Verisk Analytics (VRSK) 10-K risk factor changes: FY2018 vs FY2017

Fraudulent or unpermitted data access and other [removed: security] [added: cyber-security] or privacy breaches may negatively impact our business and harm our reputation.

[removed: Our] [added: As with other global companies, our] systems [removed: may be vulnerable] [added: are regularly subject] to [added: cyber-attacks, cyber-threats,] physical break-ins, computer viruses, attacks by hackers and similar disruptive problems.

As [removed: cyber threats] [added: cyber-threats] continue to evolve, we [removed: may be] [added: are] required to expend significant additional resources to continue to modify [removed: or] [added: and] enhance our protective measures [removed: or] [added: and] to investigate and remediate any information security vulnerabilities [removed: or] [added: and] incidents.

Despite efforts to ensure the integrity of our systems and implement controls, processes, policies and other protective measures, we may not be able to anticipate [added: or detect] all security breaches, nor may we be able to implement guaranteed preventive measures against such security breaches.

[removed: Cyber threats] [added: Cyber-threats] are rapidly evolving and we may not be able to [removed: anticipate or] [added: anticipate,] prevent [added: or detect] all such attacks and could be held liable for any security breach or loss.

Third-party [removed: contractors] [added: contractors, including cloud-based service providers,] also may experience security breaches involving the storage and transmission of proprietary information.

During the year ended December 31, [removed: 2017,] [added: 2018,] approximately [removed: 48.9%] [added: 47%] of our revenue was derived from solutions provided to U.S. P&C primary insurers.

We provide many types of data and services that already are subject to regulation under the Fair Credit Reporting Act, Gramm-Leach-Bliley Act, Driver’s Privacy Protection Act, the European Union’s [removed: Data Protection Directive and its successor the] General Data Protection Regulation, the Dodd Frank Wall Street Reform and Consumer Protection Act and to a lesser extent, various other federal, state, and local laws and regulations.

The Company has implemented various measures to comply with the [removed: Data Protection Directive] [added: data privacy] and [added: protection principles of] the [removed: forthcoming] [added: European Union’s] General Data Protection Regulation, however, there can be no assurances that such methods will [removed: not] be [removed: invalidated as well.][added: deemed fully compliant.]

If the Company is unable to comply with the [removed: transfer mechanisms] [added: data privacy and protection principles] adopted pursuant to the [removed: Data Protection Directive and the forthcoming] General Data Protection Regulation, it will impede [removed: the] [added: our] ability to conduct business between the U.S. and the E.U. which could have a material adverse effect on our business, financial position, results of operations or cash flows.

Our operations depend on our ability, as well as that of third-party service providers to whom we have outsourced several critical functions, to protect data [removed: centers] [added: centers, whether in cloud or dedicated environments,] and related technology against damage from hardware failure, fire, flood, power loss, telecommunications failure, impacts of terrorism, breaches in security (such as the actions of computer hackers), natural disasters, or other disasters.

Any damage to our [added: or our third-party service provider’s] data centers, failure of our telecommunications links or inability to access these telesales centers or websites could cause interruptions in operations that materially adversely affect our ability to meet customers’ requirements, resulting in decreased revenue, operating income and earnings per share.

Legal Proceedings.” Our failure to successfully defend or settle [removed: such] [added: any] litigation could result in liability that, to the extent not covered by our insurance, could have a material adverse effect on our financial condition, revenues and profitability.

Given the nature of our business, we may be subject to [removed: similar] litigation in the future.

[removed: A significant additional decline in the] value of assets for which risk is transferred in market transactions could have an adverse impact on the demand for our solutions.

[added: A downturn or perceived downturn in the economy,] particularly the energy industry, could add pricing pressure, delay subscription renewals or lead to more challenging or protracted fee negotiations or generally lower acceptance of our solutions by Wood Mackenzie’s customers, which could cause a decline in our revenues and have a material adverse effect on our financial condition, results of operations and cash flows.

As a result of our acquisition of Wood [removed: Mackenzie,] [added: Mackenzie and other recent acquisitions outside of the U.S.,] we face greater exposure to movements in currency exchange rates, which may cause our revenue and operating results to differ materially from expectations.

Longer term, [removed: Brexit will require] [added: the ongoing] negotiations regarding the future terms of the U.K.’s relationship with the [removed: E.U., which] [added: E.U.] could result in the U.K. losing access to certain aspects of the single E.U. market and the global trade deals negotiated by the E.U. on behalf of its members.

As of December 31, [removed: 2017,] [added: 2018,] our ten largest shareholders owned [removed: 41.0%] [added: 41.2%] of our common stock, including [removed: 4.4%] [added: 3.9%] of our common stock owned by our Employee Stock Ownership Plan or ESOP.

Pursuant to our equity incentive plans, options to purchase approximately [removed: 8,703,249] [added: 6,730,288] shares of common stock were outstanding as of February [removed: 16, 2018.][added: 15, 2019.]

[added: We filed a registration statement under the Securities Act, which covers the shares] available for issuance under our equity incentive plans (including for such outstanding options) as well as shares held for resale by our existing stockholders that were previously issued under our equity incentive plans.

Many of our solutions involve the storage and transmission of proprietary information and sensitive or confidential data.

Although we may incur significant costs in protecting against or remediating cyberattacks or other cyber-incidents, no cyber-attack or other cyber-incident has, to our knowledge, had a material adverse effect on our business, financial condition or results of operations to date.

In addition, media or other reports of perceived security vulnerabilities to our systems or those of our third-party suppliers, even if no breach has been attempted or occurred, could also adversely impact our reputation and materially impact our business.

We have, from time-to-time, been subject to litigation alleging intellectual property infringement.

A significant additional decline in the

We may incur substantial additional indebtedness in connection with future acquisitions.

While the U.K. is currently expected to leave the E.U. on

March 29, 2019, uncertainty remains as to the exact timing and process.

In addition, on October 6, 2015 the Court of Justice of the European Union, or E.U., invalidated the Safe Harbor provisions used by the Company and numerous other U.S. businesses to comply with E.U.’s Data Protection Directive 95/46/EC.

We incurred substantial additional indebtedness in connection with the acquisition of Wood Mackenzie.

A downturn or perceived downturn in the economy,

We filed a registration statement under the Securities Act, which covers the shares

[removed: We enable our] [added: Our] customers [added: use our solutions] to make better decisions about [removed: risk, investments,] [added: risk] and [removed: operations] [added: opportunities] with greater [removed: precision, efficiency,] [added: efficiency] and discipline.

[removed: We also help customers across] [added: In] the [removed: globe protect] [added: United States, or U.S.,] and [removed: grow] [added: around] the [removed: value of] [added: world, we help customers protect] people, [removed: property] [added: property,] and financial assets.

We offer predictive analytics and decision support solutions to customers in rating, underwriting, claims, catastrophe and weather risk, [removed: global risk analytics,] natural resources intelligence, [added: economic forecasting,] and many other fields.

We [removed: organize our business in] [added: previously reported results based on] two [removed: segments:] [added: operating segments,] Decision Analytics and Risk Assessment.

[removed: Our Decision Analytics segment provides solutions to our customer] [added: Verisk is a leading data analytics provider serving customers] in insurance, energy and specialized markets, and financial services.

[removed: Our Decision Analytics segment] [added: This segment's] revenues represented approximately [removed: 64.1%] [added: 71%] and [removed: 63.7%] [added: 72%] of our revenues for the years ended December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] respectively.

Our [removed: Risk Assessment] [added: Insurance] segment provides [removed: statistical, actuarial and] underwriting [added: and ratings, and claims insurance] data for the U.S. P&C insurance industry.

Our [removed: Risk Assessment segment] [added: Energy and Specialized Markets segment's] revenues represented [removed: 35.9%] [added: approximately 22%] and [removed: 36.3%] [added: 21%] of our revenues for the years ended December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] respectively.

See Note [removed: 9 of] [added: 11 to] our consolidated financial statements included in this annual report on Form 10-K.

We earn revenues through [removed: subscriptions, long-term] agreements [added: for hosted subscriptions, advisory/consulting services,] and [removed: on a] [added: for] transactional [removed: basis,] [added: solutions,] recurring and non-recurring.

[removed: Certain] [added: In addition, certain] of our solutions are [removed: also] paid for by our customers on a transactional [removed: basis.][added: basis, recurring and non-recurring.]

For example, we have solutions that allow our customers to [removed: obtain] [added: access] property-specific rating and underwriting information to price a policy on a commercial building, or compare a P&C [removed: insurance, medical] [added: insurance] or [removed: workers’] [added: a workers'] compensation claim with information in our [removed: databases.][added: databases, or use our repair cost estimation solutions on a case-by-case basis.]

We also provide [removed: advisory] [added: advisory/consulting] services, which help our customers get more value out of our analytics and their subscriptions.

For the years ended December 31, [removed: 2017] [added: 2018] and [removed: 2016, 19.2%] [added: 2017, approximately 20%] and [removed: 16.5%] [added: 19%, respectively,] of our revenues were derived from providing transactional [removed: recurring] and [removed: non-recurring solutions, respectively.][added: advisory/consulting solutions.]

[removed: For the years ended December 31, 2017 and 2016, 75.2%] [added: Approximately 73%] and [removed: 78.6%] [added: 72%] of the revenues in our [removed: Decision Analytics] [added: Financial Services] segment [added: for the years ended December 31, 2018 and 2017, respectively,] were derived from subscriptions [removed: and] [added: with] long-term agreements for our solutions, respectively.

[removed: For the years ended December 31, 2017 and 2016, 90.8%] [added: Approximately 82%] and [removed: 92.0%] [added: 81%] of the revenues in our [removed: Risk Assessment] [added: Insurance] segment [added: for the years ended December 31, 2018 and 2017] were derived from [added: hosted] subscriptions [removed: and long-term] [added: through] agreements [added: (generally one to five years)] for our [removed: solutions, respectively.][added: solutions.]

Our customers in this segment include most of the [removed: P&C insurance] [added: top 10 global energy] providers [removed: in] [added: around] the [removed: U.S.][added: world.]

Personnel expenses, which represented [removed: 50.1%] [added: approximately 58%] and [removed: 47.7%] [added: 59%] of our total [added: operating] expenses for the years ended December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] respectively, include salaries, benefits, incentive compensation, equity compensation costs, sales commissions, employment taxes, recruiting costs, and outsourced temporary agency costs.

We [removed: allocate] [added: assign] personnel expenses between two categories, cost of revenues and selling, general and administrative costs, based on the actual costs associated with each employee.

[removed: A significant portion of our other] operating costs, such as facilities and communications, are either captured within cost of revenues or selling, general and administrative expense based on the nature of the work being performed.

However, part of our corporate strategy is to invest in new [removed: solutions,] [added: solutions and new businesses,] which may offset margin expansion.

We serve customers in three primary vertical markets: P&C insurance, [removed: energy,] [added: energy] and [added: specialized markets, and] financial services.

Growth in P&C insurers’ direct written premiums is cyclical, with total industry premium growth receding from a peak of 14.8% in 2002 to a trough of negative 3.1% in 2009 and subsequently recovering to 4.4% in 2012, 4.3% in 2013, 4.4% in 2014, 3.7% in [removed: 2015 and] [added: 2015,] 3.7% in [removed: 2016.][added: 2016 and 4.7% in 2017.]

These events [removed: also] illustrate the need for broader coverages, such as flood to meet the changing needs of communities.

Fifth, many countries are reviewing their existing fiscal policies to ensure that they are [removed: competitive, as well as developing new terms to] [added: competitive and] attract [removed: investment in new opportunities.][added: investment.]

