Earnings call transcript Q4 2022

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Operator

Good morning, everyone, and welcome to the Verisk Fourth Quarter 2022 Earning Results Conference Call. This call is being recorded. [Operator Instructions]

For opening remarks and introductions, I would now turn -- like to turn the call over to Verisk's Head of Investor Relations, Ms. Stacey Brodbar. Ms. ahead. go may you Brodbar,

Stacey Brodbar

Thank you, joining fourth We you day, XXXX and today for good us our results. everyone. a financial appreciate Devin, discussion quarter of

Chief Lee On today Chief Shavel, Executive Officer; Verisk Financial the Officer. and are President call Mann, Elizabeth and

to presentation referenced in earnings the The of website, the earnings Investors traditional release well X-K earnings release XX our A the has can and furnished verisk.com. been we also this section will on The associated days as for XX-K website SEC. call an of as available that call quarterly to our this by and replay found be our dial-in. have attached be on

include in today's differ recent future detail that in Verisk's by could affect forth to will performance, in about earnings including set performance today. filings. those remind contained what factors financial from more our could statements call our performance forward-looking comments guidance. SEC Actual Information is related about I As suggested may is our materially release, everyone future today's the

verisk.com. for like results that provided constant are on this in from growth and today's presentation reported Investors organic to and everyone reconciliation earnings are is historic consolidated A dispositions posted GAAP the of the figures. remind discussed excluded of all in financial financial non-GAAP results measures currency website, I'd and call included Finally, our recent our on our X-K section

from example, including, costs, or high to the gain estimating consequences, and are provide of of nonrecurring expected be margin excluded because not that unpredictability from items reconciliation GAAP other and However, EBITDA acquisition-related comparable EBITDA and significant. non-GAAP to EBITDA certain may adjusted which unreasonable able tax we dispositions effect expenses, adjusted margin, directly adjusted EBITDA for projected loss effort of the projected most are a of adjusted the and results

now to to Lee I over turn like call Shavel. And would the

Lee Shavel

in reintroduce participating for discuss you our forward Verisk our been Stacey, configuration, today. and because in looking and thank an the to you all changes, let provide momentum morning, in thanks accomplished of a in to you, everyone, We extraordinary given insurance-focused this the a structural the brief all opportunity so We've our amount quarter new Good expected it's forward XXXX. to call me XXXX, summary. give fourth really first to performance view and

proceeds structural million. First, of change. Services proceeds and we Financial we sold a And In billion. $XXX our we April, cash Mackenzie Verisk In of $XXX recently XE, there's approximately lot approximately environmental business, Wood in most March, been sold for of net million. safety $X.X February, health net for cash for sold

we We've environment, substantial share strong a begun underlying through businesses, of financing and of of challenging repurchases those the sale economic, to process. were attractive to management through complete these a geopolitical capable well-organized process able majority a transactions at and transactions as returning shareholders teams Despite proceeds promised. valuations after-tax the the

Structural Let's change the governance transition change. at Verisk. turn to only wasn't

shareholders number a also We governance made that suggested. of changes

I advice transition. fresh with annual and with a election Board Kim Wendy four of the and Hansen Olumide his directors Lane, Jeff new We separated for Soroye to transitioning We are with Bruce Chairman and perspectives added thank our We new declassified role CEO to my the experiences: leadership as and elections. Dailey, personally Bruce Chair. Stevenson. have through

me great have directors. as a our all CEO, been of he's coach As to been former a

Let's turn to organizational change.

substantial we've Finally, organizationally, had change.

generation new enabled of we perspectives January CFO, rise, have Stephenson's management Scott Anquillare as These make Verisk how fresh to the better. of made Elizabeth energy management. the in senior to a down we our addition Mann stepping addition Mark bringing over and year, In can dozen last have retirement next in and changes

whom Operating the and the are Senior committee our better integration creating employees corporate We reconstituted have committee, improved represent I for balance diversity ethnic for of six who common proud level, gender and unit share of highest new strong and leaders also business mission with I'm represents to leaders and colleagues, the At Committee a all coordination. clients, XX% value signal that the shareholders. our our for of XX% diversity, entire organization. a XX

we course, change, this all With with carefully were, and disruption watching for employees clients. of our

organizational for strategy informal is anxiety insurance some there from feedback and in surveys positive halls, new and has understandable employees enthusiasm at feedback been While any anonymous our with refocused change, town three very leadership. the with

purpose cultural as together resonated employees strongly build to of resilience has our communities businesses caring our results. working particular, of learning, In new values has and our with global for and individuals,

believe in XXXX As was structure view our change of can and conclusion, what accomplished organizational operations we a you of of was in exercise. appreciate, clear and of I XX-K delivery terms complex a all foregone insurance-only the our massively no in

expertise effort, the accomplish. and commitment our required It of employees of hundreds to

