Item 1. Business

| --- | --- |

Our Company

Verisk is a leading data, analytics, and technology provider serving clients in the insurance ecosystem. We completed the sale of our Energy business on February 1, 2023. We also divested our specialized markets and financial services businesses in March 2022 and April 2022, respectively.

Using advanced technologies to collect and analyze billions of records, we draw on unique data assets, insurance industry knowledge, and technological expertise to provide valuable solutions that are integrated into client workflows. We offer predictive analytics and decision support solutions to clients in rating, underwriting, claims, catastrophe, weather risk, and many other fields. In the United States (“U.S.”) and around the world, we help clients protect individuals, communities, and businesses.

Our clients use our solutions to make better decisions about risk and improve operating efficiency. We refer to these products and services as solutions due to the integration among our services and the flexibility that enables our clients to purchase components or a comprehensive package. These solutions take various forms, including proprietary data assets, expert industry insight, statistical models, tailored analytic objects, and robust software platforms all designed to allow our clients to make more informed risk decisions. We believe our solutions for analyzing risk have a positive impact on our clients’ revenues and help them better manage their costs. In 2023, our clients included all of the top 100 property and casualty ("P&C") insurance providers in the U.S. for the lines of P&C services we offer. We believe that our commitment to our clients and the embedded nature of our solutions serve to strengthen and extend our relationships.

We believe that Verisk is uniquely positioned with a series of competitive advantages including:

• Proprietary Data Assets – Data is at the core of what we do. We use our proprietary and contributory data assets to develop predictive analytics and transformative models for our clients;

• Deep Insurance Industry Expertise and Focus – We have specialized and in-depth knowledge in insurance and risk management that drives our engagement with our clients;

• Long-standing Industry Relationships – Our early beginnings as an insurance rating bureau have established us as a trusted partner for the industry as well as a source of insights for our clients; and

• Scale to Drive Broad Distribution of Innovation – Our scale advantage enables us to innovate on behalf of the insurance industry and deliver solutions that strive to solve our clients’ biggest challenges.

Our Business Strategy

Our vision is to be the leading strategic data, analytics, and technology partner to the global insurance industry by delivering value to our clients through knowledge, expertise, and scale. Our business aims to build upon our competitive advantages and capitalizing on our scale and position within the industry. Our business strategy is driven by the following priorities:

• Drive Consistent & Predictable Growth. With our clear focus on insurance, integrated organization and our client-centric and results-oriented culture, we strive to deliver consistent and predictable growth. We are leveraging our strong client relationships to extend our reach within insurance. We are modernizing and advancing the capabilities of our core solutions using cloud technology and advanced analytical methods including machine learning and artificial intelligence ("AI") while also augmenting our solutions through the addition of new data assets and sources. In addition, we are working on building leadership positions in adjacent markets including life insurance, marketing, specialty business solutions, and resilience and sustainability. With the client at the center of all we do, we are driving innovation across our portfolio and partnering with our clients to help solve the insurance industries greatest challenges with a focus on rapidly changing technology, growing regulatory focus, and value creation;

• Drive Operating Efficiency and Profitability. Our subscription business model as well as our ability to build solutions that serve the insurance industry at large helps drive core operating leverage. In addition, we strive to deliver productivity enhancements and operating efficiency through the use of advanced technology and a global talent workforce. We seek to balance this with high return on capital investment into the business to continue to drive growth and profitability; and

• Ensure Disciplined Capital Allocation.** We are focused on generating strong cash flow and ensuring that we are disciplined in how we allocate that capital with a focus on directing capital to the highest return investments. First, we prioritize organic reinvestment in the business, which can produce high internal returns. Second, we look for selective, strategic acquisitions that can expand our data assets, augment our capabilities, and expand our reach within the insurance industry while also creating value by leveraging our capabilities and resources. Finally, we expect to return excess capital to shareholders while also maintaining a strong balance sheet.

Our History

We trace our history to 1971, when Insurance Services Office, Inc. ("ISO") started operations as a not-for-profit advisory and rating organization providing services to the U.S. P&C insurance industry. ISO was formed as an association of insurance companies to gather statistical data and other information from insurers and report to regulators, as required by law. ISO’s original functions also included developing programs to help insurers define and manage insurance solutions and providing information to help insurers determine their own independent premium rates. Insurers used and continue to use our offerings primarily in their product development, underwriting, and rating functions.