[removed: We] [added: As environmental concerns and the move to decarbonization gather pace, we] will continue to evolve our offerings to meet the needs of our customers in a dynamic market and remain increasingly well positioned to serve our customers' information and analytical needs.

Market trends continue to influence our [removed: financial services vertical] [added: Financial Services segment] in important ways.

As we look forward towards [removed: 2018,] [added: 2019,] increasing [removed: trends in delinquency and] fraud [added: and delinquency loss] rates [removed: have resulted in an increased] [added: worldwide are strengthening] demand for robust risk [removed: solutions.][added: solutions which we are addressing via a range of new fraud solutions, which we have initially launched in Mexico.]

In order to better serve our customers, add to our data asset, and expand our expertise, we made a number of [removed: strategic] acquisitions in the [added: past year, including Marketview, which provides analytical solutions for banks, acquirers, merchants and government in New Zealand.]

We acquired [removed: twenty-one] [added: twenty-two] businesses since January 1, [removed: 2015.][added: 2016.]

See Note [removed: 8] [added: 10] to our consolidated financial statements included in this annual report on Form 10-K for further discussions on the below acquisitions.

On December 29, 2017, we acquired 100 percent of the stock of PowerAdvocate, [removed: Inc., or PowerAdvocate,] a provider of market, cost intelligence, and supply chain solutions serving the energy sector.

Within our [removed: Decision Analytics] [added: Energy and Specialized Markets] segment, PowerAdvocate expands our offerings to the energy sector by adding proprietary spend data and cost models and providing insight into customers' cost savings opportunities.

Within our [removed: Decision Analytics] [added: Insurance] segment, Service Software expands our offerings to the insurance sector by integrating with the existing loss quantification solutions, which makes it possible for restoration professionals to save time by sharing job information, reducing duplicate data entry, and increasing productivity.

On November 9, 2017, we acquired 100 percent of the stock of Rebmark Legal Solutions Ltd., or Rebmark, a provider of injury claims solutions, within the [removed: Decision Analytics] [added: Insurance] segment.

On August 31, 2017, we acquired 100 percent of the stock of [removed: Lundquist Consulting, Inc., or] LCI, a provider of risk insight, prediction, and management solutions for banks and creditors.

LCI has become part of the [removed: financial services vertical within the Decision Analytics] [added: Financial Services] segment.

On August 23, 2017, we acquired 100 percent of the stock of [removed: Sequel Business Solutions Ltd., or] Sequel, a provider of commercial and specialty insurance and reinsurance software based in the U.K. Sequel has become part of the [removed: insurance vertical within the Decision Analytics] [added: Insurance] segment.

On August 3, 2017, we acquired 100 percent of the stock of [removed: G2 Web Services LLC, or] G2, a provider of merchant risk intelligence solutions for acquirers, commercial banks, and other payment system providers.

G2 has become part of the [removed: financial services vertical within the Decision Analytics] [added: Financial Services] segment.

Using advanced technologies to collect and analyze billions of records, we draw on unique data assets and deep domain expertise to provide innovations that may be integrated into customer workflows.

During the first quarter of 2018, the chief operating decision maker, or CODM, changed how he makes operating decisions, assesses the performance of the business, and allocates resources in a manner that caused the Company's operating segments to change.

Consequently, effective as of the first quarter of 2018, our operating segments are based on three vertical markets we serve: Insurance, Energy and Specialized Markets, and Financial Services.

These three operating segments are also our reportable segments, which have been retroactively recast to reflect the new segments in all periods presented.

Our Financial Services segment provides competitive benchmarking, decisioning algorithms, business intelligence, and customized analytic services to financial institutions, payment networks and processors, alternative lenders, regulators and merchants.

Our Financial Services segment's revenues represented approximately 7% of our revenues for the years ended December 31, 2018 and 2017.

Our customers in this segment include most of the P&C insurance providers in the U.S. Approximately 78% and 82% of the revenues in our Energy and Specialized Markets segment for the years ended December 31, 2018 and 2017, respectively, were derived from hosted subscriptions with long-term agreements for our solutions.

Our customers in this segment include financial institutions, payment networks and processors, alternative lenders, regulators, merchants, and all of the top 30 credit card issuers in North America, the United Kingdom, and Australia.

A significant portion of our other

Based on the most recent results available, direct premium growth and net premium growth accelerated in 2018.

However, insurers were also challenged by heightened catastrophic losses in 2018 associated with major hurricanes, such as Florence and Michael, and several devastating wildfires in the state of California, coupled with additional losses reported from the three major hurricanes in 2017 - Harvey, Irma, and Maria.

During 2018, the Brent oil price reached a peak of over approximately 80 dollar per barrel before falling under approximately 60 dollar per barrel by year end reflecting an oversupply in the market.

The Organization of the Petroleum Exporting Countries, or OPEC, announced a significant cut in production beginning January 1, 2019 to help balance the market.

First, capital investments have recovered from the cyclical low, the start of spend on a new global phase of significant liquefied natural gas projects adding momentum in 2019.

Second, the industry’s ongoing progress in reducing costs have been boosted by digitalization initiatives as well as over-capacity in the service sector in many regions, leading to improved economics and more projects reaching a final investment decision.

Third, tight oil production in the U.S. lower 48 is still on a strong growth trajectory and remains a focus of global merger and acquisition activity as the industry consolidates.

Fourth, resource capture continues to be focused on lower risk opportunities with competitive bidding in 2019 to develop discovered fields in Qatar (gas) and Brazil (oil).

In the wider energy sector the energy transition is gaining momentum, most evidently in the rapid penetration of renewables into power and the emergence of electric vehicles – the latter set to present a competitive challenge to the internal combustion engine in the coming decades and

with implications for oil demand in the long term.

Petrochemicals is a key growth segment for oil demand, but the disposal of plastics is increasingly in the public eye as a social and environmental concern.

New legislation limiting sulphur content in marine fuels comes into effect in 2020 with profound implications for refiners and major fuel consumers, such as airlines.

Additionally, higher levels of regulatory scrutiny as well as greater regulatory alignment worldwide is increasing demand for compliance and reporting tools, which we are tackling via our range of compliance products developed both within our Financial Services segment.

These new businesses offer new solutions for existing and new clients of our core business, and enable us to develop product and cost synergies going forward, and join our existing businesses that we acquired earlier and have integrated during 2018.

2018 Acquisitions

On December 14, 2018, we acquired Rulebook, whose proprietary pricing engine can be used for internal pricing and underwriting as well as external distribution for the insurance market through its platform.

Rulebook furthers our goal of providing solutions to the global insurance market, including a comprehensive chain of solutions to specialty insurers for mitigating risk and optimizing total cost of operations.

Rulebook is part of the underwriting and ratings category within the Insurance segment.

On June 20, 2018, we acquired 100 percent of the stock of Validus-IVC Limited, or Validus, a provider of claims management solutions and developer of the subrogation portal in the UK, verifyTM.

Validus has become part of the claims category within our Insurance segment.

The integration of Validus' verifyTM platform with our global claims analytic services allows insurers to take advantage of enhanced analytic and technology tools to help improve and automate the claims settlement process.

On February 21, 2018, we acquired 100 percent of the stock of Business Insight Limited, Business Insight, a provider of predictive analytics for insurers in the U.K. and Ireland.

Business Insight has become part of the underwriting and ratings category within the Insurance segment.

Business Insight offers a comprehensive set of peril models to support underwriting and rating for the commercial property and homeowners insurance market.

Marketview is a provider of consumer spending analysis and insights across the retail, hospitality, property, and government sectors in New Zealand.

Marketview has become part of the Financial Services segment.

The acquisition helps expand the our solutions related to consumer spending analytics across the Australasia and Oceania regions by combining its domain expertise and proprietary data assets with those of Marketview.

The purchase price consisted of a cash consideration of $714.6 million, net of closing adjustments of $5.4 million, and proceeds from a promissory note associated with the sale of $100.0 million, that was received in August 2018.

Revenues were $2,395.1 million for the year ended December 31, 2018 compared to $2,145.2 million for the year ended December 31, 2017, an increase of $249.9 million or 11.6%.

In 2017 and 2018, we acquired the following companies, Rebmark, Service Software, PowerAdvocate, Marketview, Business Insight, Validus, and Rulebook, collectively referred to as our recent acquisitions, which we define as acquisitions not owned for a significant portion of both the current period and/or prior period and would therefore impact the comparability of the financial results.

Excluding revenues of $110.9 million from our recent acquisitions, our revenue growth was $139.0 million or 6.5%.

We provide value to our customers by supplying proprietary data that, combined with our analytic methods, creates embedded decision support solutions.

We are one of the largest aggregators and providers of data pertaining to U.S. property and casualty, or P&C, insurance risks.

Our customers use our solutions to make better decisions with greater efficiency and discipline.

Results of operations for the healthcare business are reported as discontinued operations for the year ended December 31, 2016 and for all prior periods presented.

As necessary, the amounts have been retroactively adjusted in all periods presented to give recognition to the discontinued operations.

Our long-term agreements are generally for periods of three to five years.

We recognize revenue from subscriptions ratably over the term of the subscription and most long-term agreements are recognized ratably over the term of the agreement.

We earn these revenues as our solutions are delivered or services performed.

In general, they are billed monthly at the end of each month.

Based on our experience, insurers more closely scrutinize their spending in periods of more challenging growth and tend to focus on making an underwriting profit.

In addition, 2017 has been a challenging year for insurers with the catastrophe losses related to the three major hurricanes - Harvey, Irma, and Maria - making landfall in the U.S. in the third quarter 2017 causing insurance industry’s net income to decline.

During 2017, oil prices showed a modest improvement and we expect a continued sense of optimism in the energy markets in 2018.

First, capital investments are anticipated to grow moderately in 2018, signaling an end to the period of reductions since 2014.

Second, there is a surge in tight oil production in 2018 driven by a considerable increase from the Permian Basin in the U.S. (a region benefiting from new fracking production technology).

Third, over-supplies in the service sector provide an opportunity for operators to lock in prices below historical market rates.

Fourth, opportunities from discovered resources and exploration have been increasingly undertaken.

Several Middle Eastern countries expect to award significant contracts to further develop discovered resources.

In addition, there will likely be growing interest in Latin American opportunities.

In terms of the wider energy sector, we foresee the continued growth of the electric vehicle market, albeit from a low base, which is anticipated to develop into one of the most disruptive forces in the sector.

Falling renewable energy costs around the world will also underpin the ongoing shift towards a low carbon economy.

past year, most importantly (1) G2, which provides merchant risk intelligence solutions for acquirers, commercial banks and their value chain partners.

G2 provides solutions to manage and monitor merchant and business risk within an increasingly complex payments ecosystem using advanced artificial intelligence technologies combined with expert analysts.

(2) LCI, a company that provides bankruptcy management solutions to improve customer's profitability through recovery of bankrupt accounts while protecting the customer's brand by conforming to industry compliance.

LCI maintains bankruptcy data (servicing more than 1.3 billion accounts), bankruptcy process automation software, expert services, and research to automate expensive processes in the bankruptcy lifecycle.

(3) Fintellix, a company that provides Risk and Regulatory Reporting solutions to enterprise banks at a significantly lower cost of compliance, as well as jumpstarting analytics capabilities in smaller and regional banks.

We stand confident of our position with these acquisitions, with the proprietary data and solutions we offer, to help our customers achieve their business and regulatory objectives.

2015 Acquisitions

On November 20, 2015, we acquired 100 percent of the stock of The PCI Group, or PCI.

