Inc. All rights reserved. 66
Slide 67: > $2B Total Addressable Market – Insurance Segment Foundational
Investor Day 2017 > $2B Total Addressable Market – Insurance Segment Foundational Geomni’s modern and efficient fleet helps insurance and even larger end markets P&C Insurance > 200M RGB colorized point cloud created from Geomni sensor: Fort Detrick, Frederick, MD Government > 700M Construction > 50
Slide 68: Insurance Q&A
Insurance Q&A © 2017 Verisk Analytics, Inc. All rights reserved. 68
Slide 69: Wood Mackenzie: Power to Grow
Wood Mackenzie: Power to Grow © 2017 Verisk Analytics, Inc. All rights reserved. 69
Slide 70: Vision: The world's most trusted partner for natural resources intelligence
Investor Day 2017 Vision The world’s most trusted partner for natural resources intelligence. Powering the best decisions, leading our industry. © 2017 Verisk Analytics, Inc. All rights reserved. 70
Slide 71: New Content Areas Are an Incremental Driver of Long-Term Growth
Investor Day 2017 Wood Mackenzie: New Content Areas Are an Incremental Driver of Long-Term Growth • WM Core Research Subscriptions – Resilient & embedded: 97%+ retention 14% – 2017 Q3 YTD renewals up 5%+ • Client Advisory & Consulting 16% – Paid R&D for the Core – Brand enhancement through thought l
Slide 72: What Makes Wood Mackenzie Different from Clients' Perspective
Investor Day 2017 What Makes Wood Mackenzie Different from Our Clients’ Perspective… Consistently strong “Net Promoter Scores” demonstrate why Wood Mackenzie is the “Most Trusted Partner” Strong Net Promoter Scores from Client Survey Global perspective, founded upon local insight Truly integrated al
Slide 73: Industrial Clients Have Readjusted Cost Base
Investor Day 2017 Strengthening End Market: Industrial Clients Have Readjusted Cost Base to Generate Free Cash at Lower Commodity Prices The industry has driven cash flow break-evens from $90B to $53B since the oil price crash, heralding a tentative increase in investment Breakdown of Brent price ne
Slide 74: Wood Mackenzie Strategy Growth Drivers
Investor Day 2017 Wood Mackenzie Strategy Growth Drivers Data Expand New Enhanced M&A Strategy Content Analytic Sales and Capabilities Platform © 2017 Verisk Analytics, Inc. All rights reserved. 74
Slide 75: Data Strategy and Analytical Platforms: Leveraging Verisk's Capabilities
Investor Day 2017 Data Strategy and Analytical Platforms: Leveraging Verisk’s Capabilities Data, models, and applications that are… Applications and Composite Solutions • Integrated • Accessible Web / Portal Mobile Applications FTP RESTApi • Timely Modeling • Clean Sources Data API Gateway • Trusted
Slide 76: Focus on High-Impact Markets within a $5.5B TAM
Investor Day 2017 Focus on High-Impact Markets within a $5.5B TAM Core Commercial Subsurface Leveraging PetroView acquisition & heritage products $1B $1B TAM TAM Chemicals Power and Renewables Complementing our heritage chemicals offerings Developing a unique offering through combining our heritage
Slide 77: Combined Verisk, Wood Mackenzie Well Positioned for Data Analytics Focus
Investor Day 2017 Combined Verisk, Wood Mackenzie Well Positioned for Clients’ Data Analytics Focus Industry Trends Wood Mackenzie’s Unique Selling Points in Analytics • Natural resources industries investing in Several hundred domain experts with deep client digitalization, data, and analytics rela
Slide 78: Significant Long Tail Opportunity Addressed via Enhanced Sales Channels
Investor Day 2017 Significant “Long Tail” Opportunity Addressed via Enhanced Sales Channels Annual Research Revenue by Client Type Strategic Basic Priority (Long Tail) 15% 14% Revenue per Client Local 19% Major 38% Mid-Market 14% 0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 Ranked Number of