On May 23, 2008, in contemplation of our initial public offering ("IPO"), ISO formed Verisk Analytics, Inc. ("Verisk"), a Delaware corporation, to be the holding company for our business. Verisk was initially formed as a wholly owned subsidiary of ISO. On October 6, 2009, in connection with our IPO, we effected a reorganization whereby ISO became a wholly owned subsidiary of Verisk. Verisk common stock began trading on the NASDAQ Global Select Market on October 7, 2009, under the ticker symbol “VRSK.”

Segments

Our operating segments have historically been Insurance, Energy and Specialized Markets, and Financial Services. On March 11, 2022 and April 8, 2022, we sold 3E Company Environmental, Ecological and Engineering ("3E"), our environmental health and safety business, which represented the “specialized markets” in our Energy and Specialized Markets segment, and our Financial Services segment, respectively. We assessed the sale of 3E and Financial Services segment per the guidance in ASC 205-20, Discontinued Operations ("ASC 205-20"), and determined that the transactions did not qualify as a discontinued operation because they did not, quantitatively or qualitatively, represent a strategic shift that has or will have a major effect on our operations and financial results. On October 28, 2022, we also entered into an equity purchase agreement to sell Wood Mackenzie, Inc. and Verisk New UK Holdco LP (together with their respective subsidiaries, our “Energy business”). The transaction closed on February 1, 2023. The Energy business qualified as held for sale in the fourth quarter of 2022 and was classified as a discontinued operation per the guidance in ASC 205-20, as we determined that this transaction represents a strategic shift that has or will have a major effect on our operations and financial results. Accordingly, all results of the Energy business have been removed from continuing operations and presented as discontinued operations in our consolidated statements of operations and assets and liabilities held for sale for all periods presented. Results of our Energy business are reported as a discontinued operation for the year ended December 31, 2022 and for all prior periods presented. See Note 11. Dispositions and Discontinued Operation for further discussion.

Insurance Segment

We now operate in one segment, Insurance, which primarily serves our P&C insurance customers across most personal and commercial lines of business, focusing on the fundamental building blocks of insurance programs, 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 also develop and utilize machine-learned and artificially intelligent models to forecast scenarios and produce both standard and customized analytics that help our customers better manage their businesses, including detecting fraud before and after a loss event and quantifying losses. Our customers, acquired over more than 50 years, include most of the P&C insurance providers in the U.S. In recent years, we have expanded our offerings to serve certain non-U.S. markets and into the fields of life insurance and annuities, as well as insurance marketing. We offer our solutions and services primarily through annual subscriptions or long-term agreements, which are typically prepaid and represented approximately 80% of our revenues in 2023. We believe we are well positioned to increase our penetration of the global insurance industry because of our proprietary data assets, long-standing industry relationships, deep insurance industry expertise, and our scale to drive broad distribution of our new innovations.

Underwriting

Powered by proprietary and contributory data and advanced analytics and technologies, we offer a full suite of solutions to support our P&C clients across the insurance policy lifecycle. This support spans their product development, marketing, new and renewal underwriting, risk selection and segmentation, pricing, and straight through to policy binding and issuance. We continued to grow our presence internationally and expand our capabilities into new markets, such as life insurance and annuities, and into new workflows, such as marketing and customer acquisition.

Forms, Rules, and Loss Costs

We are the recognized leader in the U.S. for industry-standard insurance programs that help P&C insurers define coverages and issue policies. We provide policy language, prospective loss costs, policy writing and rating rules, and a variety of underwriting solutions for risk selection and segmentation, pricing, and workflow optimization across 31 lines of insurance. Our policy language, prospective loss cost information, and policy writing rules can serve as integrated, turnkey insurance programs for our clients.

Insurance companies need to ensure that their policy language, rules, and rates comply with all applicable legal and regulatory requirements. They must also make sure their policies remain competitive by promptly changing coverages in response to changes in statutes, case law, or regulatory requirements. To meet our clients’ needs, we process approximately 2,000 regulatory filings and interface with state regulators in all 50 states plus the District of Columbia, Guam, Puerto Rico, and the Virgin Islands each year to ensure smooth implementation of our rules and forms. When insurers choose to develop their own alternative programs, our industry-standard insurance programs also help regulators ensure that such insurers’ policies meet basic coverage requirements.