PCI is a consortium of five specialist companies that offer integrated data and subscriptions research in the chemicals, fibers, films, and plastics sectors.

PCI has become part of the energy vertical, and continues to provide services to enhance our chemicals capabilities in the Decision Analytics segment.

Infield is a provider of business intelligence, analysis, and research to the oil, gas, and associated marine industries.

Infield has become part of the energy vertical and continues to provide services to enhance our upstream and supply chain capabilities in the Decision Analytics segment.

On May 19, 2015, we acquired 100 percent of the stock of Wood Mackenzie.

This acquisition advances our strategy to expand internationally and positions ourselves in the global energy market.

Wood Mackenzie is included in the energy and specialized markets vertical, formerly named the specialized markets vertical, of the Decision Analytics segment.

On June 1, 2016, we sold our healthcare business, Verisk Health, for a price of $714.6 million.

Revenue growth within Decision Analytics was primarily driven by our insurance categories.

Revenues in our Risk Assessment segment, excluding our recent acquisitions of RII, GeoInformation, MarketStance, and Healix increased by $34.0 million or 4.7%.

Both types of categories within Risk Assessment, industry-standard insurance programs and property-specific rating and underwriting information, contributed to its revenue growth.

Decision Analytics

At December 31, [removed: 2017,] [added: 2018,] we had borrowings outstanding under our credit facility of [removed: $715.0] [added: $415.0] million, which bear interest at variable rates based on LIBOR plus 1.125% to [removed: 1.625%, depending] [added: 1.625%depending] on certain ratios defined in the credit agreement.

Based on our overall interest rate exposure at December 31, [removed: 2017,] [added: 2018,] a one percent change in interest rate would result in a change in annual pre-tax interest expense of approximately [removed: $7.2] [added: $4.2] million based on our current borrowing levels.

Movements in the U.S. dollar to British pounds and other foreign currency exchange rates did not have a material effect on our revenue for the year ended December 31, [removed: 2017.][added: 2018.]

[added: Consolidated] Financial Statements and Supplementary Data

The information required by this Item is set forth on pages [removed: 54] [added: 52] through [removed: 106] [added: 104] of this annual report on Form 10-K.

In [removed: 2017,] [added: 2018,] our customers included all of the top 100 property and casualty, or P&C, insurance providers in the U.S. for the lines of P&C services we offer, and all of the top 30 credit card issuers in North America, the United Kingdom and Australia, as well as 9 of the top 10 global energy providers around the world.

We offer our solutions and services primarily through annual subscriptions or long-term agreements, which are typically pre-paid and represented over 80% of our revenues in [removed: 2017.][added: 2018.]

For the year ended December 31, [removed: 2017,] [added: 2018,] we had revenues of [removed: $2,145.2] [added: $2,395.1] million and net income of [removed: $555.1] [added: $598.7] million.

For the five year period ended December 31, [removed: 2017,] [added: 2018,] our revenues and net income grew at a compound annual growth rate, or CAGR, of [removed: 12.8%] [added: 13.7%] and [removed: 12.4%,] [added: 10.6%,] respectively.

Additionally, in 2017, we acquired G2 Web Services, LLC, or G2; Sequel Business Solutions Ltd., or Sequel; Lundquist Consulting, Inc., or LCI; and PowerAdvocate, Inc., or PowerAdvocate, to further strengthen our position in the [removed: insurance, financial services] [added: Insurance, Energy] and [removed: energy verticals.][added: Specialized Markets and Financial Services segments.]

[removed: See Note 17] of our consolidated financial statements included in this annual report on Form 10-K for further information.

[removed: In the Decision Analytics segment, we] [added: We also] develop predictive models to forecast scenarios and produce both standard and customized analytics that help our customers better manage their businesses, including [removed: predicting loss, selecting and pricing risk,] detecting fraud before and after a loss event, and quantifying losses.

Insurance [added: Segment]

Our [added: claims] insurance solutions provide our customers analytics in the areas of fraud detection, [removed: catastrophe modeling, loss] [added: repair cost] estimation, and [removed: underwriting,] [added: aerial imagery business,] including emerging areas of interest within these categories.

Our database contains information for more than [removed: 1.2] [added: 1.3] billion claims and is the world’s largest database of P&C claims information used for claims and investigations.

Insurers and other participants submit new claims more than [removed: 200,000] [added: 240,000] a day on average across all categories of the U.S. P&C insurance industry.

We are [removed: also] a leader in and pioneered the field of probabilistic catastrophe modeling used by insurers, reinsurers, financial institutions, and government to manage their risk from extreme events.

We have developed models for hurricanes, earthquakes, winter storms, tornadoes, hailstorms, and floods in more than [removed: 100] [added: 110] countries, as well as pandemics worldwide.

We also provide data, [removed: analytics] [added: analytics,] and networking products for professionals involved in estimating all phases of building repair and reconstruction.

We also offer our customers access to wholesale and retail price lists, which include structural repair and restoration pricing for [removed: 468] [added: 467] separate economic areas in North America.

We revise this information [removed: monthly, and] [added: monthly and,] in the aftermath of a major disaster, we can update the price lists as often as weekly to reflect rapid price changes.

We estimate that more than 80% of insurance repair contractors and service providers in the U.S. and Canada with computerized estimating systems use our building and repair [added: cost estimation] pricing data.

We are [removed: also] a leading provider of solutions for the personal underwriting markets, including homeowners and auto lines.

We build and maintain widely used, industry-standard tools that assist insurers in underwriting and rating, that is, measuring and selecting risks and pricing coverage appropriately to ensure fairness to the consumer and a reasonable return for [added: the insurer.]

Energy and Specialized Markets [added: Segment]

We are a leading provider of data analytics [removed: for] [added: across] the [added: natural resources value chain including the] global energy, chemicals, [removed: and metals] [added: metals, mining, power] and [removed: mining industries.][added: renewables sectors.]

Our growing customer base includes international and national energy companies, as well as chemicals, [removed: and metals] [added: metals, mining, power utilities] and [removed: mining] [added: renewables] companies, financial institutions, and governments.

Financial Services [added: Segment]

Our teams are located across U.S., U.K., Canada, Australia, New Zealand, the United Arab Emirates, [added: Mexico] and India, delivering unique products and services to an expanding customer [removed: base.][added: base that values the comprehensiveness of our data and solutions, as well as our full wallet spend view of a consumer.]

In addition, we provide solutions in the media effectiveness space given the unique nature and strength of our [removed: partnerships, the comprehensiveness of our data] [added: partnerships] and [removed: the full wallet spend view of a consumer.][added: through our developing Marketview brand.]

Specifically, we use comprehensive transaction, risk, behavioral, and bureau-sourced account data to assist customers in making better business decisions through [added: analysis and analytical solutions.]

We maintain a comprehensive and granular direct observation financial services industry database for credit card, debit card, and deposit [added: transactions, as well as merchant and collections] transactions.

Our [removed: Risk Assessment] [added: Insurance] segment [added: primarily] serves our P&C insurance customers and focuses on the prediction of loss, the selection and pricing of risk, and compliance with their reporting requirements in each U.S. state in which they operate.

We have more than 120 specialized lawyers and insurance experts reviewing changes in each state’s insurance rules and regulations, including an average of [removed: more than 13,500] [added: approximately 13,000] legislative bills, 9,000 regulatory actions and 2,000 court [removed: cases] [added: decisions] per year, to make any required changes to our policy language and rating information.

For example, in the homeowners line of insurance, we maintain policy language and rules for 6 basic coverages, [removed: 292] [added: 283] national endorsements, and [removed: 633] [added: 611] state-specific endorsements.

Over the past four decades, we have developed core expertise in acquiring, processing, managing, and operating large and comprehensive databases that are the foundation of our [removed: Risk Assessment segment.][added: insurance offerings.]

Each year, P&C insurers send us approximately [removed: 3.8] [added: 3.7] billion detailed individual records of insurance transactions, such as insurance premiums collected or losses incurred.

We maintain a database of more than [removed: 21.0] [added: 21.4] billion statistical records, including approximately [removed: 8.6] [added: 9.1] billion commercial lines records and approximately [removed: 12.4] [added: 12.3] billion personal lines records.

Our proprietary quality process includes more than [removed: 2,800] [added: 2,900] separate checks to ensure that the data meets our high standards of quality.

[added: In addition, our actuarial consultants provide customized services for our] customers that include assisting them with the development of independent insurance programs, analysis of their own underwriting experience, development of classification systems and rating plans, and a wide variety of other business decisions.

Our ProMetrix® platform contains information on 6 million commercial buildings, [removed: 26] [added: 27.5] million businesses, [added: loss costs] and virtually all communities in the U.S. We have a staff of approximately [removed: 600] [added: 550] field representatives strategically located around the U.S. who observe and report on conditions at commercial and residential properties, evaluate community fire-protection capabilities and assess the effectiveness of municipal building-code enforcement.

Each year, our field staff visits approximately [removed: 285,000] [added: 290,000] commercial properties to collect information on new buildings and verify building attributes.

We provide field-verified and validated data on the fire protection services for approximately [removed: 46,000] [added: 40,000] fire response jurisdictions.

Over the past five years, we have grown our revenues at a CAGR of [removed: 12.8%] [added: 13.7%] through the successful execution of our business plan.

[added: We believe we can continue to expand] the use of our intellectual capital profitably and apply our analytic methods in new markets where significant opportunities for long-term growth exist.

In 2018, we acquired Rulebook Limited, or Rulebook, to further our international insurance presence in the overseas market.

We organize our business in three segments: Insurance, Energy and Specialized Markets and Financial Services.

See Note 19.

Underwriting & rating

Claims

We estimate that more than 80.0% of insurance repair contractors and service providers in the U.S. and Canada with computerized estimating systems use our building and repair pricing data.

We provide market and cost intelligence to energy companies to optimize financial results.

We combine information, innovative technology, and expert services to produce market intelligence.

We aim to help asset-intensive clients achieve operational and financial excellence, increase profitability, and optimize business performance.

In addition, our client service team of technical and professionals plays an integral role at a number of energy companies.

We have engineers and supply chain professionals who consult on capital projects.

Our team members include experts from the energy industry with hands-on operational experience.

Our customers within Energy and Specialized Markets segment include 9 of the top 10 global energy providers around the world.

Within the Financial Services segment, our customers include financial institutions, payment networks and processors, alternative lenders, regulators, merchants, and all of the top 30 credit card issuers in North America, the United Kingdom, and Australia.

We

Within the Financial Services segment, our unique datasets and wallet solutions means that we have no direct competitors, and we work closely to create partnerships for mutual clients with organizations such as the card networks and credit bureaus to deepen ongoing relationships and create new value solutions.

Our key competitors for our major brands are EverCompliant, WebShield, Trustwave, LegitScript, Lexus Nexis, American Infosource, and Phin Solutions.

identifying new sales opportunities.

services and our logos and tag lines, many of which are registered.

As of December 31, 2018, we employed 7,951 full-time and 233 part-time employees.

We organize our business in two segments: Decision Analytics and Risk Assessment.

Decision Analytics Segment

Our businesses in this segment are categorized by the primary vertical end market for their services.

Our solutions are built on unique data sets that are dynamic and updated based on new data and events.

Our analytic methods and proprietary data sets combined with our deep industry expertise, provide us with a significant competitive advantage.

We also provide an expert scoring system that helps distinguish between suspicious and meritorious claims, and products that use link analysis technology to help visualize and fight insurance fraud.

Our estimates allow our customers to set loss reserves, deploy field adjusters and verify internal company estimates.

Our estimates also keep insurers, their customers, regulators, and other interested parties informed about the total costs of disasters.