commitment all professionalism, our our of we understanding They So for undergone success. XXXX. X,XXX I'd talented to absolutely much take in thank critical this their and personally have employees nearly opportunity like change and are so future as to to

ahead. accomplished we demonstrates year what What this we're capable of

their received On and response clients organizations. insurance from also renewed we appreciate who front, a to our the focus improve many positive relationships desire our client have across

organization, we and and in great Their have of reinforces that City role. as I time organization. this Conference client a can most calls. dedicating from substantial returning my a at that's dozens I while and experienced first-hand front. client be leading meetings Salt I'm career an much I'm spent of this we excited better the product to client been And professional, and be where our a area Lake Elevate particular to feedback

steal I on won't Elizabeth's to financial the change. move financials. thunder Let's

performance XXXX. matter and elements to me in intend achieve However, what XXXX that our there most are two in we to

deliver revenue results. despite First momentum the the environment is in and our XXXX EBITDA ability the in growth to and fourth continue to and changes strong challenging adjusted clear quarter

even impact X% of organic delivering growth currency after fourth over clearly by We capable of revenue business have the demonstrated constant quarter of Verisk is eliminating insurance-only storms. the what the in in

substantial result year challenges that I'd a for a note business OCC growth and and our revenue to also and beyond. in build a to reflection is and good foundation XXXX X% growth the year X.X% of insurance of strong of a and fiscal macroeconomic change solid on stability is the adjusted of EBITDA of XXXX,

is for XX% basis quarter, to our XX.X% normalized and improvement be XX% Second XXXX. XX% improvement a business basis for delivery for XXXX for XX%. to of points on the XXX we to EBITDA between goals margin delivering XXXX. range at are set with the of XXX of of from our At the cusp And base adjusted to in of clear clear targeted consistent insurance-focused margin fourth XX% low XX% guidance for we is of the end the our points

for refocused also the input necessary for expanded shareholders but financial we caveats complex from assessment changes business. XXXX of in many come as decision that Naturally, represents a providing predictable structural Finally, with growth all reflection as This who well our XXXX with more the of performance. can't of guidance. improved we best contingencies are the ask reflects financial expectation our as guidance an predict of our financial it will XXXX

Lloyd's new leave that centrality, Verisk, are, margins and our values. expanding We strong all with, including workflows us There's does market. a of growth assurance, where our lot changes? moment, refocused reenergized this that as you'll So solutions and growth insurance a nonstandard and stable such in we as and opportunities including focus, strong the our and of European be a purpose industry improving some with that marketing business new efficiency solutions, these structurally, areas organizationally familiar in position, new and in where businesses, are elements life market specialty are after

will year and new see ahead. to guidance our You margin approach drive the in a providing expense to financial for also changes discipline expansion

moment industry and is back a opportunity. complex to step massive, our growing insurance globally. take reframe Let's and The

often a less environment. substantial and Our macroeconomic that an than I of in the clients. from evolving is sentiment leaders challenges clients face an assertion regulatory hear rapidly technology, our repeated This

One "Lee, client position. importantly, need needs help favorite this, more was, help." but our to That address industry crystallizes Verisk's and the Verisk's of opportunity my we quotes

to from Day business is that insurance clients a industry. and than true several the together Verisk rather solve for a You'll at work considered collectively hear vendor that we Investor partner problems

in clients a to create individual industry analytics more We needs for efficiently through much We value and scale address than data, at simple software invest mechanism. economic companies our can.

across We to are expense addressing revenue and risk of growth, the margins. hundreds fund outcomes, of dollars industry premiums of billions and improve productivity experience,

Much operating realized Connecting value the of real high the to the Hence, for deliver is this industry insurance investments report annual capital. on and These returns in opportunity our connectivity What drive of incremental ecosystem. theme our XXXX: across turn, Matters. facilitating by and leverage growth,

central. To connect, be you must

with Verisk create for the understand industry. No trusted, expertise positioned must ecosystem. needs our and than better insurance of be must this company the scale, You is to and the value relationships you

path put very is this in a feel by and accomplished we the focused approach. of but values, in benefits focused can we together us position purpose needs the we the potential, serving to a With XXXX, expanding of are our organization common where about integrated substantial proud way. and excited better reconfigured the and on and can ahead energized bound of full very We're This what and industry. insurance demonstrate was the already it all this

margins path financial you'll and our believe growth, returns upcoming continued Investor our capital. hear will Day, as at guidance this As implies and improving we on strong XXXX see

path to thanks and who and shareholders indirectly And to analyst input. our and approaches We have listened offered community. encouraged with us actions carefully. and our through new perspectives reflect I'll their Board surveys end or your directly consider our clearly ahead our

the solid off and and execute us I being a your are better imagine to opportunity, expand we're here value to on plan so, behalf. do position We can't on to a in start. the deliver