Standardized coverage language, which has been tested in litigation and tailored to reflect judicial interpretation, helps ensure consistent treatment of claimants. As a result, our industry-standard language also simplifies claim settlements and can reduce the occurrence of costly litigation because our language causes the meaning of coverage terminology to become established and known. Our policy language includes standard coverage language, endorsements, and policy writing support language that assist our clients in understanding the risks they assume and the coverages they offer. With these policy programs, insurers also benefit from economies of scale. We have more than 240 insurance experts and specialized lawyers reviewing changes in each state’s insurance rules and regulations, including an average of approximately 14,800 legislative actions, 12,500 regulatory actions, and 2,000 court decisions per year, to make any required changes to our policy language and rating information.

To cover the wide variety of risks in the marketplace, we offer a broad range of policy programs. For example, in the homeowners line of insurance, we maintain policy language and rules for approximately seven basic coverages, 385 national endorsements, and 685 state-specific endorsements.

The P&C insurance industry is heavily regulated in the U.S.; P&C insurers are required to collect statistical data about their premiums and losses and to report that data to regulators in every state in which they operate. Our statistical agent services have enabled P&C insurers to meet those regulatory requirements for more than 50 years.

We aggregate the data, and as a licensed or appointed “statistical agent” in all 50 states, Puerto Rico, and the District of Columbia, we report those statistics to insurance regulators. We are able to capture significant economies of scale given the level of penetration of this service within the U.S. P&C insurance industry.

To provide our clients and the regulators with the information they require, we maintain one of the largest private databases in the world. Over the past five decades, we have developed core expertise in acquiring, processing, managing, protecting, and operating large and comprehensive databases that are the foundation of our insurance offerings. We use our proprietary technology to assemble, organize, and update vast amounts of detailed information submitted by our clients. We supplement this data with publicly available information.

In 2023, P&C insurers sent us approximately 2.8 billion detailed individual records of insurance transactions, such as insurance premiums collected or losses incurred. We maintain an underwriting database of more than 34.5 billion statistical records, including approximately 9.2 billion commercial lines records and approximately 25 billion personal lines records. We collect unit transaction detail of each premium and loss record, which enhances the validity, reliability, and accuracy of our data sets and our actuarial analyses. Across all of our insurance lines, our proprietary quality process includes more than 2,900 separate checks to ensure that the data meets our high standards.

Using our large database of premium and loss data, we provide actuarial services to help our clients analyze and price their risks. Our actuaries are able to perform sophisticated analyses using our predictive models and analytic methods to help our P&C insurance clients with pricing, loss reserving, and market analysis. We distribute a number of actuarial solutions and offer flexible services to meet our clients’ needs. In addition, our actuarial consultants provide customized services for our clients 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. We also supply information to various clients in other markets, including reinsurance and government agencies.

We project clients' future losses and loss expenses using a broad set of data. Those projections tend to be more reliable than if our clients used their own data exclusively. We make a number of actuarial adjustments before the data is used to estimate future costs. Our clients can use our estimates of future costs in making independent decisions about the prices charged for their policies. For most P&C insurers in most lines of business, we believe that our estimates of future costs are an essential input to rating decisions. Our actuarial solutions and services are also used to create the analytics underlying our industry-standard insurance programs described above.

In response to the challenges faced by our clients to reduce operating complexity and improve their speed to market, we are undertaking an extensive modernization of our core lines product. This “reimagine” of our forms, rules, loss costs and related solutions is designed to deliver increased value to our customers. The Reimagine program will include significant enhancements to our existing solutions; new digital workflow tools, insights, and analytics; and an enhanced content delivery platform.

Underwriting Data and Analytics Solutions

We gather information on individual properties, vehicles and communities providing the breadth and depth of data and analytics needed to support our clients as they evaluate, segment, and price personal and commercial insurance, as well as commercial liability insurance, throughout the policy lifecycle. Our property- and auto- specific rating and underwriting information allows our clients to understand, quantify, underwrite, mitigate, and avoid potential loss for these risks.

Our database contains data and analytics on approximately 15.9 million commercial properties in the U.S. We have a staff of approximately 500 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 more than 300,000 commercial properties to collect information on new buildings, verify building attributes, and provide specific loss costs. Our auto solutions are powered by a mix of third-party and proprietary data ranging from 2 billion traffic court records to 500 billion miles of connected car telematics data and we have characteristics on more than 270 million insured drivers and 280 million registered vehicles with access to expansive industry databases on loss costs and claims.