We also provide our customers access to daily reports on severe weather and catastrophes and we maintain a database of information on catastrophe losses in the U.S. dating back to 1950.

the insurer.

analysis and analytical solutions.

Risk Assessment Segment

Industry-Standard Insurance Programs

In addition, our actuarial consultants provide customized services for our

By building on our insurance industry expertise and recent acquisitions, we have expanded our solution set to serve customers in certain non-U.S. markets.

Property-Specific Rating and Underwriting Information

We believe we can continue to expand

Decision Analytics Customers

Our customers included all of the top 30 credit card issuers in North America, the United Kingdom, and Australia, as well as 9 of the top 10 global energy providers around the world.

Risk Assessment Customers

Decision Analytics Competitors

Risk Assessment Competitors

As of December 31, 2017, we had a sales force of 312 people in our continuing operations.

Within the company, several areas have sales teams that specialize in specific products and services.

opportunities for their assigned products and segments.

revenue.

As of December 31, 2017, we employed 7,079 full-time and 225 part-time employees in our continuing operations.

The public may read and copy any materials filed by Verisk with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549.

The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

The complaint alleges that our Roof InSight, [added: or now known as Geomni Roof,] Property InSight [added: product, or now known as Geomni Property] and Aerial Sketch [removed: products] [added: product in combination with our Xactimate product] infringe seven patents owned by Eagle View and Pictometry namely, Patent Nos. [removed: 436, 840, 152, 880, 770,] [added: 8,078,436, or the 436 patent, 8,170,840, or the 840 patent, 8,209,152, or the 152 patent, 8,542,880, or the 880 patent, 8,818,770, or the 770 patent, 8,823,732, or the] 732 [added: patent,] and [removed: 454.][added: 8,825,454, or the 454 patent.]

On November 30, 2015, plaintiffs filed a First Amended Complaint adding Patent Nos. [added: 9,129,376, or the] 376 [added: patent] and [added: 9,135,737, or the] 737 [added: patent] to the [removed: Patents in Suit.][added: lawsuit.]

The First Amended Complaint seeks an entry of judgment by the Court that defendants have and continue to directly infringe and/or indirectly infringe, [added: including] by way of inducement the Patents-in-Suit, permanent injunctive relief, damages, costs and attorney’s fees.

On May [removed: 17,] [added: 19,] 2017, the District Court so ordered a Joint Stipulated Order of Partial Dismissal with Prejudice dismissing all claims or assertions pertaining to Pictometry Patents Nos. 880 and 732 and certain [removed: enumerated] [added: asserted] claims [removed: or assertions pertaining to] [added: of the] Eagle View Patents Nos. 436, 840, 152, 770, 454, 376 and 737, or collectively the “Patents in Suit”.

At this time, it is not reasonably possible to determine the ultimate resolution of, or estimate the liability related [removed: to] [added: to,] this matter.

On [removed: August 1, 2014,] [added: December 10, 2018,] we were served with [removed: an] [added: a First] Amended Complaint filed in the United States District Court for the [added: Northern] District of [removed: Colorado] [added: California] titled [removed: Snyder, et.][added: Sheahan, et al.]

Plaintiffs claim that [removed: we and ISO, along with all the other defendants,] [added: defendants] violated [removed: state and] federal antitrust [removed: and racketeering laws] [added: law] as well as [removed: state] [added: California consumer protection law and] common law.

Eagle View further reduced the number of asserted claims pertaining to the Patents in Suit to 18 asserted claims.

Thereafter, Eagle View dropped the 152 patent and further reduced the number of asserted claims from the six remaining Patents in Suit to 11 asserted claims.

Fact discovery and expert discovery are now closed and defendants' summary judgment motions were fully submitted on October 26, 2018.

On December 6, 2018, the Court denied Eagle View’s motion for summary judgment that a key prior art reference be excluded.

On December 20, 2018, the Court denied our motion for summary judgment of equitable estoppel.

On January 29, 2019, the Court denied our motion for summary judgment of unpatentability pursuant to Section 101 of the Patent Statute.

360Value Litigation

State Farm General Insurance Co., Inc., et al.

The action is brought by California homeowners, on their own behalf and on behalf of an unspecified putative class of State Farm policyholders whose homes were damaged or lost during the Northern California wildfires of 2017, against State Farm as well as us, ISO, and Xactware Solutions, Inc. Plaintiffs served a Second Amended Complaint on January 6, 2019.

Like the First Amended Complaint, it alleges that defendants through the use of our 360Value product conspired to under-insure plaintiffs’ homes by issuing undervalued policies and underestimating the costs of rebuilding those homes.

At this time, it is not reasonably possible to determine the ultimate resolution of, or estimate the liability related to, this matter.

Intellicorp Records, Inc. Litigation

On September 9, 2015, we were served with a nationwide putative class action complaint filed in the Court of Common Pleas, Cuyahoga County in Ohio naming our subsidiary Intellicorp Records, Inc., or Intellicorp, titled Sherri Legrand v.

Intellicorp Records, Inc. and The Cato Corporation et al.

Defendants removed the case to the United States District Court for the Northern District of Ohio on October 8, 2015.

Plaintiffs filed their First Amended Class Action Complaint on November 5, 2015, or Amended Complaint, which like the prior complaint claims violations of the Fair Credit Reporting Act, or FCRA and alleges two putative class claims against Intellicorp, namely (i) a section 1681k(a) claim on behalf of all individuals who were the subjects of consumer reports furnished by Intellicorp, which contained public record information in the “Government Sanctions” section of the report on or after September 4, 2013 and continuing through the date the class list is prepared, and (ii) a section 1681e(b) claim on behalf of all individuals who were the subjects of consumer reports furnished by Intellicorp, which contained public record information in the “Government Sanctions” section of the report where the address or social security number of the subject of the report do not match the social security number or address contained in the government database on or after September 4, 2013 and continuing through the date the class list is prepared.

Count I of the Amended Complaint alleges that defendant Cato violated the FCRA by procuring consumer reports on the plaintiff and other class members without making the stand-alone disclosure required by FCRA section 1681b(b)(2)(A)(i).

Counts II and III allege that Intellicorp violated the FCRA section 1681e (b) by failing to follow reasonable procedures to assure maximum accuracy of the adverse information included in its consumer reports and FCRA section 1681k (a) by failing to maintain strict procedures to assure that the public record information reported, which was likely to have an adverse effect on the consumer was complete and up to date, respectively.

The Amended Complaint alleges that defendants acted willfully and seeks statutory damages for the classes in an amount not less than one hundred dollars and not more than one thousand dollars per violation, punitive damages, equitable relief, costs and attorney’s fees.

On April 24, 2017, the parties agreed to resolve the litigation in a Settlement Agreement and Release and plaintiffs filed their Motion for Preliminary Approval of the settlement on the same day.

The settlement provides for a non-material cash payment by us, as well as certain non-monetary relief.

The District Court granted the Motion for Preliminary Approval on April 25, 2017 and issued its Final Approval Order on October 31, 2017.

Insurance Services Office, Inc. Litigation

al.

ACORD Corp., et al.

The action is brought by nineteen individual plaintiffs, on their own behalf and on behalf of a putative class, against more than 120 defendants, including us and ISO.

Except for us, ISO and the defendant Acord Corporation, which provides standard forms to assist in insurance transactions, most of the other defendants are property and casualty insurance companies that plaintiffs claim conspired to underpay property damage claims.

On September 8, 2014, the Court entered an Order striking the Amended Complaint and granting leave to the plaintiffs to file a new complaint.

On October 13, 2014, plaintiffs filed their Second Amended Complaint, which was re-filed by plaintiffs to correct errors as the Third Amended Complaint.

The Third Amended Complaint similarly alleges that the defendants conspired to underpay property damage claims, but does not specifically allege what role we or ISO played in the alleged conspiracy.

It claims that we and ISO, along with all the other defendants, violated state and federal antitrust and racketeering laws as well as state common law, and seeks all available relief including injunctive, statutory, actual and punitive damages as well as attorneys’ fees.

On January 15, 2016, the Court granted defendants’ motions to dismiss all claims asserted in the Third Amended Complaint.

Plaintiffs filed a motion for reconsideration of this dismissal on February 16, 2016.

The Court granted defendants’ motion to strike the motion for reconsideration on March 2, 2016 and gave plaintiffs leave to file another motion for reconsideration in accordance with the rules which plaintiffs filed on March 11, 2016 and, which was denied by the Court on April 25, 2016.

On April 1, 2016, plaintiffs also filed a Notice of Appeal of the Court’s January 15, 2016 Order, which dismissed all claims in the Third Amended Complaint.

Plaintiffs also filed an appeal of the Court’s denial of the motion for reconsideration, which the Court of Appeals for the 10th Circuit consolidated with the appeal of the Court’s January 15, 2016 dismissal.

Appellants filed their brief in support of the consolidated appeal on July 21, 2016 and Appellees filed their brief in response on September 21, 2016.

On April 6, 2017, the Court of Appeals for the 10th Circuit affirmed the Court’s dismissal of the Third Amended Complaint.

Appellants filed a motion for en banc reconsideration of the 10th Circuit’s affirmance of the dismissal of the Third Amended Complaint which was denied on May 26, 2017.

Appellants filed their petition for a writ of certiorari in the Supreme Court on August 24, 2017 which was denied on October 30, 2017.

Plaintiffs filed a Petition for Rehearing to the Supreme Court on November 27, 2017 which was denied on January 8, 2018.

For the fiscal year ended December 31, [removed: 2017][added: 2018]

Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate Web site, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

| Non-accelerated filer | | ☐ [removed: (Do not check if a smaller reporting company)] | | Smaller reporting company | | ☐ |

As of June 30, [removed: 2017,] [added: 2018,] the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was [removed: $13,053,902,417] [added: $16,796,964,310] based on the closing price reported on the NASDAQ Global Select Market on such date.

As of February [removed: 16, 2018,] [added: 15, 2019,] there were [removed: 165,020,572] [added: 163,509,530] shares outstanding of the registrant's Common Stock, par value $.001.