Slide 79: Leadership Team Delivering on Strategic Growth Drivers
Investor Day 2017 Leadership Team Delivering on Strategic Growth Drivers Great Leadership Talent Expert and Experienced Leadership Team Executing Strategy President Head of Research Head of Sales Head of Consulting Prior experience: Geologist Prior experience: Geologist Wood Mac: 7 yrs Research & Pr
Slide 80: Track Record of Delivery Continued in 2017
Investor Day 2017 Track Record of Delivery Continued in 2017 with Significant New Solutions Coming to Market Woodmac.com & e-commerce UCV – Upstream Company Valuation L48 Contour Tool E2MAS – Oil, Gas, Refining & Coal Supply Models © 2017 Verisk Analytics, Inc. All rights reserved. 80
Slide 81: Clients Trust Wood Mackenzie Data, Analysis, Insight, and Advice
Investor Day 2017 Our Clients Trust Wood Mackenzie Data, Analysis, Insight, and Advice to Power Their Most Important Decisions Example: Downstream Suite – Macro Oils & Oil Supply Tool Market Analysts, Key Users Planners Product: Macro Oils & OST – powers oil market outlooks Short- and Long-Term Work
Slide 82: Wood Mackenzie with Greentech Media, MAKE
Investor Day 2017 Wood Mackenzie with Greentech Media, MAKE Leading Insight for the New Energy Economy • Leaders in renewables, electric vehicle • Unparalleled knowledge in energy and demand, and off-grid storage metals supply and demand • Over 75 sector-dedicated analysts and • Sharing knowledge an
Slide 83: Wood Mackenzie Chemicals
Investor Day 2017 Wood Mackenzie Chemicals: Upstream to Chemicals, Polymers, and Fibers • A network of 80 analysts embedded in • Content delivered in various forms to meet markets worldwide clients’ needs: extensive subscription services, bespoke consultancy, and dedicated online • 30+ years of deta
Slide 84: Significantly Outperformed the Industry and Peer in the Downcycle
Investor Day 2017 Significantly Outperformed the Industry and Peer in the Downcycle 2015 2016 YTD Q3’2017 Revenue Growth (YoY%), CY constant FX Revenue Growth (YoY%), CY constant FX Revenue Growth (YoY%), CY constant FX 6% 5% 5% 1% 8% 4% 5% 4% 2% 1% 1% 1% -4% -5% -9% -3% -3% -1% Source: SEC filings,
Slide 85: Wood Mackenzie: Power to Grow
Investor Day 2017 Wood Mackenzie: Power to Grow Wood Mackenzie’s client credibility, unique data sets, and insights have ensured our success over the challenging commodity downturn We are laying the foundations for growth over the medium and long term: • Data and analytical platforming • Expanding i
Slide 86: Wood Mackenzie: Power to Grow Q&A
Wood Mackenzie: Power to Grow Q&A © 2017 Verisk Analytics, Inc. All rights reserved. 86
Slide 87: Financial Services: New Opportunities
Financial Services: New Opportunities © 2017 Verisk Analytics, Inc. All rights reserved. 87
Slide 88: Summary: Growth Strategy Validated by Recent Successes
Investor Day 2017 Summary: Growth Strategy Validated by Recent Successes Improving Client Retention 96% • Eight (8) significant multiyear 95% 94% agreements in last 3 months • 2018 bookings already +$13M over 1/1/2017 2015 2016 2017YTD • 100% of top 10 bank clients; More Clients growth from multiple
Slide 89: Unique & Proprietary Data Sets
Investor Day 2017 Unique & Proprietary Data Sets Contributory Data Sets Evolved Well Beyond Payments Retail CRAs & Banks Alt & SMB Property & Value Issuers & TV Nat’l, Local & Retailers & Lenders Merchants Argus Cable “Give-Get” Mobility Geospatial Consortia* Payroll & Payment Digital Networks Media
Slide 90: New Acquisitions: Argus G2
Investor Day 2017 New Acquisitions Argus G2 Bellevue, WA “Make Internet Safer for E-Commerce” Illicit Goods & Services, Transaction Laundering, Hate Propaganda Acquirers, Processors, Banks & Networks Money Laundering Scoring Models Launderers Illicit Merchants Onboarding Transaction Laundering 694 1