We are a leading provider of innovative solutions for the personal underwriting markets, including homeowners and auto lines. Drawing on an array of resources from proprietary and third-party data to geospatial imagery, 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 help ensure fairness to the consumer and a reasonable return for the insurer. Our solutions apply advanced predictive analytics to our deep reservoir of data and information to gauge the degree and cost of risk quickly and precisely, and our workflow tools help insurers increase speed and cost-efficiency while enhancing customer experiences. These solutions span a range of applications—from using precise home reconstruction costs to help policyholders have the right amount of coverage, to providing auto insurers with the data that supports offering consumers a bindable quote in minutes through modern API’s.

We also provide proprietary analytic measures of the ability of individual communities to mitigate losses from important perils. Nearly every property insurer in the U.S. uses our evaluations of community firefighting capabilities to help determine premiums for fire insurance throughout the country. We provide field-verified and validated data on fire protection services for approximately 36,000 fire response jurisdictions. We also offer services to evaluate the effectiveness of community enforcement of building codes and the efforts of communities to mitigate damage from flooding.

Further, we provide information on the insurance rating territories, premium taxes, crime risk, and hazards of windstorm, earthquake, wildfire, and other perils. To supplement our data on specific commercial properties and individual communities, we have assembled, from a variety of internal and third-party sources, information on hazards related to geographic locations representing every postal address in the U.S. Insurers use this information not only for policy quoting but also for analyzing risk concentration in geographical areas. We also make our data and analytics available to commercial real estate lenders to allow them to better understand risks associated with people to whom they lend.

Extreme Event Solutions

We are a leader in and pioneered the field of probabilistic catastrophe modeling used by insurers, reinsurers, intermediaries, financial institutions, and governments to manage their risk from extreme events. Our models, which form the basis of our solutions, enable companies to identify, quantify, and plan for the financial consequences of catastrophes. We have developed models for hurricanes, earthquakes, winter storms, tornadoes, hailstorms, wildfires, and floods in more than 120 countries, as well as for pandemics worldwide. We have developed a probabilistic terrorism model capable of quantifying the risk in the U.S. from this evolving threat, which supports pricing and underwriting decisions down to the level of an individual policy, as well as models for estimating losses to crop insurance programs in the U.S., Canada, India, and China. Our newest models offer risk quantification solutions for the casualty line of business.

We also help businesses and governments better anticipate and monitor risks in Earth’s natural environment. We prepare certain agencies and companies to anticipate, manage, react to, and profit from climate- and weather-related risk. We serve our customers by providing advanced research, development, and analysis delivered in reports, data streams, and software solutions. We are dedicated to the advancement of the atmospheric and remote sensing science disciplines and directly addressing problems regarding weather, climate, and air quality as well as oceanography and the planetary sciences. Through research conducted by our in-house scientific staff, and often in collaboration with prominent scientists at academic and other research institutions, we have developed analytical tools to help measure and observe environmental properties and translate those measurements into actionable information.

Finally, we offer global risk intelligence providing insight into sustainability, resilience, and environmental, social, and governance (ESG) issues, underpinned by geospatial data and analytics. We provide intelligence on sustainability, resilience, human rights, sovereign and political risk, and ESG—stitching together these disparate issues into an interconnected global view built upon objective insight and data.

Life Insurance Solutions

In recent years we have expanded our offerings to also serve the life insurance and annuities markets through our 2019 acquisition of FAST. Life Insurance Solutions enable new approaches across the policy life cycle through no-code technology, data analytics, and modeling. We have developed a suite of solutions that apply advanced analytics, automation, and machine learning to existing and emerging data sources. Our solutions are designed to help transform current workflows in life insurance underwriting, claim insights, policy administration, unclaimed property/equity, compliance and fraud detection, and actuarial and portfolio modeling. Our industry-leading FAST platform can reduce time to market, enables faster policy conversion, and can reduce information technology costs for our customers, uniquely positioning us to help support the modernization of the life insurance industry.