I'll financial our the it XXXX. for results that, year for review to the hand With to our quarter, financial and Elizabeth guidance over

Elizabeth Mann

everyone on good call. to the Thanks, Lee, and day

everyone. with start I a results, reminders I Before few have for quarter the fourth

XE GAAP when of will all negatively impacted transactions. of effect and First, by quarter numbers are first the the and anniversary will dispositions Financial Verisk Services. through those XXXX This we continue consolidated

is prior described results as we adjusted or results are not discontinued And EBITDA included period. materiality, either as the the quarter. its beginning Wood to revenue operations its Second, or previously, Mackenzie in for due this current our accounted period in

operational on metrics, as of we the our posted of now Investors the reported certain results, results well our to earnings quarterly all have forma divestitures included will pro reconciliation you financial as removing website, hope the helpful. in section find we historical presentation Third, a which our

to to now pleased I'm that XXXX. financial the strong we Turning had a results. share to finish

to revenue the the diluted from Verisk Income was dispositions. quarter, impact continuing prior fourth attributable $XXX up year, was GAAP of while million, by basis, growth and was offset million, operations in reflecting on XE earnings consolidated $X.XX. For the insurance, and slightly VFS a versus per the GAAP share $XXX

organic Moving strongest to operating constant demonstrated the to across non-operating measures strong adjusted our to with which improvement sequential in press relative broad-based of as contributed the for year. we the the are non-GAAP financial very release, quarter defined section recovery business our items our currency results a of as our quarter third pleased results,

quarter, X.X% fourth OCC in XX.X% of and in underwriting the grew claims. In revenues and rating growth with X.X%

This with quarter's Hurricane revenue results Ian. associated storm-related included million $X.X in

storm-related the revenue OCC Excluding revenues, would grown X.X%. have

comprise core events, of which strength solutions, in underwriting, businesses the revenues, across solutions. total insurance extreme in most saw broad-based We XX% subscription basis. X.X% quarter, and an revenue estimating of on our grew our life growth property OCC antifraud Our with

modest in We from the did negative Florida. impact experience liquidations a

industry, trouble a As and been Ian we calls, noted previous spot insurance the for losses has from in complication. Hurricane the add Florida

the six liquidations. XXXX, market In saw

in have insolvency. into higher-than-expected we company losses seen which Hurricane receivership into placed the after is And one 'XX, Ian, so carrier far from

customers both work and sources by to new Florida's our to such adapt our rules to age roof headwind better aerial through and new helping this offset existing and continue risk engagement using by imagery. roof data We coverage as segmenting them with

into integrated ensuring for appropriately customers data and our in as drive help action policies. their can been platform in-force underwrite earlier have they process, well quoting LightSpeed analytics help risk non-rate Our leverage as

Hurricane reflecting impact, contribution the auto modest was representing fourth improving continued in strong This storm also XX.X%, transactional from compensation revenue marketing total associated solutions. offset pre-pandemic in and our which by continues the in with Adjusting third Transactional business, growth OCC international healthy is recovery for was the strong sales across Ian. revenues X.X% XX% of quarter, be life workers' improved the weakness and continued levels. growth below a revenue part comprised of a of travel, of underwriting insurance solutions though, to quarter, from

loss impact to softness and ratios. with On auto To and the continue see back well solutions auto side, of policies the on underwriting underwriting dealing are as policy and drive carriers auto we new as to as marketing have carriers across spending inflation cyclical underwriting that rising increasing customer acquisition. pulled marketing our new on end, volume

another take leakage. to pricing, ways we actions to are premium uncertain bridge working are customers Carriers six effect. time targeted them we profitability months minimize reset this working with identify growth help could drive To take and XX which that think improve our for with to to truly non-rate to help Verisk,

are allows product, -- pinpoint attention. insurers our IT which check We of risk renewal allows resources with actively with engaging an about business book which to customers require and minimal analyze entire policies that insurance

expansion Moving and actions impact OCC XX.X% adjusted EBITDA objectives. have core operating in quarter, results. certain margin reflecting in reduction we the to our with cost leverage adjusted was now EBITDA taken fourth our growth connection the of

up organic reported recent dispositions, margins This level transformation from approximately the operational of points cost number discipline, includes which strong storm-related with and of reduction impact margin, basis as the prior incremental points XXX XXX XX.X%, cost in higher including actions a EBITDA T&E high headwinds from of well XX adjusted technological results basis year, basis the the was and expenses. acquisitions reflecting associated points and inorganic also the results, ongoing recent as headwinds, from the from revenue. from and benefit Total our margin certain margin both includes

points. certain In collectively FX a included XXX addition, in which or impact this credit, expenses quarter impacted pension including our margins severance, by decrease basis negatively and onetime non-operating

all for XQ margins the XXXX a Finally, XX quarter margins fourth represent XX.X% if basis from on basis expansion fourth quarter pro forma margin of point XX.X% in divestitures, you XXXX an the pro compare the of forma.