Slide 91: New Acquisitions: Argus LCI
Investor Day 2017 New Acquisitions Argus LCI Burlingame, CA • CRA Data • BK Outcomes “Loss Mitigation & Case Management” • Pricing • Term Details Automated & Cloud-Based Case Management Solutions • Recoveries • Profitability Lenders, Debt Servicers, Utilities… • Collections • 25+ Yr History Bankrupt
Slide 92: Client Sectors: Remapping the Markets We Serve
Investor Day 2017 Client Sectors: Remapping the Markets We Serve Expanding Scope of the Problem Statement ($5B+ TAM) Core Platforms & Media & Banking Compliance Marketing Financial Resource Targeting & Inclusion Intensive Effectiveness TAM $0.9B TAM $2.5B* TAM $1.2B** Merchants & Site Panel Selectio
Slide 93: Core Banking ($0.9B TAM)
Investor Day 2017 Core Banking ($0.9B TAM) Scaling Distribution via Bank Processor Relationships Strategy Drivers • Codevelopment & turnkey distribution • Five partnerships, turnkey access to 10,000+ FIs; already booking clients PROCESSOR Analytics Turnkey Solutions & IP Delivery • Benefits: Workflo
Slide 94: Core Banking: Products & Services Benchmarking
Investor Day 2017 Core Banking ($0.9B TAM, contd.) Products & Services Credit Card CCPS International (x-U.S.) Presence Study Checking & DAPS Deposits Personal Benchmarking PILS Fintellix Platform & India Loans Private Label PLCS Resource Pool GRC Cards South Korea Small Business Enabling Efficient
Slide 95: Core Banking: New Range of High-Impact Decisioning Algorithms
Investor Day 2017 Core Banking ($0.9B TAM, contd.) New Range of High-Impact Decisioning Algorithms Risk Suite Fraud Suite Nonpayment of Loans Intentional Abuse or Nonpayment • Deposit Relationship • Transaction Launderers • Portfolio Loss (CECL) • Bounced Check • Prior Bankruptcy Rejects 1 99 • Iden
Slide 96: Platforms & Compliance ($2.5B TAM)
Investor Day 2017 Platforms & Compliance ($2.5B TAM) International Demand to Drive Growth EASY Strategy Drivers POINT ‘BLACK BOX’ FLEXIBLE SPECIALIZED • Flexible & Specialized • Domain Expertise Managing Change FS Analytical Apps • Business User-Centric • Multiple Functionalities REQUIREMENTS BUILD
Slide 97: Media & Marketing ($1.2B TAM)
Investor Day 2017 Media & Marketing ($1.2B TAM) Expanding Measurement of Audience across Channels Strategy Drivers Digital • Privacy & confidentiality protected measurement Radio Mobile Local In-App Ads • Broadening consortia to new proprietary data partners Television Print National & Local Newspap
Slide 98: Merchants & Site Selection ($0.4B TAM)
Investor Day 2017 Merchants & Site Selection ($0.4B TAM) Optimizing Merchant Location & Site Selection Merchants, Sports & Entertainment Columbus, Ohio. Source: Geomni • Site Location Analytics • Aerial Imagery & Attributes (Geomni) • Customer Insights • Sports & Entertainment Consortia • Shrink Red
Slide 99: Panel Scoring ($0.9B TAM)
Investor Day 2017 Panel Scoring ($0.9B TAM) Enhancing Panel-Based Market Research & Investment Research Dynamic Scoring Factor Algorithms Pixilation & De-Bias at Scale Unadjusted (Apparel) Post-Panel Scoring PARTNER ARGUS PANEL SCORED Unadjusted (Auto Parts) Post-Panel Scoring PARTNER ARGUS PANEL SC
Slide 100: Closing Summary
Investor Day 2017 Closing Summary Multiple Paths to Growth, Next Five Years Upside Looking Forward Base • Exciting new products & synergies starting to show • Opening new markets, closing partnerships & winning clients • Scaling go-to-market strategy, global workforce & sales force • Unmatched disti
Slide 101: Financial Services: New Opportunities Q&A
Financial Services: New Opportunities Q&A © 2017 Verisk Analytics, Inc. All rights reserved. 101
Slide 102: © 2017 Verisk Analytics, Inc. All rights reserved.