Specialty Business Solutions

We are a leading software supplier to the global specialty insurance market with particular focus on the London specialty market where we have a long-standing client base. Our powerful software suite, coupled with our vast datasets, experience, and technology allows our clients to grow and better manage their business with greater efficiency, flexibility, and data governance. Our solutions serve insurers, (re)insurers, brokers, cover holders, and managing general agents (MGAs) in London and across the globe.

We help drive the success of many of the fastest growing insurance and reinsurance specialists by providing full end-to-end management of insurance and reinsurance business. Our suite of software solutions covers a broad range of insurance processes from policy negotiation and placement, pricing and policy administration through to claims and outwards reinsurance.

Many of our solutions can be integrated with one another and with capabilities across the organization to meet evolving client needs and offer a compelling digital ecosystem for the London and global insurance market. To that end, our global marketplace solution offers seamless real-time quote-to-bind electronic placing and distribution for the specialty insurance market.

Marketing Solutions

Through recent acquisitions, we extended our data and workflow capabilities to help the global insurance industry drive improvement in customer acquisition, growth, and retention. Marketing and advertising spend for insurers goes well beyond $10 billion and has continued to increase year over year. We possess unique and proven data sets that help the insurance industry more precisely segment, target, and optimize advertising and marketing spend. Solutions include compliant, real-time decisioning, profitability, and risk assessment (pre-quote and pre-underwriting) for inbound consumer interactions. We also power ongoing enrichment of prospective and current customer insights for the highest probability of retention and increased share of wallet (policy bundling) as well as full coverage of US households and consumers to drive prospect marketing and advertising strategies. Verisk Marketing Solutions brings a unique insurance-focused, specialized offering that covers insurance carriers’ holistic marketing data needs.

International Underwriting Solutions

We continue to expand our footprint of data and solutions to include international markets. Our international insurance markets grew through acquisitions and today serve a large number of insurers operating in the Canadian, United Kingdom (U.K.) and Irish property and casualty markets, and travel market. Additionally, our international market provides services to much of the Lloyd's of London market, while also serving clients in Continental Europe, Singapore, China, Australia, and New Zealand. The international enhanced commercial and residential property models and enriched data sets help insurers with triage, reconstruction value, risk selection, pricing, benchmarking, and portfolio management across multiple insured segments. Insurers also use our solutions to help fine-tune the accuracy of their rating models and to enhance underwriting results through a set of analytical solutions that predict the relative risk and variation of major insurance perils, including theft, flood, storm, fire, freeze, etc. In addition to property data and solutions, clients can benefit from decision and benchmarking analytics using firmographic, technographic, and business intelligence and proprietary management competency scores, delivered digitally to enable straight through processing. Our suite of international solutions also includes rating tools that automate the assessment of pre-existing conditions, helping travel and health insurers to get a broad view of a customer's medical risk and make underwriting decisions with speed and precision.

Claims

Our claims insurance solutions provide our customers analytics in fraud detection, compliance reporting, subrogation liability assessment, litigation, and repair cost estimation and valuation, including emerging areas of interest within these categories.

Property Estimating Solutions

We also provide data, analytics, and networking solutions for professionals involved in estimating all phases of building repair and reconstruction. We provide solutions for every phase of a building’s life, including:

• quantifying the ultimate cost of repair or reconstruction of damaged or destroyed buildings for personal and commercial properties;

• aiding in the settlement of insurance claims; and

• tracking the process of repair or reconstruction and facilitating communication among insurers, adjusters, contractors, and policyholders.

To help our customers estimate repair costs, we provide a solution that assists contractors and insurance adjusters in estimating repairs using a patented plan-sketching program that automatically calculates material and labor quantities for all desired construction or repairs to a structure based on user inputs.

We also provide our customers access to price lists, which include structural repair and restoration pricing for 468 separate economic areas in North America based on direct market surveys and analysis of actual customer claim experience. We revise this information monthly, and as often as weekly in the aftermath of major disasters, to reflect rapid price changes. Our structural repair and cleaning database contains approximately 21,000 unit-cost line items. 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 pricing data. This large percentage leads to accurate reporting of pricing information, which we believe is unmatched in the industry.

Our virtual claims-adjusting tools help improve policyholder satisfaction, reduce human error, and save on loss adjustment expense. These tools simplify collaboration among claims professionals, contractors, and policyholders as they work together remotely and efficiently. These cloud-based and on-premise solutions include real-time video collaboration, remote measuring tools, generative AI-powered damage assessment, and image analytics fraud warnings, among other features.