focus. objective basis XXXX expansion adjusted expected operational rate points points on strides run year deliver a in XX% with in and the about XXXX. XXXX our a of date, of cost improvement XXX be basis, will base EBITDA reflecting than reported excellence our on full XX% forma of points in of cost we XX% great through margin with of made took in savings of The XX% from margin basis we XXX to the decisions of actions XXXX, Reflecting XXX have basis achieved to savings more actions the address we to cumulated pro realized results targeting. with to margin impact normalized To approximately in taken associated are those XXXX XX% already

leverage Our our in have embedded business business confidence deliver And continues data we to in demonstrate analytics the to operating the ability in our model. on objective XXXX.

the prior Interest compared the expense. Interest expense to in totaled $XX million million quarter fourth year. for $XX.X

as For the interest related totaled interest as in rates. is credit expense million $XXX on facility higher in our expense versus balances interest $XXX million increase full to well higher revolving This year, XXXX.

staying go-forward February We near look business, within our paid XXXX. off EBITDA. of the under Xx the have leverage establish as adjusted to credit in borrowings of And our targeted term, all facility we'll Xx a sheet to range for balance

Taxes.

quarter. $XX XX.X% to which in compared Wood to year X.X% was benefits included part transaction million, rate rate the lower approximately in result This stock compensation primarily tax benefit versus the a tax of onetime related the our divestiture, benefits effective Mackenzie of offset reported lower by Our prior period. was prior year

the $XX.X the year compared year, full all XX.X% our was in year. our was XX.X% approximately benefits effect year dispositions of tax our For tax tax throughout of reduction related net 'XX, rate effective prior X.X%. benefits to in transaction-related to in full rate these the effective million including a as The

contributions acquisitions, average $XXX adjusted and $X.XX rate in income These to quarter increased the net from and increased effective the lower net EPS business, million, 'XX. reflect XX% diluted income count. diluted fourth tax a organic for a Adjusted share and growth changes lower adjusted to Adjusted EPS. XX%

returns. Capital

cash returned During the to fourth to repurchases quarter, also in in allows we through business. capital shareholders our while and $XXX share strong shareholders dividends million capital to us consistently our as return investing flow

$X.XX repurchases intend the back accelerated we $XXX since is proceeds a Wood majority $X.X total from with to divestiture Mackenzie we the share for Wood of transaction agreement proceeds. additional an that into return announcement plan million This to capital consistent In completed Mackenzie enter associated return repurchase repurchases. via the coming in to shareholders the of November. In billion with share in particular, amount our the is of the share the included billion have transaction of days,

continue We within dilution expect X% be the range. the to from transaction the X% to to

Looking now guidance. we'll ahead shareholder annual providing financial to mentioned, Lee to and XXXX, we feedback, have listened as be

a website, summary guidance all in measures on our the of posted the We section have Investors earnings verisk.com. of deck

billion XXXX of consolidated billion we expect to $X.XX versus range be $X.XX in in forma. revenue $X.XXX Specifically, for to XXXX, billion pro the

EBITDA billion range forma in XXXX the range of of versus in expect in to be XX% the adjusted pro $X.XXX and EBITDA $X.XX be We to to to $X.XX adjusted XX%. billion margin billion

down the expect million FX projects and to $XXX of activity. P&L, asset the approximately M&A purchases, between timing fixed subject elements to completion depreciation be further and Working intangible variability, Both are we and to future be D&A amortization million. of $XX amortization $XXX and the million

We for and into core on and as between organically enable be modernization $XXX also of return services continue the million $XXX that to investment These to behind line standard to new capital industry. a million expansion expenditures our include industry workflows offering highest our digitize expect our opportunities. we productivity improve invest

and We enable are implemented. investing will upgrade of once systems that human in also capital future efficiencies an our financial

tax share represents of XX%, be $X.XX. rates in benefits adjusted growth As expect to in after on range bringing earnings to we previously rate range transaction the EPS This communicated, normalizing the per double-digit range to impact of strong $X.XX the to XX% tax of XXXX. for a

we're will here where to Jersey on Investor call I I targets. City, we Lee, over clarity profile, March strategic drivers our more transparency provide Day growth just in turn hosting financial remind an the that and and want to on everyone Before long-term XX

for turn will call I now the closing And over to Lee comments. back some

Lee Shavel

excited focus deliver operational In on all the global efficiency. value clients are attention, industry where decision-making insurance through Elizabeth. our to we to summary, and our substantial can Thanks, we and resources talent improved

to We the for engaged will and identify develop objectives. a be more to technology our as and their strategic industry clients Verisk broader ways insurance intensively to partner support

the they help relationships and our this are people of positioned With those accelerated and scale, the we communities extension, in period expertise, industry for change to connections to well and make serve. by

Our motivating businesses is for with with will globally. focused and this deliver returns. unique our in our that communities market purpose is model Combined position, work our to to clients resilience individuals, building together business a and value shareholders growth through and formula

continue to Verisk. appreciate in interest the We support and

of number us, yourself ask one large analysts have the we Given we you covering question. limit that to

that, open the ask questions. operator With to the I'll for line

Operator

Instructions] comes with first question Toni Morgan [Operator from Our Kaplan Stanley.