Certain information required by Part III of this annual report on Form 10-K is incorporated by reference to our definitive Proxy Statement for our [removed: 2018] [added: 2019] Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission not later than 120 days after December 31, [removed: 2017.][added: 2018.]

| | Item 1. | [removed: [Business](#s4EC20597942A5C3398C79743870D9051)] [added: [Business](#s3747ABAC9B0B52C6862ACEBFAA0E807E)] | [removed: [4](#s4EC20597942A5C3398C79743870D9051)] [added: [4](#s3747ABAC9B0B52C6862ACEBFAA0E807E)] |

| | Item 1A. | [Risk [removed: Factors](#s096DA084DB9B5A349DE59C255FA7273B)] [added: Factors](#sEDD7974ECBC45E10999D6D7529E5EC90)] | [removed: [15](#s096DA084DB9B5A349DE59C255FA7273B)] [added: [15](#sEDD7974ECBC45E10999D6D7529E5EC90)] |

| | Item 1B. | [Unresolved Staff [removed: Comments](#s4B82643E63685F6DA365EC8D8A22BBE7)] [added: Comments](#s709FF45702245110A2D40E5FC0C40F71)] | [removed: [22](#s4B82643E63685F6DA365EC8D8A22BBE7)] [added: [23](#s709FF45702245110A2D40E5FC0C40F71)] |

| | Item 2. | [removed: [Properties](#s3BED494A6CD35E93A6B43AE2DE11F9BA)] [added: [Properties](#sBE4820E28D1B5D548F63B933158A8EB7)] | [removed: [22](#s3BED494A6CD35E93A6B43AE2DE11F9BA)] [added: [23](#sBE4820E28D1B5D548F63B933158A8EB7)] |

| | Item 3. | [Legal [removed: Proceedings](#sF52B519EFEB85D79888E32CAA484273F)] [added: Proceedings](#s784427CC478B53C38D11164A9F380E2C)] | [removed: [23](#sF52B519EFEB85D79888E32CAA484273F)] [added: [23](#s784427CC478B53C38D11164A9F380E2C)] |

| | Item 4. | [Mine Safety [removed: Disclosures](#sE33EA8DD12E85355AEC5D89D23A9BA98)] [added: Disclosures](#s1D74AC4BDE235A21A793FB8964FB8C51)] | [removed: [24](#sE33EA8DD12E85355AEC5D89D23A9BA98)] [added: [24](#s1D74AC4BDE235A21A793FB8964FB8C51)] |

| | Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#sD0E6751CFA435901A726A557A12F3DEC)] [added: Securities](#sF2205E7E9483543E8C5221E6E86A3AA9)] | [removed: [25](#sD0E6751CFA435901A726A557A12F3DEC)] [added: [25](#sF2205E7E9483543E8C5221E6E86A3AA9)] |

| | Item 6. | [Selected Financial [removed: Data](#s72B9F4FA7A4E5D6CB0FF536326D00280)] [added: Data](#s7D7C0CE040845C97AE71A102DC665D57)] | [removed: [27](#s72B9F4FA7A4E5D6CB0FF536326D00280)] [added: [26](#s7D7C0CE040845C97AE71A102DC665D57)] |

| | Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sDE21ED4B85AD5E489AE8D84CBC68E32B)] [added: Operations](#sE6E35B8BB4815AC9BDFA3044A70EB77E)] | [removed: [30](#sDE21ED4B85AD5E489AE8D84CBC68E32B)] [added: [29](#sE6E35B8BB4815AC9BDFA3044A70EB77E)] |

| | Item 7A. | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s12F583F3F6FD505098211454C2B674C1)] [added: Risk](#s9F3D10718BA85C7BB4328C55015E4BEE)] | [removed: [50](#s12F583F3F6FD505098211454C2B674C1)] [added: [48](#s9F3D10718BA85C7BB4328C55015E4BEE)] |

| | Item 8. | [removed: [Financial] [added: [Consolidated Financial] Statements and Supplementary [removed: Data](#s5C270CF61D9F5741AE8145114CD0C387)] [added: Data](#s1CBE34208603560688D1C579EE068E19)] | [removed: [50](#s5C270CF61D9F5741AE8145114CD0C387)] [added: [48](#s1CBE34208603560688D1C579EE068E19)] |

| | | [Consolidated Balance [removed: Sheets](#s39E7F60AC45E524AA4348085C3A12CE1)] [added: Sheets](#s2EFC1F1FE776549C8EE950BAF84343EE)] | [removed: [59](#s39E7F60AC45E524AA4348085C3A12CE1)] [added: [57](#s2EFC1F1FE776549C8EE950BAF84343EE)] |

| | | [Consolidated Statements of [removed: Operations](#s99A1B8DD05135BF3998211BE25AD53D2)] [added: Operations](#s1D742BF900C450318063C151A5F42139)] | [removed: [60](#s99A1B8DD05135BF3998211BE25AD53D2)] [added: [58](#s1D742BF900C450318063C151A5F42139)] |

| | | [Consolidated Statements of Comprehensive [removed: Income](#sD8953054BB745D8790CD0704E792A127)] [added: Income](#s197AFC3F190053E49FFBE75B069627EF)] | [removed: [61](#sD8953054BB745D8790CD0704E792A127)] [added: [59](#s197AFC3F190053E49FFBE75B069627EF)] |

| | | [Consolidated Statements of Changes in [removed: Shareholders’ Equity](#s6BAF48D07D405527920E532F4554B01A)] [added: Stockholders' Equity](#sFC38CB5A0DC457A08D1096F69464FA12)] | [removed: [62](#s6BAF48D07D405527920E532F4554B01A)] [added: [60](#sFC38CB5A0DC457A08D1096F69464FA12)] |

| | | [Consolidated Statements of Cash [removed: Flows](#sD760F7D88D1C586BAAF096B1BBDE81C9)] [added: Flows](#sD5D3CC2A35065341816B9A4CFC812A2B)] | [removed: [63](#sD760F7D88D1C586BAAF096B1BBDE81C9)] [added: [61](#sD5D3CC2A35065341816B9A4CFC812A2B)] |

| | | [Notes to Consolidated Financial [removed: Statements](#s09939ED0FEA758769B53D82CCAACD902)] [added: Statements](#s89BEDF288B9F580AA02809D213587423)] | [removed: [65](#s09939ED0FEA758769B53D82CCAACD902)] [added: [63](#s89BEDF288B9F580AA02809D213587423)] |

| | Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s6382B864FE235CD3B81234C63B51AB5D)] [added: Disclosure](#s22C84F52AE66575093A218465CE2D03D)] | [removed: [50](#s6382B864FE235CD3B81234C63B51AB5D)] [added: [48](#s22C84F52AE66575093A218465CE2D03D)] |

| | Item 9A. | [Controls and [removed: Procedures](#sDC42CCA932EE5B7B93A83966B28FAAEC)] [added: Procedures](#s1A2EC89AA6C852CCBCC94FF7680E951C)] | [removed: [50](#sDC42CCA932EE5B7B93A83966B28FAAEC)] [added: [48](#s1A2EC89AA6C852CCBCC94FF7680E951C)] |

| | Item 9B. | [Other [removed: Information](#s7C7C86E68B55585D81974886A8A43A09)] [added: Information](#s1C90FBFED8EC506A945D41DACD9DDC70)] | [removed: [51](#s7C7C86E68B55585D81974886A8A43A09)] [added: [49](#s1C90FBFED8EC506A945D41DACD9DDC70)] |

| | Item 10. | [Directors, Executive Officers and Corporate [removed: Governance](#s1901BE4565435BD19A99D89295327B28)] [added: Governance](#s3ADC0DBC7BF3583AA98FA66B81D3594A)] | [removed: [52](#s1901BE4565435BD19A99D89295327B28)] [added: [50](#s3ADC0DBC7BF3583AA98FA66B81D3594A)] |

| | Item 11. | [Executive [removed: Compensation](#s4A00D174EC53532F816EF91B75FA9C7C)] [added: Compensation](#s5B65527EEAD650E1B4161F4B9ACABD6A)] | [removed: [52](#s4A00D174EC53532F816EF91B75FA9C7C)] [added: [50](#s5B65527EEAD650E1B4161F4B9ACABD6A)] |

| | Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s3F41291570525DFB96643B363D161EDC)] [added: Matters](#s06A33C27D83E5D858C6D1AC20AFF17D8)] | [removed: [52](#s3F41291570525DFB96643B363D161EDC)] [added: [50](#s06A33C27D83E5D858C6D1AC20AFF17D8)] |

| | Item 13. | [Certain Relationships and Related Transactions and Director [removed: Independence](#sA6577A687C1E55209C86716CAEBFE7A4)] [added: Independence](#s7B9D2DCB2E7A5FA2912FCDBA37C482DE)] | [removed: [52](#sA6577A687C1E55209C86716CAEBFE7A4)] [added: [50](#s7B9D2DCB2E7A5FA2912FCDBA37C482DE)] |

| | Item 14. | [Principal Accounting Fees and [removed: Services](#sE5FA1088F7B4565FAA0E041BDDAD3990)] [added: Services](#s8CBB2261843F5D1C9A43DC4D0DE96407)] | [removed: [52](#sE5FA1088F7B4565FAA0E041BDDAD3990)] [added: [50](#s8CBB2261843F5D1C9A43DC4D0DE96407)] |

| | Item 15. | [Exhibits and Financial Statement [removed: Schedules](#sB4B11D4F1864548D81A852353569A0E1)] [added: Schedule](#s8204F96A9F9E50A1816B1C3BEB16EEF2)] | [removed: [53](#sB4B11D4F1864548D81A852353569A0E1)] [added: [51](#s8204F96A9F9E50A1816B1C3BEB16EEF2)] |

| | Item 16. | [Form 10-K [removed: Summary](#s6199E45F4D4B52D1B1B17F4C35D8CCDF)] [added: Summary](#sB224B7A0A60650AE972982719C0D59CC)] | [removed: [53](#s6199E45F4D4B52D1B1B17F4C35D8CCDF)] [added: [51](#sB224B7A0A60650AE972982719C0D59CC)] |

10-K 1 vrsk10k12312018.htm 10-K

| | | [SIGNATURES](#s86191FA16E195011AC46A93A574B3F26) | [105](#s86191FA16E195011AC46A93A574B3F26) |

| | | [EXHIBIT INDEX](#s9B427A1F8E9556D6983E208147B05103) | [106](#s9B427A1F8E9556D6983E208147B05103) |

10-K 1 vrsk10k12312017.htm 10-K

| | | [SIGNATURES](#s7626DE8301BA5802920AE3C908A2211A) | [107](#s7626DE8301BA5802920AE3C908A2211A) |

| | | [EXHIBIT INDEX](#sB5A11A8AE6645233B625E2D9981A9201) | [108](#sB5A11A8AE6645233B625E2D9981A9201) |

| | | Exhibit 21.1 | |

As of December 31, [removed: 2017,] [added: 2018,] our principal offices consisted of the following properties:

We also lease offices in 24 states in the U.S., and offices outside the U.S. to support our international operations in Argentina, Australia, [removed: Austria,] Bahrain, Brazil, Canada, China, Denmark, Germany, India, Indonesia, Ireland, Israel, Japan, Kazakhstan, Malaysia, Mexico, Nepal, New Zealand, Nigeria, [removed: Peru,] Russia, Singapore, South Africa, South Korea, Spain, Thailand, the United Arab Emirates, and the U.K.

As of February [removed: 16, 2018,] [added: 15, 2019,] there were approximately [removed: 41] [added: 47] stockholders of record.

We have not paid or declared any cash dividends on our common stock during the two most recent fiscal [removed: years and we currently do not intend to pay dividends on our common stock.][added: years.]

We have a publicly announced share repurchase plan and repurchased a total of [removed: 53,992,688] [added: 57,875,155] shares since our IPO through December 31, [removed: 2017.][added: 2018.]

The graph below compares the cumulative total stockholder return on $100 invested in our common stock, with the cumulative total return (assuming reinvestment of dividends) on $100 invested in the S&P 500 Index and an aggregate of peer issuers in the information [added: services industry used in last year's statement, and a new group of aggregate of peer issuers in the information services] industry.

The [added: prior] peer issuers used for this graph are Equifax Inc., Factset Research Systems Inc., IHS Markit, MSCI Inc., Moody’s Corporation, S&P Global, and Nielsen Holdings plc.

Assumes $100 Invested on December 31, [removed: 2012][added: 2013]

Fiscal Year Ended December 31, [removed: 2017][added: 2018]

[removed: ][added: ]

There were no unregistered sales of equity securities by the Company during [removed: 2017.][added: 2018.]

Our board of directors has authorized a share repurchase program, or Repurchase Program, since May 2010, of up to [removed: $2.8] [added: $3.3] billion.

As of December 31, [removed: 2017, $366.2] [added: 2018, $427.6] million remains available for share repurchases.

[removed: We had no] [added: Our] share repurchases for the quarter ended December 31, [removed: 2017.][added: 2018 are set forth below:]

As of December 31, 2018, we had 380,032,628 shares of treasury stock.

We have aligned our peer issuers for this performance graph with those used in our proxy statement.