© 2017 Verisk Analytics, Inc. All rights reserved. 102
Slide 103: Strategy and Capital Allocation
Strategy and Capital Allocation © 2017 Verisk Analytics, Inc. All rights reserved. 103
Slide 104: Moated
Investor Day 2017 Vertical Expertise Contributory Data Deeply Integrated Global Synergies MOATED © 2017 Verisk Analytics, Inc. All rights reserved. 104
Slide 105: Platformed and Embedded
Investor Day 2017 Platformed and Embedded ISO VIS Claims AIR Sequel Argus WoodMac Platformed Software-Based Embedded Irreplaceable © 2017 Verisk Analytics, Inc. All rights reserved. 105
Slide 106: Synergies
Investor Day 2017 Synergies CAPABILITY REPURPOSED Fintellix Method London Insurance Market Verisk CIO WoodMac Moving on Large-Scale Data Integration WoodMac Global Smooth Integration of Sequel Argus Media Effectiveness New Pitch to Insurers WoodMac Energy Expertise New Energy Insurance Products © 20
Slide 107: Moated Strong Financial Performance: Model Target Outcomes
Investor Day 2017 MODEL TARGET OUTCOMES Vertical Expertise Contributory Deeply ORGANIC REVENUE GROWTH Data Integrated 7-8% on average, over time ORGANIC EBITDA GROWTH 1-2 pts faster than revenue growth Global Synergies ADJUSTED EPS Double-digit growth MOATED STRONG FINANCIAL PERFORMANCE © 2017 Veris
Slide 108: Customer and Employee Engagement Goals
Investor Day 2017 Customer and Employee Engagement Goals Promoters 9–10 Passives 7–8 Detractors 0–6 NPS 40+ Employee 95% Engagement 67 “A” Player Retention % Global 25% © 2017 Verisk Analytics, Inc. All rights reserved. 108
Slide 109: 84 VLI Distinctives
Investor Day 2017 2013–2017 Distinctives 4% % non-U.S. 25% Methods People Cloud Computing 84VLI STEWARDS Driving Future Governance Investment Results CapEx 3% 8% of revenue of revenue ESG Annual Report © 2017 Verisk Analytics, Inc. All rights reserved. 109
Slide 110: Anticipated CapEx as a Percent of Revenue
Investor Day 2017 Anticipated CapEx as a Percent of Revenue, While Open to Productive Investments That Generate Good Returns 9.0% 8.7% 8.5% 8.0% 8.0% 7.9% 7.8% 7.5% 7.3% 7.0% 6.5% 6.0% 5-6% 5.5% 5.0% 2013 2014 2015 2016 2017 F 2018 2019 2020 2021 2022 Notes: 2017 based on street consensus © 2017 Ver
Slide 111: Capital Allocation 2002–2017
Investor Day 2017 Capital Allocation 2002–2017 $ Billions 2002-2012 2013 2014 2015 2016 2017 Total Buybacks 2.6 0.3 0.8 0.0 0.3 0.3 4.2 M&A 2.0 0.0 0.0 2.9 0.1 0.9 5.8 Total 4.5 0.3 0.8 2.9 0.4 1.2 10.1 Historically balanced; will vary based on return opportunities Notes: Through Q3 2017 plus PowerA
Slide 112: Buyback Performance
Investor Day 2017 Buyback Performance Year Shares (M) Dollars ($M) IRR (%) 2010 15.1 437 19 2011 11.3 382 19 2012 3.5 163 15 2013 4.5 279 12 2014 10.8 778 13 2015 1.1 20 14 2016 4.3 327 24 2017 YTD 3.4 276 19 Notes: IRR is calculated using value at buyback and December 01, 2017, stock price ($95.64)
Slide 113: M&A 2002–2017
Investor Day 2017 M&A 2002–2017 # $B IRR* Deals > $100 million 6 $4.1 19% 2002–2016 Deals < $100 million 35 $0.8 12% 2002–2016 Deals > $100 million 4 $0.8 N/M 2017 Notes: See appendix for IRR methodology. * Deals > $100M include Wood Mackenzie and tuck-ins, Argus and pre-2017 tuck-ins, and all healt
Slide 114: Deals > $100 Million, 2002–2016