Customers access our ecosystem for enhanced claims handling and analysis. For example, they can use our weather API for near-real-time updates and valuable insights for responding to weather perils that can impact their policyholders and their business. They can also use our data insights to analyze and benchmark their performance against peers in the industry and to manage claims assignments.

Anti-Fraud Solutions

We are a leading provider of fraud-detection tools for the P&C insurance industry. Our anti-fraud solutions can improve our customers’ profitability by predicting the likelihood that fraud may be occurring and by detecting suspicious activity after it has occurred.

Our claims database lends significant support to the fight against insurance fraud. The database contains information from more than 1.7 billion claim records and is the world’s largest database of P&C claims information used for claims processing and fraud investigations. Insurers and other participants submit more than 184,000 new claims a day on average across all U.S. P&C insurance industry categories. The benefits of an industrywide claims database include improved efficiency in reporting data and searching for information, enhanced capabilities for detecting suspicious claims, and superior information for investigating fraudulent claims, suspicious individuals, and possible fraud rings. Our database also helps insurers fulfill their regulatory compliance reporting requirements at both the state and federal levels for delinquent child-support liens and other required checks.

When a claim is submitted, our system searches our claims database and returns information about other claims filed by the same individuals or businesses (either as claimants or insureds) that helps our customers determine if fraud may be occurring. The system searches for matches in identifying information fields, such as name, address, Social Security number, vehicle identification number, driver’s license number, tax identification number, or other parties to the loss. Our system also includes advanced name and address searching to perform intelligent searches and improve the overall quality of the matches.

Information from match reports speeds payment of meritorious claims while providing a defense against fraud and can lead to denial of a claim, negotiation of a reduced award, or further investigation by the insurer or law enforcement. We also have a suite of advanced fraud analytics solutions: a solution that uses predictive models to accurately score claims based on fraud indicators; an injury claims solution that uses predictive analytics to detect medical provider fraud, waste, and abuse; and a network analytics solution that helps detect patterns indicative of organized fraud. A claims adjuster or investigation professional can use our comprehensive case management system to manage claim investigations.

We continually pursue new solutions that help our customers keep abreast of changing markets and technology. For example, we developed a digital media database that allows customers to view prior-loss images on claim matches so they can detect pre-existing damage on new claims. Our advanced digital media forensics can detect suspicious claim-related photos, and our customers can flag stolen and synthetic identities in the database to help subscribers deter that type of fraud. We also provide accurate person and vehicle coverage details at first notice of loss (FNOL), including verified registered owner information through DMV data, contact information for the individual, and brief claims history.

Casualty Solutions

We offer a full suite of casualty/bodily injury solutions to serve the P&C industry, third-party administrators, and self-insured employers. Verisk casualty solutions focus on compliance (Medicare Secondary Payer and workers’ compensation state reporting); casualty claims decision support (severity detection and damage assessment); and workflow automation (automated medical record review and claims processing). Our compliance division offers Medicare Secondary Payer solutions and services to comply with the federal statute, including Section 111 Centers for Medicare & Medicaid Services (CMS) reporting, lien resolution/conditional payments, liabilities repayment, and ongoing protection of the Medicare Trust Fund via Medicare Set Aside (MSA) services. As the largest provider of Medicare compliance services in the industry, we play a critical role in assisting and protecting all stakeholders, including Medicare and its beneficiaries.

Our comprehensive workers’ compensation state reporting helps customers meet the very complex compliance requirements for reporting to states and other government related agencies and entities through an automated process driving efficiency and productivity for the U.S. P&C insurance industry.

Our casualty claims decision support and workflow automation offerings augment human capital in a claims organization to make accurate decisions while eliminating manual steps in the process. We have solutions that leverage AI and generative AI to automatically extract unstructured data from and summarize medical records for efficient review and analysis during claim processing and demand packages review to improve injury evaluations and settlement negotiations. We also offer tools that use predictive analytics to provide workers’ compensation severity scoring from first notice of loss through claim closure to help our customers accurately settle claims. For liability, our customers can use our solution to find comparative liability in personal auto, commercial auto, and general liability claims for injury evaluation, determining accident liability and identifying subrogation opportunities.