In this transition year, the table and the graph below include both the prior and the new indices of peer companies.

The new peer issuers used for this graph are Alliance Data Systems Corporation, Equifax Inc., Factset Research Systems Inc., Fidelity National Information Services, Inc., Fiserv, Inc., Gartner, Inc., IHS Markit, Moody’s Corporation, MSCI Inc., Nielsen Holdings plc, S&P Global, and TransUnion.

In June and September 2018, we entered into two Accelerated Share Repurchase, or ASR, agreements to repurchase shares of its common stock for an aggregate purchase price of $100.0 million.

These ASRs were settled in September and December 2018.

In December 2018, we entered into an additional ASR agreement to repurchase shares of its common stock for an aggregate purchase price of $75.0 million.

This ASR will be settled in March 2019.

Since the introduction of share repurchase as a feature of our capital management strategies in 2010, we have repurchased shares with an aggregated value of $2,872.4 million.

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | |

| Period | | Total Number of Shares Purchased | | | | Average Price Paid per Share | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | |

| | | | | | | | | | | | | (in millions) | |

| October 1, 2018 through October 31, 2018 | | 331,812 | | | $ | 120.55 | | | 331,812 | | $ | 544.0 | |

| November 1, 2018 through November 30, 2018 | | 605,500 | | | $ | 121.93 | | | 605,500 | | $ | 470.2 | |

| December 1, 2018 through December 31, 2018 | | 371,032 | | | $ | 114.76 | | | 371,032 | | $ | 427.6 | |

| | | 1,308,344 | | | | | | | 1,308,344 | | | | |

Our common stock was first publicly traded on October 7, 2009.

As of February 16, 2018, the closing price of our common stock was $98.79 per share, as reported by the NASDAQ Global Select Market.

As of December 31, 2017, we had 379,124,108 shares of treasury stock.

The following table shows the quarterly range of the closing high and low per share trading prices for our common stock as reported by the NASDAQ Global Select Market for the years ending December 31:

| | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | 2017 | | | | | | | | 2016 | | | | | | |

| | | High | | | | Low | | | | High | | | | Low | | |

| Fourth Quarter | | $ | 96.45 | | | $ | 83.33 | | | $ | 84.15 | | | $ | 79.36 | |

| Third Quarter | | $ | 87.32 | | | $ | 79.23 | | | $ | 85.75 | | | $ | 79.43 | |

| Second Quarter | | $ | 84.37 | | | $ | 76.75 | | | $ | 81.08 | | | $ | 76.00 | |

| First Quarter | | $ | 85.19 | | | $ | 79.35 | | | $ | 79.92 | | | $ | 65.95 | |

Each peer issuer was weighted according to its respective market capitalization on December 31, 2012.

The consolidated statement of operations data for the years ended December 31, [added: 2018,] 2017, [removed: 2016,] and [removed: 2015] [added: 2016] and the consolidated balance sheet data as of December 31, [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017] are derived from the audited consolidated financial statements included elsewhere in this annual report on Form 10-K.

The consolidated statement of operations data for the years ended December 31, [removed: 2014] [added: 2015] and [removed: 2013] [added: 2014] and the consolidated balance sheet data as of December 31, [added: 2016,] 2015, [removed: 2014,] and [removed: 2013] [added: 2014] are derived from consolidated financial statements that are not included in this annual report on Form 10-K.

Results for the year ended December 31, [removed: 2017] [added: 2018] are not necessarily indicative of results that may be expected in any other future period.

Between January 1, [removed: 2013] [added: 2014] and December 31, [removed: 2017,] [added: 2018,] we acquired [removed: 22] [added: 26] businesses (most notably Wood Mackenzie on May 19, 2015), which may affect the comparability of our consolidated financial statements.

| | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | |

| Revenues | | [removed: 2,145.2] [added: 2,395.1] | | | | [removed: 1,995.2] [added: 2,145.2] | | | | [removed: 1,760.7] [added: 1,995.2] | | | | [removed: 1,431.1] [added: 1,760.7] | | | | [removed: 1,324.2] [added: 1,431.1] | |

| [removed: Expenses:] [added: Operating expenses:] | | | | | | | | | | | | | | | | | | | |

| Cost of revenues (exclusive of items shown separately below) | | [removed: 783.8] [added: 886.2] | | | | [removed: 714.4] [added: 783.8] | | | | [removed: 612.0] [added: 714.4] | | | | [removed: 516.0] [added: 612.0] | | | | [removed: 472.5] [added: 516.0] | |

| Selling, general and administrative | | [removed: 322.8] [added: 378.7] | | | | [removed: 301.6] [added: 322.8] | | | | [removed: 278.3] [added: 301.6] | | | | [removed: 187.3] [added: 278.3] | | | | [removed: 186.8] [added: 187.3] | |

| Depreciation and amortization of fixed assets | | [removed: 135.6] [added: 165.3] | | | | [removed: 119.1] [added: 135.6] | | | | [removed: 96.6] [added: 119.1] | | | | [removed: 65.4] [added: 96.6] | | | | [removed: 49.2] [added: 65.4] | |

| Amortization of intangible assets | | [removed: 101.8] [added: 130.8] | | | | [removed: 92.5] [added: 101.8] | | | | [removed: 70.4] [added: 92.5] | | | | [removed: 30.1] [added: 70.4] | | | | [removed: 36.2] [added: 30.1] | |

| Total [added: operating] expenses | | [removed: 1,344.0] [added: 1,561.0] | | | | [removed: 1,227.6] [added: 1,344.0] | | | | [removed: 1,057.3] [added: 1,227.6] | | | | [removed: 798.8] [added: 1,057.3] | | | | [removed: 744.7] [added: 798.8] | |

| Operating income | | [removed: 801.2] [added: 834.1] | | | | [removed: 767.6] [added: 801.2] | | | | [removed: 703.4] [added: 767.6] | | | | [removed: 632.3] [added: 703.4] | | | | [removed: 579.5] [added: 632.3] | |

| Investment income and others, net | | [removed: 9.2] [added: 15.3] | | | | [removed: 6.1] [added: 9.2] | | | | [removed: 16.9] [added: 6.1] | | | | [removed: 0.2] [added: 16.9] | | | | [removed: 0.3] [added: 0.2] | |

| Gain on derivative instruments | | — | | | | — | | | | [removed: 85.2] [added: —] | | | | [removed: —] [added: 85.2] | | | | — | |

| Interest expense | | [removed: (119.4] [added: (129.7] | ) | | | [removed: (120.0] [added: (119.4] | ) | | | [removed: (121.4] [added: (120.0] | ) | | | [removed: (70.0] [added: (121.4] | ) | | | [removed: (76.1] [added: (70.0] | ) |

| Total other expense, net | | [removed: (110.2] [added: (114.4] | ) | | | [removed: (113.9] [added: (110.2] | ) | | | [removed: (19.3] [added: (113.9] | ) | | | [removed: (69.8] [added: (19.3] | ) | | | [removed: (75.8] [added: (69.8] | ) |

| Income before income taxes from continuing operations | | [removed: 691.0] [added: 719.7] | | | | [removed: 653.7] [added: 691.0] | | | | [removed: 684.1] [added: 653.7] | | | | [removed: 562.5] [added: 684.1] | | | | [removed: 503.7] [added: 562.5] | |

| Provision for income taxes | | [removed: (135.9] [added: (121.0] | ) | | | [removed: (202.2] [added: (135.9] | ) | | | [removed: (196.6] [added: (202.2] | ) | | | [removed: (208.5] [added: (196.6] | ) | | | [removed: (184.8] [added: (208.5] | ) |

| Income from continuing operations | | [removed: 555.1] [added: 598.7] | | | | [removed: 451.5] [added: 555.1] | | | | [removed: 487.5] [added: 451.5] | | | | [removed: 354.0] [added: 487.5] | | | | [removed: 318.9] [added: 354.0] | |

| Income from discontinued operations, net of tax (1) | | — | | | | [removed: 139.7] [added: —] | | | | [removed: 20.1] [added: 139.7] | | | | [removed: 46.0] [added: 20.1] | | | | [removed: 29.5] [added: 46.0] | |

| Net income | $ | [removed: 555.1] [added: 598.7] | | | $ | [removed: 591.2] [added: 555.1] | | | $ | [removed: 507.6] [added: 591.2] | | | $ | [removed: 400.0] [added: 507.6] | | | $ | [removed: 348.4] [added: 400.0] | |

| Income from continuing operations | $ | [removed: 3.36] [added: 3.63] | | | $ | [removed: 2.68] [added: 3.36] | | | $ | [removed: 2.95] [added: 2.68] | | | $ | [removed: 2.14] [added: 2.95] | | | $ | [removed: 1.90] [added: 2.14] | |

| Income from discontinued operations | | — | | | | [removed: 0.83] [added: —] | | | | [removed: 0.12] [added: 0.83] | | | | [removed: 0.27] [added: 0.12] | | | | [removed: 0.17] [added: 0.27] | |

| Basic net income per share | $ | [removed: 3.36] [added: 3.63] | | | $ | [removed: 3.51] [added: 3.36] | | | $ | [removed: 3.07] [added: 3.51] | | | $ | [removed: 2.41] [added: 3.07] | | | $ | [removed: 2.07] [added: 2.41] | |

| Income from continuing operations | $ | [removed: 3.29] [added: 3.56] | | | $ | [removed: 2.64] [added: 3.29] | | | $ | [removed: 2.89] [added: 2.64] | | | $ | [removed: 2.10] [added: 2.89] | | | $ | [removed: 1.85] [added: 2.10] | |

| Income from discontinued operations | | — | | | | [removed: 0.81] [added: —] | | | | [removed: 0.12] [added: 0.81] | | | | [removed: 0.27] [added: 0.12] | | | | [removed: 0.17] [added: 0.27] | |

| Diluted net income per share | $ | [removed: 3.29] [added: 3.56] | | | $ | [removed: 3.45] [added: 3.29] | | | $ | [removed: 3.01] [added: 3.45] | | | $ | [removed: 2.37] [added: 3.01] | | | $ | [removed: 2.02] [added: 2.37] | |

| Basic | | [removed: 165,168,224] [added: 164,808,110] | | | | [removed: 168,248,304] [added: 165,168,224] | | | | [removed: 165,090,380] [added: 168,248,304] | | | | [removed: 165,823,803] [added: 165,090,380] | | | | [removed: 168,031,412] [added: 165,823,803] | |

| Diluted | | [removed: 168,688,868] [added: 168,297,836] | | | | [removed: 171,171,572] [added: 168,688,868] | | | | [removed: 168,451,343] [added: 171,171,572] | | | | [removed: 169,132,423] [added: 168,451,343] | | | | [removed: 172,276,360] [added: 169,132,423] | |

| EBITDA | $ | [removed: 1,047.8] [added: 1,145.5] | | | $ | [removed: 1,251.3] [added: 1,047.8] | | | $ | [removed: 1,054.2] [added: 1,251.3] | | | $ | [removed: 858.6] [added: 1,054.2] | | | $ | [removed: 760.3] [added: 858.6] | |

| Depreciation and amortization of fixed and intangible assets from continuing operations | | [removed: 237.4] [added: 296.1] | | | | [removed: 211.6] [added: 237.4] | | | | [removed: 167.0] [added: 211.6] | | | | [removed: 95.5] [added: 167.0] | | | | [removed: 85.4] [added: 95.5] | |

| Interest expense from continuing operations | | [removed: 119.4] [added: 129.7] | | | | [removed: 120.0] [added: 119.4] | | | | [removed: 121.4] [added: 120.0] | | | | [removed: 70.0] [added: 121.4] | | | | [removed: 76.1] [added: 70.0] | |