Toni Kaplan

the particularly, today results on margin on I think Congrats and progress your front. the

as And your hitting XX% about more place? talked strategy change be that will low just does this given 'XX. range. margin You the after 'XX is of meaning you aggressively opportunities, end XX% a allow mentioned, to margin solid essentially you investment, your that to target growth at really in this go the around Does in

Lee Shavel

hand Thanks, start. to over Elizabeth to Toni. going I'm to it

Elizabeth Mann

Thanks, Toni. our it strategy. I changes overall don't think

maintaining end business been of on to delivering committed schedule. balancing that focus as range we We're to the level the 'XX. But of that already margin so investment We we'll maintain the are be while ahead still in have in happy low targets in far. of

Lee Shavel

we're that business. comfortable meet ability while on for objectives still our think the And to very I'll continuing in growth add, those have just to to Toni, the we build targets, support Yes. that I

Operator

question Goldman Tong Sachs. Our with from next comes George

George Tong

for restated deliver EBITDA potential XXXX. margin Verisk XX% to to normalized Can suggesting your of of you XX%. XX% discuss of to normalized EBITDA to XX% in insurance-only has financials commitment margins? a XXX bps improvement historical from approximately You've an margins Recently, XX% target bps reaffirmed XXXX to your you XXX base upside EBITDA

Elizabeth Mann

there's talking previously as business. Right about I'm some that about some remain Yes. benefits committed XXXX, Thanks. we've headwinds talked I We to well been think to range. in that here 'XX as now, the

we're So the to committed balance, range. on

Operator

with Balsky Heather from America. of comes Bank question next Our

Heather Balsky

you of Q&A. And more just us the bridge help continue 'XX of XX sort margin little that to just the gets you What's XX, if savings? streak stranded I'll on to from coming ask, the impact from costs you questions 'XX? lines what's from bit the other could kind and the some of what of chunkier a the to get

Elizabeth Mann

Yes.

bit a Let me little talk that. about

of baseline with and forma, the already of pro recent from start that you it costs, If the headwinds includes that most stranded 'XX from the XX% M&A. headwinds includes

forward the about. call technology the bit from on a is from identified our the XX in we of ongoing cloud investments, previously points basis it, collectively and little that those about there items capital As some more move normalization, that, baseline, including and still impact of we T&E systems talked headwinds financial

those basis investments, points. So all XX

will basis points There's points of current basis points operating about impact savings headwind that operating XXX from of be a of haven't that's based probably points. points are points points, which leverage. pension so I that sort between to that's will about Offsetting down XXX the the of us gross the XX target, XXX offsetting see to still know in XXX to XXXX. those -- XXX basis Collectively, basis we credit, basis assumptions to broken to XX today included and net on all margin core continue XXX points -- but you'll basis bringing leverage, in cost also that, be drag basis expansion. basis

Operator

with Our Capital next Markets. question RBC from comes Sabadra Ashish

Ashish Sabadra

top the in XXXX OCC the I guidance, strong for organic line, for really your assumption Changing gears constant currency guidance to moving was quarter. range? and is the wondering that growth what

the insurance on trends some as well on color coming Florida cadence, as the underwriting we any and a comping we improving and And auto about any think was you quarterly think could about on back, worker wondering I then as if takes comp of puts color pricing that? any provide headwinds. color And as

So any incremental color.

Lee Shavel

It’s like a four-part question.

multiple that So choice. would -- let's I consider choose

So…

Elizabeth Mann

there. I'll the try hit to points main

haven't forecasted basis. So given on revenue OCC we that on a growth, the

the quarters as develop. out that report will We

you, from a that to inorganic XXXX, create one -- in don't the the growth FX The rates. not for for not we're -- organic of major in obviously, is are roll And slice acquisitions swing predicting. piece

quarterly of plays in swing -- cadence quarters perspective. there's how a the would asked the terms imply you about of meaningful see that here we financial from nothing In that that a out, today

you just some look the those have based swings swings could XXXX, to If on in at results comparability OCC 'XX. the

Operator

Our Stephanie with next question comes from Moore Jefferies.