International Claims Solutions

We continue to expand our claim product offerings to international markets through internal innovations and acquisitions in both the United Kingdom and Continental Europe. Our solutions are centered around personal injury and motor franchises covering Germany, the Nordics, and the United Kingdom with complementary offerings to the property claims sector in the United Kingdom. Our solutions aim to enable greater certainty, lower indemnity, more automation, and quicker speed to settlement for our personal lines insurance customers. Where appropriate, we look to leverage our growing data assets to introduce claim analytics and anti-fraud solutions in these markets.

Energy and Specialized Markets Segment

Up until the sale of our Energy business on February 1, 2023, we were a leading provider of data analytics across the natural resources value chain including the global energy, chemicals, metals and mining, and power and renewables sectors. We delivered analysis and advice on assets, companies, governments, and markets based on proprietary near real time data as well as historic information. This enabled us to offer a comprehensive and integrated analysis of relevant commodities to our customers. We provided research and consulting services focusing on supporting customer capital allocation decisions, asset valuation and benchmarking, commodity markets, and corporate analysis. We offered consultancy in the areas of business environment, business improvement, business strategies, commercial advisory, and transaction support.

Before the sale of our specialized markets on March 11, 2022, we offered a comprehensive suite of data and information services that enable improved compliance with global environmental health and safety ("EH&S") requirements related to the safe manufacturing, distribution, transportation, usage, and disposal of chemicals and products. From the supply chain or solutions life cycle, we delivered a program specific to the EH&S compliance information and management needs of our customers. Our full-solutions life cycle and cross-supply chain approach provided a single, integrated solution for managing customers' EH&S capabilities, which resulted in improved processes and reduced cost, risk, and liability.

Financial Services

Before the sale of Financials Services Segment on April 8, 2022, we maintained the largest bank account consortia to provide competitive benchmarking, decisioning algorithms, business intelligence, and customized analytic services to financial institutions, payment networks and processors, alternative lenders, regulators, and merchants enabling better strategy, marketing, and risk decisions. We delivered unique solutions and services to an expanding customer base that valued the comprehensiveness of our data and solutions as well as our full wallet-spend view of a consumer. Complementing this, we leveraged our partnerships with processors and credit bureaus not only to augment the richness of our data but also to provide expanded solutions across the broad span of consumer banking and retail solutions.

Our Customers

The customers in our Insurance segment for the lines of P&C services we offer include the top 100 P&C insurance providers in the U.S., 18 of the top 25 global reinsurance companies, as well as domestic InsurTech companies and insurers in international markets. A substantial majority of P&C insurance providers in the U.S. use our statistical agent services to report to regulators, and the majority of insurers and reinsurers in the U.S. use our actuarial services and industry-standard insurance programs. In addition, certain agencies of the federal government as well as county and state governmental agencies and organizations use our solutions to help satisfy government needs for risk assessment and emergency response information. Within Extreme Events, we serve reinsurers, insurers, brokers, governments, and corporates helping them identify, quantify and plan for the financial consequences of catastrophes. For life and annuity insurers, we offer digital solutions including electronic applications and policy administration systems to enable automated/accelerated triage, underwriting, fraud detection, and modeling. Our claims database serves thousands of customers, representing approximately 90% of the P&C insurance industry by premium volume, approximately 500 self-insurers, approximately 400 third party administrators, several state fraud bureaus, and many law enforcement agencies involved in the investigation and prosecution of insurance fraud. 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 cost estimation pricing data.

Our Competitors

The breadth of markets we serve exposes us to a broad range of competitors as described below. Businesses that we acquire may introduce us to additional competitors.

Our Insurance segment operates primarily in the U.S. P&C insurance industry. We have a number of competitors in specific lines or services. We encounter competition from a number of sources, including insurers that develop internal technology and actuarial methods for proprietary insurance programs. Competitors also include other statistical agents and other advisory organizations, that provide underwriting rules, prospective loss costs, and coverage language. Competitors for our property-specific rating and underwriting information are primarily regional providers of commercial property inspections and surveys as well as emerging providers in the InsurTech space. We also compete with a variety of organizations that offer consulting services, primarily specialty technology and consulting firms. In addition, a customer may use its own internal resources rather than engage an outside firm for these services. Our underwriting solutions compete with a variety of companies in the marketplace. Our competitors include information technology product and services vendors; management and strategy consulting firms; and smaller specialized information technology and analytical services firms. Finally, in the life insurance sector, our solutions compete against numerous independent vendors, as well as the in-house technology departments of Life Insurers. In the P&C insurance claims and catastrophe modeling markets, certain products are offered by a number of companies in the areas of catastrophe modeling, repair cost estimating, claims investigative reports, claims fraud analytics, and injury claims analytics. We believe that our P&C insurance industry expertise, and our ability to offer multiple applications, services, and integrated solutions to individual customers are competitive strengths.