| Provision for income taxes from continuing operations | | [removed: 135.9] [added: 121.0] | | | | [removed: 202.2] [added: 135.9] | | | | [removed: 196.6] [added: 202.2] | | | | [removed: 208.5] [added: 196.6] | | | | [removed: 184.8] [added: 208.5] | |

| Depreciation, amortization, interest and provision for income taxes from discontinued operations | | — | | | | [removed: 126.3] [added: —] | | | | [removed: 61.6] [added: 126.3] | | | | [removed: 84.6] [added: 61.6] | | | | [removed: 65.6] [added: 84.6] | |

| Cash and cash equivalents | $ | [removed: 142.3] [added: 139.5] | | | $ | [removed: 135.1] [added: 142.3] | | | $ | [removed: 138.3] [added: 135.1] | | | $ | [removed: 39.3] [added: 138.3] | | | $ | [removed: 165.8] [added: 39.3] | |

| Total assets | $ | [removed: 6,020.3] [added: 5,900.3] | | | $ | [removed: 4,631.2] [added: 6,020.3] | | | $ | [removed: 5,593.7] [added: 4,631.2] | | | $ | [removed: 2,335.1] [added: 5,593.7] | | | $ | [removed: 2,492.8] [added: 2,335.1] | |

| Total debt (3) | $ | [removed: 3,008.8] [added: 2,723.3] | | | $ | [removed: 2,387.0] [added: 3,008.8] | | | $ | [removed: 3,145.7] [added: 2,387.0] | | | $ | [removed: 1,426.7] [added: 3,145.7] | | | $ | [removed: 1,264.2] [added: 1,426.7] | |

| Stockholders’ equity | $ | [removed: 1,925.4] [added: 2,070.6] | | | $ | [removed: 1,332.4] [added: 1,925.4] | | | $ | [removed: 1,372.0] [added: 1,332.4] | | | $ | [removed: 211.0] [added: 1,372.0] | | | $ | [removed: 547.6] [added: 211.0] | |

| (1) | On June 1, 2016 and March 11, 2014, we sold our healthcare business and mortgage services business, respectively. Results of operations for the healthcare and mortgage services businesses are reported as discontinued operations for the year ended December 31, 2016 and for all prior periods presented. As necessary, the amounts have been retroactively adjusted in all periods presented to give recognition to the discontinued operations. See Note [removed: 9] [added: 11] of our consolidated financial statements included in this annual report on Form 10-K. |

| Insurance | $ | 1,705.9 | | | $ | 1,550.5 | | | $ | 1,419.1 | | | $ | 1,330.6 | | | $ | 1,245.0 | |

| Energy and Specialized Markets | | 513.3 | | | | 444.7 | | | | 442.8 | | | | 308.8 | | | | 84.9 | |

| Financial Services | | 175.9 | | | | 150.0 | | | | 133.3 | | | | 121.3 | | | | 101.2 | |

| | 2018 | | | | 2017 | | | | 2016 | | | | 2015 | | | | 2014 | | |

| Insurance | $ | 932.2 | | | $ | 855.8 | | | $ | 779.2 | | | $ | 762.5 | | | $ | 672.3 | |

| Energy and Specialized Markets | | 154.4 | | | | 133.6 | | | | 151.2 | | | | 162.3 | | | | 17.9 | |

| Financial Services | | 58.9 | | | | 58.4 | | | | 320.9 | | | | 129.4 | | | | 168.4 | |

| Net income | $ | 598.7 | | | $ | 555.1 | | | $ | 591.2 | | | $ | 507.6 | | | $ | 400.0 | |

| EBITDA | $ | 1,145.5 | | | $ | 1,047.8 | | | $ | 1,251.3 | | | $ | 1,054.2 | | | $ | 858.6 | |

| | 2018 | | | | 2017 | | | | 2016 | | | | 2015 | | | | 2014 | | |

reported under GAAP.

| (3) | Includes capital lease obligations and unamortized discount and debt issuance costs. |

| Decision Analytics | $ | 1,374.9 | | | $ | 1,270.9 | | | $ | 1,072.5 | | | $ | 780.5 | | | $ | 705.9 | |

| Risk Assessment | | 770.3 | | | | 724.3 | | | | 688.2 | | | | 650.6 | | | | 618.3 | |

| Decision Analytics EBITDA | $ | 589.1 | | | $ | 835.8 | | | $ | 647.7 | | | $ | 489.8 | | | $ | 413.4 | |

| Risk Assessment EBITDA | | 458.7 | | | | 415.5 | | | | 406.5 | | | | 368.8 | | | | 346.9 | |

| (3) | Includes capital lease obligations. |

Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this annual report on Form 10-K for the Company and our subsidiaries other than our recent acquisitions in [removed: 2017] [added: 2018] (See Note [removed: 8] [added: 10] of our consolidated financial statements included in this annual report on Form 10-K).

Management excluded from its assessment the internal control over financial reporting of these acquisitions and collectively represents approximately [removed: 2.0%] [added: 0.4%] of total assets (excluding goodwill and intangible assets which were integrated into the Company's systems and control environment) and [removed: 1.9%] [added: 0.5%] of revenues as of and for the year ended December 31, [removed: 2017.][added: 2018.]

Based upon the foregoing assessments, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, [removed: 2017,] [added: 2018,] our disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Report on Internal Control [removed: Over] [added: over] Financial Reporting as of December 31, [removed: 2017] [added: 2018] is set forth in Item 8.

[added: Consolidated] Financial Statement and Supplementary Data.

The Report of Independent Registered Public Accounting Firm on Internal Control [removed: Over] [added: over] Financial Reporting as of December 31, [removed: 2017] [added: 2018] is set forth in Item 8.

We are in the process of integrating our recent acquisitions in [removed: 2017] [added: 2018] into our overall internal control over financial reporting process.

Other than this ongoing integration, there have been no changes in our internal control over financial reporting identified in connection with the evaluation of such internal control that occurred during the fourth quarter of [removed: 2017] [added: 2018] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Consolidated Financial Statement and Supplementary Data.

is incorporated herein by reference to our Notice of Annual Meeting of Stockholders and Proxy Statement to be filed within 120 days of December 31, [removed: 2017] [added: 2018] (the “Proxy Statement”).

| Verisk Analytics, Inc. Consolidated Financial Statements as of December 31, [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017] and for the Years Ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015.] [added: 2016.] | |

[removed: | [Management’s Report on Internal Controls Over Financial Reporting](#sFAF0219AC70C583985AB9589F98D7DCD) | [55](#sFAF0219AC70C583985AB9589F98D7DCD) |][added: MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING]

| [Report of Independent Registered Public Accounting Firm on Internal [removed: Controls Over] [added: Control over] Financial [removed: Reporting](#s0873A3DF8C615C0D97465DCFD23FDCBD)] [added: Reporting](#s84D69CDCEFDB59F5A417868F25316F63)] | [removed: [56](#s0873A3DF8C615C0D97465DCFD23FDCBD)] [added: [54](#s84D69CDCEFDB59F5A417868F25316F63)] |

| [Report of Independent Registered Public Accounting [removed: Firm](#sEDA9ADC6CD46574BA491C5ED9BEF785E)] [added: Firm](#sD975DF9132315255BF2855A396AA93F3)] | [removed: [58](#sEDA9ADC6CD46574BA491C5ED9BEF785E)] [added: [56](#sD975DF9132315255BF2855A396AA93F3)] |

| [Consolidated Balance [removed: Sheets](#s39E7F60AC45E524AA4348085C3A12CE1)] [added: Sheets](#s2EFC1F1FE776549C8EE950BAF84343EE)] | [removed: [59](#s39E7F60AC45E524AA4348085C3A12CE1)] [added: [57](#s2EFC1F1FE776549C8EE950BAF84343EE)] |

| [Consolidated Statements of [removed: Operations](#s99A1B8DD05135BF3998211BE25AD53D2)] [added: Operations](#s1D742BF900C450318063C151A5F42139)] | [removed: [60](#s99A1B8DD05135BF3998211BE25AD53D2)] [added: [58](#s1D742BF900C450318063C151A5F42139)] |

| [Consolidated Statements of Comprehensive [removed: Income](#sD8953054BB745D8790CD0704E792A127)] [added: Income](#s197AFC3F190053E49FFBE75B069627EF)] | [removed: [61](#sD8953054BB745D8790CD0704E792A127)] [added: [59](#s197AFC3F190053E49FFBE75B069627EF)] |

| [Consolidated Statements of Changes in [removed: Stockholders’ Equity](#s6BAF48D07D405527920E532F4554B01A)] [added: Stockholders' Equity](#sFC38CB5A0DC457A08D1096F69464FA12)] | [removed: [62](#s6BAF48D07D405527920E532F4554B01A)] [added: [60](#sFC38CB5A0DC457A08D1096F69464FA12)] |

| [Consolidated Statements of Cash [removed: Flows](#sD760F7D88D1C586BAAF096B1BBDE81C9)] [added: Flows](#sD5D3CC2A35065341816B9A4CFC812A2B)] | [removed: [63](#sD760F7D88D1C586BAAF096B1BBDE81C9)] [added: [61](#sD5D3CC2A35065341816B9A4CFC812A2B)] |

| [Notes to Consolidated Financial [removed: Statements](#s09939ED0FEA758769B53D82CCAACD902)] [added: Statements](#s89BEDF288B9F580AA02809D213587423)] | [removed: [65](#s09939ED0FEA758769B53D82CCAACD902)] [added: [63](#s89BEDF288B9F580AA02809D213587423)] |

| [Schedule II, Valuation and Qualifying Accounts and [removed: Reserves](#sC37B7DAF423B5BBE9ACD7AAB94420B98)] [added: Reserves](#s8628586B279D5157A09E2B1BD37405CB)] | [removed: [106](#sC37B7DAF423B5BBE9ACD7AAB94420B98)] [added: [104](#s8628586B279D5157A09E2B1BD37405CB)] |

[removed: MANAGEMENT’S REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING][added: | [Management’s Report on Internal Control over Financial Reporting](#s076BE995EE155B04AADB1CEFF139AEAF) | [53](#s076BE995EE155B04AADB1CEFF139AEAF) |]

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that internal [removed: controls] [added: control] may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Based on this assessment, management concluded that our internal control over financial reporting was effective at December 31, [removed: 2017.][added: 2018.]

Management excluded from its assessment the internal control over financial reporting for our acquisitions in [removed: 2017] [added: 2018] (See Note [removed: 8 of our consolidated financial statements included in this annual report on Form 10-K).][added: 10.]

The excluded financial statements of these acquisitions constitute approximately [removed: 2.0%] [added: 0.4%] of total assets (excluding goodwill and intangible assets which were integrated into the Company's systems and control environment) and [removed: 1.9%] [added: 0.5%] of revenues collectively included within our consolidated financial statements as of and for the year ended December 31, [removed: 2017.][added: 2018.]

Deloitte & Touche LLP, the independent registered public accounting firm that audited the consolidated financial statements included in this annual report on Form 10-K has also audited the effectiveness of our internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] as stated in their report which is included herein.

We have audited the internal control over financial reporting of Verisk Analytics, Inc. and subsidiaries (the "Company") as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway [removed: Commission.][added: Commission ("COSO").]

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, [removed: 2017,] [added: 2018,] of the Company and our report dated February [removed: 20, 2018,] [added: 19, 2019,] expressed an unqualified opinion on those financial statements.