Hans Hoffman

This is Hans Stephanie. Congrats Hoffman strong on for a on quarter.

wanted there? Just specifically talk that, organic within international and your And just pipeline trending of a going growth that any to about bit you is just critical insurance, kind how the then strategy are in of internationally mass could there maybe gain help acquisitions forward? as further part therein

Lee Shavel

Yes. Thank you for the question.

try to that. me the components of Let address

where I So strategy in that technology outlined across that to that across we can looking general comments monetize make that problems investments the data And we I or my industry. industry strategy are in really solve holds think the business.

that I'll Internationally acquisition use in very as where Sequel businesses context, have of and business. we've finding had solid have an established our international example, products taken a that of success we

ways participants support in business such that add the to business, found have a ecosystem. as for components integrating other components rate-making market offering that in with that or for thereby value binding that component We total to component the a our addition of

be that Germany we with familiar recently acquisitions sets U.S. Opta as to we're business. We where an strategies. ACTINEO functionality you made to those may in leverage similar within We well and and additions will both opportunities for acquisition continue deploying of the in Sweden, our data of look have and types as

to generally, our than range across within those of rate marketplaces. deliver businesses, been in penetration generally we and And our international have have growth because overall double-digit able the the faster we opportunities

to it and internationally together applies those each strategy ties from our general the elements. that contributions hopefully So of with how and growth

Operator

next comes Jeff from Our with Baird. question Meuler

Jeff Meuler

I step-up. storm the mean, pretty about I ask claims for revenue. the normalized in it's pickup want to growth big a underlying discrete

stepped-up So there in Is recovery looking like onetime could were in there factors and because or trends and for, sustainable? was things this to other about cross-selling what you were the like upselling any be the benefits just mostly workers' really like trying international comp rate the quarter? I'm pickup understand the COVID cited travel, in a recovery I'm in business, like growth

Lee Shavel

Thanks, Jeff.

dimension being the has of a normalization in the say general of business the of one across that would I activity fronts, been driving So has activity couple it that. been

I made return growth of a Elizabeth improvement some comp positive reference businesses. our think some to that in workers' of in our has had to antifraud categories. the

think and think seen more on levels estimating of higher property I the activity. side, And I we've normalized

Some like my of anything that who that have add the that, -- I'd -- think I there's we've we claims ask seen that Mourad, general well, I seen storm claims excluding leads activity. in if business Maroun the revenue, our colleague, just to actual to more the pickup he'd business.

Maroun Mourad

overall Lee. different Thank question. you. experiencing across for you, growth Jeff, Thank that been the Thank We've healthy you, the claims businesses we've got.

as customer you. we engagement Elizabeth the see of Thank So in and estimating business, comp suite activity continue casualty the property is resulting antifraud in as well very made solutions. that workers' addition around our solutions growth across by the comments to Lee healthy to

Operator

with next JPMorgan. Our question comes Steinerman Andrew from

Alexander Hess

'XX efficiency statistics it what Florida? can was then sort are balance and you for sheet in sort about any the provide pressures that is Florida? This sort as 'XX you to rate to in ask from insurance rate retention and Steinerman. on Alex operational or a maybe second question, to maybe -- a that what was then what ex I standalone saw Andrew and And your Verisk? of bit Hess question, retention want of Florida of for the So part --

Lee Shavel

we Florida. rates. high would thanks. think experiencing what there's say Alex, So, one And are liquidation continued client I retention in I we been talked about,

to colleague, of any underwriting we side out. other look to I my called our have we something I that's the that don't the -- so than But that in business. changes situation, on are and if seen retention And see Spector, have there overall whether think Neil here

solid. remain in it like anything We're think to add? only one the liquidation. we've risks watching very Neil, I carefully to of those because you'd So But Florida. had I think date,

Neil Spector

potential are gives well. liquidations just think Thanks, there's into you for summarized come market for that there, there's Lee. it need of No, coverage, the also say which I opportunities. formations new because there would while I that companies down us

it which just offset So as flow some well, a helps entering of there's one-way businesses -- businesses isn't exiting, that. of

Lee Shavel

Thank you. respond. balance operational think, I know And sheet. Elizabeth, the question, I can the and the on don't

Elizabeth Mann

that, Yes. Thanks for Alex.

We pulled kind businesses. is any in high most capital free characteristics I of of the that out specific on the flow think It haven't have right strong But former working EBITDA. and most sort I general, capital don't efficient generates of stats cash business generative our -- and now. negative insurance on cash yields the flow,

Lee Shavel

And these efficiency, our most of think I as lot in a when core the not generating return have dispositions, I a released striking high businesses. is balance insurance was with that sheet we that about thing capital as think Alex,

And proceeds so return the that we most invested you particularly utilize on the in in the will probably as to sheet shares. efficiency significant mind. capital, think balance see I repurchase my That's

Operator

with Greg next James. comes Peters Our Raymond from question

Gregory Peters

Lee, in your through changes last that comments, year. gone over you acknowledged all the company the the has

rather you're laser-focused at get using, at and can about a where survey retention numbers how satisfaction? tracking can comprehensive customer Specifically, is feedback talk looking you you Now you collect on unfiltered that there customer insurance just feedback like than conferences? you're piece, something you're the that