Investor Day 2017 Deals > $100 Million, 2002–2016 IRR through 2017F Cash 3rd-Year Cash Name Date 2017(%) ROIC (%) ROIC (%) AIR 2002 27 31 15 Xactware 2006 29 27 12 3E Company 2010 18 12 10 MediConnect 2012 N/A N/A 10 Argus 2012 19 10 10 Wood Mackenzie 2015 N/M 4 N/A Notes: MediConnect reflects all h
Slide 115: Wood Mackenzie Gathering Momentum
Investor Day 2017 Wood Mackenzie Gathering Momentum "Designed by Bedneyimages / Freepik" © 2017 Verisk Analytics, Inc. All rights reserved. 115
Slide 116: PowerAdvocate
Investor Day 2017 PowerAdvocate Provider of spend & cost intelligence to utility & energy customers driving ongoing P&L savings Optimizes procurement decisions that drive financial performance Founded 1999 with focus on utilities Unique data set from contributed client spend data • Machine learning
Slide 117: PowerAdvocate Fit with Verisk Distinctives
Investor Day 2017 PowerAdvocate Fit with Verisk Distinctives Verisk Distinctives PowerAdvocate Fit Comments Granular cost data and models in utilities and Unique Data Assets oil & gas Industry experts, advanced machine learning Deep Domain Expertise capabilities, technical and commercial expertise U
Slide 118: Well-Defined Approach to Exploring Potential Acquisitions
Investor Day 2017 We Have a Well-Defined Approach to Exploring Potential Acquisitions Is the prospective target an attractive Verisk-like business? Can we add value through scale, distribution, customer relationships? Can the acquisition make Verisk better (new data sets, new customers, new methods)
Slide 119: Investment Thesis and Performance Goals
Investor Day 2017 Investment Thesis and Performance Goals MODEL TARGET OUTCOMES Business Vertical Expertise Creators Who Are Contributory Deeply Efficient with ORGANIC REVENUE GROWTH Data Integrated Capital 7-8% on average, over time ? ORGANIC EBITDA GROWTH 1-2 pts faster than revenue growth Global
Slide 120: Senior Management Q&A and Closing
Senior Management Q&A and Closing © 2017 Verisk Analytics, Inc. All rights reserved. 120
Slide 121: © 2017 Verisk Analytics, Inc. All rights reserved.
© 2017 Verisk Analytics, Inc. All rights reserved. 121
Slide 122: Appendix
Appendix © 2017 Verisk Analytics, Inc. All rights reserved. 122
Slide 123: Historic Performance Recap
Investor Day 2017 Historic Performance Recap Metric 2007–2011 2012–2016 Revenue 10.2% 12.9% CAGR Organic Revenue Growth 6.9% 7.2% AVG % Subscription Revenue – 82.6% AVG Gross Margin – 64.7% AVG EBITDA 13.8% 13.8% CAGR EBITDA Margin 46.3% 50.4% AVG Adjusted EPS 18.3% 14.8% CAGR CapEx 15.9% 27.8% CAGR
Slide 124: Revenue
Investor Day 2017 Revenue 2,500 10% CAGR 13% CAGR 5 years through 2011 5 years through 2016 55.0% 2,000 $1,995 M 1,761 45.0% 1,431 1,324 1,500 1,185 35.0% 1,088 860 934 1,000 808 23.0% 748 25.0% 16.4% 500 11.5% 11.8% 13.3% 15.0% total 8.0% 8.6% 8.9% 8.1% 6.4% growth 0 5.0% 2007 2008 2009 2010 2011 2
Slide 125: Subscription Revenue
Investor Day 2017 Subscription Revenue (% of total revenue) Subscriptions/long-term contracts Nonsubscription 20% 17% 17% 17% 16% 19% 80% 83% 83% 83% 84% 81% 2012 2013 2014 2015 2016 2017 YTD © 2017 Verisk Analytics, Inc. All rights reserved. 125
Slide 126: EBITDA
Investor Day 2017 EBITDA 14% CAGR 14% CAGR 1,200 5 years through 2011 5 years through 2016 105.0% $1,005M 1,000 898 95.0% 728 800 85.0% 665 590 75.0% 526 600 452 65.0% 366 392 329 400 49.8% 50.2% 50.9% 51.0% 50.4% 55.0% 48.4% 48.4% 200 44.0% 45.2% 45.6% margin 45.0% 0 35.0% 2007 2008 2009 2010 2011
Slide 127: Adjusted EPS