The financial statements of the [removed: 2017] [added: 2018] acquired businesses constitute [removed: 2.0%] [added: 0.4%] of total assets (excluding goodwill and intangible assets which were integrated into the Company's systems and control environment) and [removed: 1.9%] [added: 0.5%] of revenues collectively of the consolidated financial statement amounts as of and for the year ended December 31, [removed: 2017.][added: 2018.]

Accordingly, our audit did not include the internal control over financial reporting at the [removed: 2017] [added: 2018] acquired businesses.

We have audited the accompanying consolidated balance sheets of Verisk Analytics, Inc. and subsidiaries (the "Company") as of December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] the related consolidated statements of operations, comprehensive income, [added: changes in] stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, [removed: 2017,] [added: 2018,] and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2017,] [added: 2018,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February [removed: 20, 2018,] [added: 19, 2019,] expressed an unqualified opinion on the Company's internal control over financial reporting.

As of December 31, [removed: 2017] [added: 2018] and [removed: 2016][added: 2017]

| | [added: 2018 | | | |] 2017 | | | | 2016 | | |

| Cash and cash equivalents | $ | [removed: 142.3] [added: 139.5] | | | $ | [removed: 135.1] [added: 142.3] | |

| [removed: Available-for-sale] [added: Purchases of available-for-sale] securities | | [removed: 3.8] [added: (0.1] | [added: )] | | | [removed: 3.4] [added: (0.3] | [added: )] | [added: | | (0.3 | ) |]

| Accounts receivable, net | | [removed: 345.5] [added: 356.4] | | | | [removed: 263.9] [added: 345.5] | |

| Prepaid expenses | | [removed: 38.1] [added: 63.9] | | | | [removed: 28.9] [added: 38.1] | |

| Income taxes receivable | | [removed: 28.8] [added: 34.0] | | | | [removed: 49.3] [added: 28.8] | |

| Other current assets | | [removed: 39.1] [added: 50.7] | | | | [removed: 20.3] [added: 42.9] | |

| Total current assets | | [removed: 597.6] [added: 644.5] | | | | [removed: 500.9] [added: 597.6] | |

| Fixed assets, net | | [removed: 478.3] [added: 555.9] | | | | [removed: 380.3] [added: 478.3] | |

| Intangible assets, net | | [removed: 1,345.3] [added: 1,227.8] | | | | [removed: 1,010.8] [added: 1,345.3] | |

| Goodwill | | [removed: 3,368.7] [added: 3,361.5] | | | | [removed: 2,578.1] [added: 3,368.7] | |

| Deferred income tax assets | | [removed: 15.9] [added: 11.1] | | | | [removed: 15.6] [added: 15.9] | |

| Other assets | | [removed: 214.5] [added: 99.5] | | | | [removed: 145.5] [added: 214.5] | |

| Total assets | $ | [removed: 6,020.3] [added: 5,900.3] | | | $ | [removed: 4,631.2] [added: 6,020.3] | |

of our consolidated financial statements included in this annual report on Form 10-K).

As described in Management’s Report on Internal Controls over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Marketview Limited, which was acquired on January 5, 2018, Business Insight Limited, which was acquired on February 21, 2018, Validus-IVC Limited, which was acquired on June 20, 2018, and Rulebook, which was acquired on December 14, 2018 (collectively the “2018 acquired businesses”).

February 19, 2019

February 19, 2019

| | 2018 | | | | 2017 | | |

For The Years Ended December 31, 2018, 2017 and 2016

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Adjustments to opening retained earnings related to Topic 606 and ASU 2016-01 | — | | | | — | | | | — | | | | — | | | | 35.9 | | | | (0.7 | ) | | | 35.2 | |

| Net income | — | | | | — | | | | — | | | | — | | | | 598.7 | | | | — | | | | 598.7 | |

| Treasury stock acquired (3,882,467 shares) | — | | | | — | | | | — | | | | (438.6 | ) | | | — | | | | — | | | | (438.6 | ) |

| Stock options exercised (2,752,735 shares reissued from treasury stock) | — | | | | — | | | | 66.8 | | | | 24.0 | | | | — | | | | — | | | | 90.8 | |

| Balance, December 31, 2018 | 544,003,038 | | | $ | 0.1 | | | $ | 2,283.0 | | | $ | (3,563.2 | ) | | $ | 3,942.6 | | | $ | (591.9 | ) | | $ | 2,070.6 | |

For The Years Ended December 31, 2018, 2017 and 2016

| Net income | $ | 598.7 | | | $ | 555.1 | | | $ | 591.2 | |

| Realized gain on settlement of subordinated promissory note | | (12.3 | ) | | | — | | | | — | |

| Proceeds from subordinated promissory note | | 121.4 | | | | — | | | | — | |

For The Years Ended December 31, 2018, 2017 and 2016

An aggregate adjustment of $35.2 million was made to the opening retained earnings in relation to the adoption of these standards (See Notes 6, 7 and 16).

In addition, effective the first quarter of 2018, the operating segments of the Company are Insurance, Energy and Specialized Markets, and Financial Services.

Previously, its operating segments were Decision Analytics and Risk Assessment.

(See Note 19).

The Company recognizes revenues through agreements (generally one to five years) for hosted subscriptions, advisory/consulting services, and for transactional solutions.

Each of our reportable segments, Insurance, Energy and Specialized Markets, and Financial Services has a portion of its revenue from more than one of these revenue types.

The Company’s revenues are primarily derived from the sales of services and revenue is recognized when control of the promised services is transferred to the customers, in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those services.

Fees for services provided by the Company are nonrefundable.

Hosted Subscriptions

The Company offers two forms of hosted subscriptions.

The first and most prevalent form of hosted subscription is where customers access content only through the online portal (the "Hosted Subscription").

The Company grants a license to the customer to enter the online portal.

The license is a contractual mechanism that allows the customer to access the online portal for a defined period of time.

As the license alone does not provide utility to the customer, the customer has no contractual right to take possession of the online portal at any time, and the customer cannot engage another party to host the online portal and related content, it is not considered a functional license under Topic 606.

The Company's promise to the customer is to provide continuous access to the online portal and to update the content throughout the subscription period.

Hosted Subscription is a single performance obligation that represents a series of distinct services (daily access to the online portal and related content) that are substantially the same and that have the same pattern of transfer to the customer.

The second form of hosted subscription is where customers have access to the Company's online portals combined with software content that is delivered via disk drive/download to the customer (“Hosted Subscription with Disk Drive/Download”) and is offered only on a limited basis.

For this form of hosted subscription, the Company also grants the customer a license to enter the online portal and access the software content as needed and acts as the same contractual mechanism as described for Hosted Subscriptions.

The Hosted Subscription with Disk Drive/Download works in such a manner that the customer gains significant benefit, functionality and overall utility only when the online portal and the software content are used together.

The disk drive/download contains the models and the online portal contains the most up to date data and research which is updated throughout the subscription period.

| | |

| --- | --- |

As described in Management’s Report on Internal Controls over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Arium Limited, which was acquired on January 21, 2017, Healix International Holdings Limited, which was acquired on February 16, 2017, Emergent Network Intelligence Limited, which was acquired on February 24, 2017, Fintellix Solutions Private Limited, which was acquired on March 31, 2017, MAKE Consulting A/S, which was acquired on May 19, 2017, Aerial Imagery group of companies, which were acquired during the three months ended June 30, 2017, G2 Web Services LLC, which was acquired on August 3, 2017, Sequel Business Solutions Ltd., which was acquired on August 23, 2017, Lundquist Consulting, Inc., which was acquired on August 31, 2017, Rebmark Legal Solutions Ltd., which was acquired on November 9, 2017, Service Software, LLC., which was acquired on December 22, 2017 and PowerAdvocate, Inc., which was acquired on December 29, 2017 (collectively the “2017 acquired businesses”).

February 20, 2018

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| Gain on derivative instruments | | — | | | | — | | | | 85.2 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance, January 1, 2015 | 544,003,038 | | | $ | 0.1 | | | $ | (0.2 | ) | | $ | 1,171.2 | | | $ | (2,533.7 | ) | | $ | 1,654.1 | | | $ | (80.5 | ) | | $ | 211.0 | |

| Treasury stock acquired (1,088,474 shares) | — | | | | — | | | | — | | | | 100.0 | | | | (120.5 | ) | | | — | | | | — | | | | (20.5 | ) |

| Shares issued from equity offering (10,604,000 reissued from treasury stock) | — | | | | — | | | | — | | | | 651.3 | | | | 69.6 | | | | — | | | | — | | | | 720.9 | |

| KSOP shares earned (181,198 shares reissued from treasury stock) | — | | | | — | | | | — | | | | 13.2 | | | | 1.3 | | | | — | | | | — | | | | 14.5 | |

| Stock options exercised, including tax benefit of $22.1 (1,409,803 shares reissued from treasury stock) | — | | | | — | | | | — | | | | 56.2 | | | | 10.2 | | | | — | | | | — | | | | 66.4 | |

| Gain on derivative instruments | | — | | | | — | | | | (85.2 | ) |

| Gain on exercise of common stock warrants | | — | | | | — | | | | (15.6 | ) |

| Loss on extinguishment of convertible note | | — | | | | — | | | | 0.5 | |

| Proceeds from extinguishment of convertible note | | — | | | | — | | | | 0.4 | |

| Proceeds from the settlement of derivative instruments | | — | | | | — | | | | 85.2 | |

| Purchases of available-for-sale securities | | (0.3 | ) | | | (0.3 | ) | | | (0.2 | ) |

| Cash received from the exercise of common stock warrants | | — | | | | — | | | | 15.6 | |

| Proceeds from issuance of long-term debt, net of original issue discount | | — | | | | — | | | | 1,244.0 | |

| Repayment of short-term debt with original maturities greater than three months | | — | | | | — | | | | (15.0 | ) |

| Proceeds from issuance of stock as part of a public offering | | — | | | | — | | | | 720.8 | |

As of March 31, 2016, the Company's healthcare business qualified as assets held-for-sale.

As of December 31, 2017, the Company simplified the presentation of its consolidated financial statements.

Amounts, except for share and per share data, are presented in millions.

The Company’s revenues are primarily derived from the sales of services and revenue is recognized as services are performed and information is delivered to customers.

Industry-Standard Insurance Programs

Industry-standard insurance programs, statistical agent and data services and actuarial services are sold to participating insurance company customers under annual agreements covering a calendar year where the price is determined at the inception of the agreement.

Property-Specific Rating and Underwriting Information

The Company provides property-specific rating information through reports issued for specific commercial properties, for which revenue is recognized when the report is delivered to the customer, provided that all other revenue recognition criteria are met.

In addition, the Company provides hosting or software solutions that provide continuous access to information about the properties being insured and underwriting information in the form of standard policy forms to be used by customers.

As the customer has a contractual right to take possession of the software without significant penalty, revenues from these arrangements are recognized ratably over the contract period from the time when the customer had access to the solution in accordance with ASC 985-605, Software Revenue Recognition (“ASC 985-605”).

The Company recognizes software license revenue when the arrangement does not require significant production, customization or modification of the software and the following criteria are met: persuasive evidence of an agreement exists, delivery has occurred, fees are fixed or determinable, and collections are probable.

These software arrangements include post-contract customer support (“PCS”).

The Company recognizes software license revenue ratably over the duration of the annual license term as vendor specific objective evidence (“VSOE”) of PCS, the only remaining undelivered element, cannot be established in accordance with ASC 985-605.

The PCS associated with these arrangements is coterminous with the duration of the license term.

Insurance services primarily consist of term-based software licenses.

These software arrangements include PCS, which includes unspecified upgrades on a when-and-if available basis.