Lee Shavel

which the we system. survey Thank is And a and -- pandemic In that you is year. and the consistent you something before we've the NPS touched undertake scoring on through twice that pandemic. very with think we good a mid-XXs, an a where in Great. Yes. XXXX, really I been much. have We

some home, that the saw general pandemic a that we solid increase experience an well very through offered clients, from client received but think from were the lift I function a that as still of of And kind during working of features number. a we from in our

is also gauge So feedback receive that unit we that customer we always experience. our have we but that, undertake experience from on to looking the product clients

I that level, have of for of value senior to level, communicate are at means So efforts with trying satisfaction. their a providing to at our intensified at we number also to them how for particularly provide we're solving would C-suite a problems anecdotally, we them. say and engage level anonymously

the them just some level our relationship, feedback haven't insurance been -- strong been seen higher industry from actually had has has of we've to very knowing of The where on feedback we very and result. focus engagement The positive. their a as of outreach clients, renewed positive, a a from

So we're different looking across at layers. that at

to has and the that. response build we'll I been far, so continue positive, on And think

Operator

comes next with Securities. Andrew Our from Jeffrey Truist question

Andrew Jeffrey

summation I you helpful. in appreciate the that's really made guidance, business. agree, And of succinct sort all the of the I changes your

We of also drivers. appreciate business the all the callouts

top extreme we can modeling focus Verisk Verisk and -- Now I more potentially if some as think thinking where that laser climate particular you pure-play, life ability accelerate you're or really there on of accelerate think focus the change. wonder areas more there's areas to and to just assets are has line. leverage about a ability has about growth? we think event I'm a you

Lee Shavel

Day. for But Yes. the Andrew, really thank you very it about into we're here. think my that will much -- do question. address I Investor best I at I'll And to drilling excited

but be but Day, it from we're strategically, Investor hear a that for I also say directly opportunity the business another investments to really to I have only not great for advertisement for think will that me hear and it what forgive the you So making.

I'm to to So it limit three. try to going

our for that are in segments in have like new as areas or have overall the current is, that are you first industry rate. opportunity we penetrate needs of to insurance enhances referenced, already for industry marketing significant those insurance existing served the before growth delivering insurance The life that not growth we and us businesses that the

to continue look for opportunities. will we So those

our level as those as They opportunity represent as second for the data, into developing markets faster. analytics new internationally, described, international we've penetration The are solutions. and deliver technology the growing us to where an some businesses well of opportunity a is also

U.S. that And some in that the we follow we've so the acquisition-driven. to success in that's And Canada and in the of had products with with there. UK hope It's features also Europe not integrating just our we success work of Continental have up in some and

that -- insurance just and with other that I C-suite broader conversations broader the I have to to the that point efficiency around improve industry. element other CEOs a the we third think the had would is opportunity clients I've we've opportunity the of based And upon that

specific applications, my potentially we've claims the think I ability or earlier are great products on to been but think I specific point, focused to underwriting on solutions find that together, those our tie the automated strong to is address by from an a more dealt solutions industry very area of expenditure services of reception shared hundreds with. billions of has dollars the we've that or clients the

as on with expand Being elements One you ability the of track element to of to digitize gotten and basis investment the can manage imagine, that which, and language. is lot can our that the has language, tweaks that in our a I'll lines is sometimes exponentially able a more standard making reimagine. policy tease that digitized that forms part interest we're core to of

given types across given that as really the the that, way solutions the being can, that a sets revolutionize of are the data process whole. centrality, we efficiencies is have creating we our Those where industry handled,

a can bit little areas to So of new that a hopefully find gives that where in terms growth we start of we rate. expand you think potentially

Operator

Silber question Markets. with next Jeff Our BMO Capital from comes

Jeff Silber

your and that what the you that on actually And is you there? focus about, of us Can to it what to premiums is these talked a wanted next auto really XX revenues I it now? percentage question. what a as your gives two-part the six underwriting marketing exposure companies was confidence within remind just reset can pre-pandemic, What you months?

Lee Shavel

Yes.

refresh kind ask those the then approved. to are are seeing think regulatory overall one, we second exposure already also on rate of first. the of increases I or being element. And So Stacey to areas going confident I'm because address we're Elizabeth that a part in But number just me

previously regulatory -- created I begin a that a from a a because delay now probably standpoint. delay, of think, We're bit of to was some seeing those There emerge. elections

costs borne overall a is pricing. the be the have think that that into insurers I auto to is recognition inflationary needs legitimate that factored something

areas And from front. a overall think of exposure an increases. we're I some those particularly rate and about, sense approvals think But California in concerned are that we're momentum getting on that There in I standpoint...