Investor Day 2017 Adjusted EPS 3.50 18% CAGR 15% CAGR 110.0% 5 years through 2011 5 years through 2016 $3.11 3.00 $2.87 90.0% 2.50 $2.19 70.0% $1.98 $1.78 2.00 $1.56 50.0% 1.50 $1.24 $1.02 30.0% $0.91 30.8% 1.00 $0.80 25.5% 18.8% 21.5% 10.0% 0.50 growth 13.9% 12.2% 14.4% 11.4% 10.7% 8.4% 0.00 -10.0%
Slide 128: Capital Expenditures
Investor Day 2017 Capital Expenditures 16% CAGR 28% CAGR 5 years through 2011 5 years through 2016 $146M 138 115 105 Internally Developed Software 53 43 Hardware/Third-Party 30 26 28 Software 23 Non-IT 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 CapEx as a % of Revenue 4.0% 2.9% 3.0% 3.0% 3.9%
Slide 129: Revenue Sources Remain Diverse and Highly Recurring
Investor Day 2017 Revenue Sources Remain Diverse and Highly Recurring YTD 3Q 2017 Revenue Distribution YTD 3Q 2017 Subscription Base Energy & Specialized Financial 21% Services 6% Nonsubscription 19% Risk Assessment 37% DA Subscription Insurance 81% 36% Decision Analytics 63% © 2017 Verisk Analytics
Slide 130: Debt Capital Structure
Investor Day 2017 Debt Capital Structure as of 09/30/2017 (in $ millions) Investment Grade Ratings Bonds $2,300 S&P: BBB- Revolver Drawn 595 Moody’s: Baa3 Total Debt $2,895 Fitch: BBB+ 905 Debt/EBITDA1 2.6x Revolver due Covenant level2 3.5x May 2022 595 900 450 350 350 250 2015 2016 2017 2018 2019 2
Slide 131: 2016 Acquisitions
Investor Day 2017 2016 Acquisitions Date Apr 2016 Jul 2016 Aug 2016 Oct 2016 Nov 2016 Nov 2016 Description Provides value-added Delivers business-to- Provides strategic market Provides a software Provides large-scale Provides market services focused on fraud business news, market intelligence to the
Slide 132: 2017 Acquisitions
Investor Day 2017 2017 Acquisitions Date Jan 2017 Feb 2017 Feb 2017 Mar 2017 2Q 2017 May 2017 Description Provides liability Provides automated Provides UK domestic Provides analytics, risk, Aerial Imagery Provides intelligence for risk modeling and medical risk assessment insurers with and complian
Slide 133: 2017 Acquisitions (continued)
Investor Day 2017 2017 Acquisitions (continued) Date Aug 2017 Aug 2017 Aug 2017 Nov 2017 Expected Dec 2017 Description Provides acquiring banks, Provides bankruptcy data and Modern, powerful, and Provides groundbreaking Provides market, cost payment companies, and consumer behavioral data, integrate
Slide 134: IRR and Cash ROIC Methodologies
Investor Day 2017 IRR and Cash ROIC Methodologies IRR Cash ROIC • Purchase price and any earn-outs in the • For year 3, numerator is third full year of year paid ownership, and denominator is end of year-2 capital • Cash flows (including forecast 2017) calculated as NOPLAT + D&A – CapEx • For 2017,
Slide 135: Non-GAAP Reconciliations: Adjusted EBITDA
Investor Day 2017 Non-GAAP Reconciliations Adjusted EBITDA1 ($ millions) 2016 2015 2014 2013 2012 Income from continuing operations 451.5 487.5 354.0 318.9 288.7 Interest expense 120.0 121.4 70.0 76.1 72.5 Provision for income taxes 202.2 196.6 208.5 184.8 162.7 Depreciation and amortization of fixe
Slide 136: Non-GAAP Reconciliations: Adjusted EPS
Investor Day 2017 Non-GAAP Reconciliations Adjusted EPS1 ($ millions, except shares and per share amounts) 2016 2015 2014 2013 2012 Income from continuing operations 451.5 487.5 354.0 318.9 288.7 Plus: Amortization of intangibles 92.5 70.4 30.1 36.2 29.1 Less: Income tax effect on amortization of in