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About Insurance Services Office, Inc.

Insurance is a risky business, and Verisk Analytics is in the business of helping to manage that risk. The company compiles and analyzes data to detect fraud, economic headwinds, and catastrophe and weather risk. It uses what it finds to predict losses for clients in the insurance, energy and mining markets, and financial services industries. Verisk's customers include the top property/casualty insurers in the US; leading credit card issuers in North America, the UK, and Australia; and the world's largest energy companies. Verisk was created by subsidiary Insurance Services Office (ISO) in 2008 as a means of going public. More than 75% of the company's revenue is generated from the US.

Operations

Verisk operates through three segments: Insurance, Energy and Specialized Markets, and Financial Services.

The Insurance business, which brings in more than 70% of revenue, offers analytics in fraud detection, catastrophe modeling, underwriting, and loss estimation.

Energy and Specialized Markets, account more than 20% of revenue, provide analytics for customers in the global energy, chemicals, power, renewables, and mining and metals industries.

Financial Services, generate more than 5% of revenue, provide financial institutions, regulators, payment processors, lenders, and merchants with competitive benchmarking, decision-making algorithms, business intelligence, and customized analytics.

Geographic Reach

Based in New Jersey, Verisk has offices in nearly 30 US states and in more than 30 countries across the Americas, Asia, Europe, and the Middle East.

The company's revenue is concentrated in the US, which provides more than 75% of sales. The UK supplies over 5% and other countries account for more than 15%.

Sales and Marketing

A majority of Verisk's revenue is generated through annual subscriptions and long-term agreements. The company sells its products and services through a direct sales force and technical consultants. Verisk also serves clients in the insurance, energy, financial services, and risk management industries.

Financial Performance

Verisk has seen strong revenue and net income growth over the past five years: revenue grew 48% between 2015 and 2019. Net income has also seen considerable growth over the years, however, due to the slight fall in 2019, this resulted in an 11% decrease between 2015 and 2019.

In 2019, revenue rose about 9% to $2.6 billion, up about $212 million from 2018, driven by sales increases in the Insurance (7%), Energy and Specialized Markets (5%), and Financial Services (2%) segments. Its recent acquisitions and businesses held for sale, partially offset by the disposition, contributed $64.7 million.

Net income fell 25% to $449.9 million in 2019 despite the rise in revenue. This was due to an almost 60% increase in selling, general and administrative expenses to $603.5 million from $378.7 million the year prior, as well as a full $6.2 million increase in other operating expenses primarily related to a loss associated with the disposition of its retail analytics solution business.

Verisk had $184.6 million in cash and equivalents in 2019 compared to $139.5 million the year before. Operations generated $956.3 million, and financing activities provided another $10.9 million from long-term and short-term debt proceeds. Investing activities used $927.9 million, mostly for acquisitions and capital expenditures.

Strategy

Verisk's strategy for growth includes increasing sales to insurance, energy, and financial services customers; developing proprietary data sets and predictive analytics; continuing to acquire complementary businesses; and leveraging its intellectual property into new markets.

Towards those ends, the company is in constant acquisition mode. In 2019, it entered agreements to acquire various entities to further enhance its capabilities. Among these is Keystone Aerial Surveys, Inc., the aerial survey business in the US of Pasco Corporation, Japan's largest geospatial service provider. Genscape, which is a global provider of real-time data and intelligence for commodity and energy markets, is also part of the list. It also has BuildFax which is a provider of property condition and history data from its shareholders.

Verisk has also launched several platforms and programs varying from insurtech solutions to analytics platforms. In late 2019 it launched OneXperience which enables digital engagement between policyholders and their insurers during a critical underwriting step—the home inspection. It expanded OneXperience to commercial insurance in early 2020.

Furthermore, it launched several platforms in 2020 such as one for automated underwriting of life insurance which uses AI in ingesting and interpreting electronic health records, the Life Risk Navigator which is a cloud-based stochastic risk modeling platform that offers in-depth portfolio analytics, and a new ISO ClaimSearch accelerator as it is the most comprehensive source of property/casualty loss history records available to the industry.

Mergers and Acquisitions

Verisk has been making a number of acquisitions to enter new markets (such as global energy), expand its international operations, and broaden its offerings.

Verisk bought FAST in 2019, a leading software company for the life insurance and annuity industry. The acquisition of FAST will extend its offerings to the life insurance market as Verisk builds a comprehensive suite of innovative solutions to support insurer modernization.

In late 2019, Verisk acquired BuildFax, a provider of property condition and history data, from its shareholders. The majority shareholder of BuildFax is DMGT (Daily Mail and General Trust. BuildFax will become part of ISO, a Verisk business, and will enhance ISO's existing property data and analytics. The data from BuildFax will enhance ISO's robust property analytics while helping underwriters gain insight into changes in the buildings they insure.

In 2019, Verisk acquired Genscape, a provider of real-time data and intelligence for commodity and energy markets, for $364 million in cash. Genscape became part of Verisk's Wood Mackenzie business to enhance its intelligence in energy data and analytics.

In another 2019 deal, Verisk acquired US-based Keystone Aerial Surveys Inc. to expand its aerial survey services. Keystone became a part of Verisk's Geomni business unit.

Company Background

Verisk traces its roots back to 1971, when ISO was created by an association of insurance companies. Verisk went public in 2009 in one of the largest offerings of the year, raising almost $2 billion.

Insurance Services Office, Inc.

545 Wshngton Blvd FL 14-2 Flr 14
Jersey City, NJ 07310
Phone: 1 (201) 469-2153

Firm Stats

Employer Type: Privately Owned
Executive Vice President, Chief Financial Officer: Mark V. Anquillare
Group Executive, Supply Chain Risk Analytics; SVP and CIO: Perry F. Rotella
President and CEO: Scott G. Stephenson

Major Office Locations

Jersey City, NJ

Other Locations

San Francisco, CA
Washington, DC
Palm Coast, FL
Duluth, GA
Burr Ridge, IL
Auburn, MA
Mount Laurel, NJ
Columbia, SC
Bryan, TX
Dallas, TX