Elizabeth Mann

Yes, auto industry is XX% insurance we've said that the auto -- total about of revenue. exposure the our to

Jeff Silber

it that's that's what is now? And was it or what

Elizabeth Mann

general. In

Lee Shavel

has materially. at consistently. that changed It It been hasn't level

Operator

from Our next Barclays. with question Manav comes Patnaik

Manav Patnaik

much the and a details the pricing question for around I you just environment. providing guidance And had first, that. so thank

looking just guess, I pricing expect any could you you what year that? fared, incremental versus talk pricing out If into how improvement about then should and 'XX, -- if this

Lee Shavel

Manav. Thanks, Yes.

So as we can appreciate, have you hundreds of products.

we And reflecting the that, we for so each the a provide. different what dynamic has view elements demand value as that pricing

foremost, pricing it's is by first and of And value product what the delivering. philosophy our primary the driven and

to deliver be trying of value the think about pricing, our And that pricing clients. from to it a to ability value fraction received. to a we so often And growth are is calibrate of when we client the our reflection primarily

Now tied we in an is our that is growth. premium element net also that to there recognize pricing

We products over that are a where that businesses. in decreasing It a tied not stronger of grown part given expecting faster. element is have factor. as lift, are is been we've premium to that as has -- But factor some generally the time other we an different seen growth

component a inflationary inflationary most in the imposed reflecting then we reality have in similar higher compensation standpoint, reflect of that certain And costs done us to say finally, from a a somewhat the have instances, and situations. into clients our higher as of included somewhat environment XXXX, think I we going would on

with particularly most those element revenue is it relates important pricing. our our however, standpoint of say, a all from products, contributions I overall new expect So and amount growth a that while value-added from to component, higher from as from to like would the growth factor into to also our do rate. the new from we the guidance growth upsell contribute pricing and existing customers, initiatives

Operator

William from Our comes Andrew question Blair. with next Nicholas

Andrew Nicholas

quarters revenue to the ask of out the other of 'XX the range? some drivers takes the of that that recovery top the the on I terms the primary past wanted end marketing and of there the headwinds just couple are end? sort and of auto Or underlie and puts solutions called fair guidance. out to say bottom in you've of of bottom to and underwriting, are to guidance kind top Is it kind call

Elizabeth Mann

more auto. storm-related macro In one of swing stability and of a between is bottom obviously. would inherently the difference Good in to revenue that the the two that you Yes. that, One or factors parts range would as -- the unpredictable, lot factors of other sensitive with like as bottom Yes, of could of XX% environment-related some flagged business top contribute the in kind of that question. end of the I you and end the point out overall. of revenue, there's general, be sensitive recovery the subscription the say, top amount our

but for other the one two a sort included to macro-related could budget some have then loss there. like assumption level assumptions there's moderate factors in contribute things of that We the cat in that or of activity and that of And range. other sort

Operator

with Our next question UBS. comes Kramm from Alex

Alexander Kramm

February. you us Quick dropped in already earlier. you on it, pieces paying and of if and I clean-up of question, couple I terms think off debt of the a in interest don't expense, missed some sorry gave here But I guided

be just EPS. getting your you struggling Because can EBITDA think little are some there? guide So on should expecting be from a we bit specific to I what people more

Elizabeth Mann

a question. it. a Yes, some I dimensionality not number to but great guidance, can giving specific give it's you interest We're on

that at on it expense, obviously for look was you of than basis run our if rate a quarter was full think fourth kind the year. interest I higher

expense of for that year than 'XX I than was higher or think annualized in for interest it of XXXX, assume is fourth less it was two full quarter factors. those slightly we the between would the but the kind

Operator

Our from final with question Deutsche Alwy Faiza comes Bank.

Faiza Alwy

high and also go on providing The guidance. of the changes to XXXX me the want just end of the range from a wanted and Today, end take what specifically about all of thank you just back the I get And XXXX, you on goals. on to the factors wanted margins And to in range? I is say low the are wide. of still versus executing some congratulations to pretty sense that would range the

Elizabeth Mann

the quarter Yes. Thanks, XXXX to question. the talk and today we're Faiza, the here Really, view. for about

So talk sort of Investor longer-term about at Day. we'll discussions,

Lee Shavel

term, the margin. talk that, And to terms I Yes. on between deliver want value we in that trade-offs our ability and are of I just growth we'll can Longer say, investment think and to the look, improve what of investment the objective would about clearly margin that Faiza, returns. and demonstrate we an and delivering

strong of of to is always not find which we on at fully deliver we as we're that's have a something a working created range, cost I significantly, that to XX% margin we returns. a are where not delivering think most through initially demonstrate the dynamic. guidance but is But to try to we set value growth worked the can. strength, That's delivering also to that think result committed new XX% we to that balance and and possibly

Operator

today's questions at Thank There today's attending for further concludes this time, conference. which presentation. are you no

You may disconnect. now

Verisk Analytics (VRSK) 1 Mar 232022 Q4 Earnings call transcript