Development of New Solutions

We take a market-focused team approach to developing our solutions. Our operating units are responsible for developing, reviewing, and enhancing our various solutions and services. Our data management and production team designs and manages our processes and systems for market data procurement, proprietary data production, and quality control. Our teams support our efforts to create new information and solutions from available data and explore new methods of collecting data. We are focused on understanding and documenting business unit and corporate data assets and data issues, sharing and combining data assets across the enterprise, creating an enterprise data strategy, facilitating research and product development, and promoting cross-enterprise communication.

Our software development teams build the technology used in many of our solutions. As part of our product development process, we continually solicit feedback from our customers on the value of our solutions and services and the market’s needs. We have established an extensive system of customer advisory panels that meet regularly throughout the year to help us respond effectively to the needs of our markets. In addition, we use frequent sales calls, executive visits, user group meetings, and other industry forums to gather information to align our product development efforts with the needs of the market. We also use a variety of market research techniques to enhance our understanding of our customers and the markets in which they operate.

We add to our offerings through an active acquisition program. Since 2021, we have acquired 13 businesses, which have allowed us to enter new markets, offer new solutions, and enhance the value of existing services with additional proprietary sources of data.

When we find it advantageous, we augment our proprietary data sources and systems by forming alliances with other leading information providers and technology companies and integrating their product offerings into our offerings. This approach gives our customers the opportunity to obtain the information they need from a single source and more easily integrate the information into their workflows.

Sales, Marketing, and Customer Support

We sell our solutions and services primarily through direct interaction with our customers. We employ a three-tier sales structure that includes salespeople, technical consultants, and sales support. Within our Company, several areas have sales teams that specialize in specific solutions and services. Those specialized sales teams sell specific, highly technical solution sets to targeted markets in coordination with account management.

To provide account management to our largest customers, we divide our customers into three groups. Tier One (“Client Engagement Accounts") comprises our largest customers. Tier Two (“Strategic Accounts") represents both large and middle-market customer groups. Tier Three is composed of small and specialized companies that may represent one line of business, may be regionally focused, or are recent new entrants into the marketplace. In Tier One and Tier Two segments, we have sales teams organized by the following specialties: personal or commercial lines underwriting and pricing, claims, and catastrophe risk. In the Tier Three segment, we assign a sales generalist with overall account management responsibility. Our tiered approach has proven to be a successful sales model and approach to building customer relationships. Our senior executives regularly engage with the senior management of our customers to ensure customer satisfaction and strategic alignment and to support mutual partnership innovation opportunities.

Salespeople participate in both sales and customer service activities. They provide direct support, interacting frequently with assigned customers to ensure a satisfactory experience using our services. Salespeople primarily seek out new sales opportunities and work with the various product teams to coordinate sales activities and ensure our solutions fit the customer's needs. We believe our salespeople’s product knowledge, skills to develop relationships of trust, and local presence differentiate us from our competition. Subject matter experts work with salespeople on specific opportunities for their assigned solutions and segments. Salespeople manage the overall sales process and subject matter experts manage the rigorous integration and functional fit discussions to ensure mutual success and satisfaction. Both salespeople and technical consultants have responsibility for identifying new sales opportunities as well as handling renewals of existing business. A team approach and a common customer relationship management system allow for effective coordination among the groups.

Sources of Our Data

The data we use to perform our analytics and power our solutions is sourced through seven different kinds of data arrangements. First, we gather data from our customers within agreements that also permit our customers to use the solutions created from their data. Those agreements remain in effect unless the data contributor chooses to opt out. It is very rare that contributors elect not to continue providing us data. Second, we have agreements with data contributors in which we specify the particular uses of their data and provide their required levels of privacy, protection of data, and where necessary, de-identification of data. The agreements represent no cost to us, generally feature a specified period of time for the data contributions, and require renewal. Third, we “mine” data found inside the transactions supported by our solutions; as an example, we use the claims settlement data generated inside our repair cost estimating solution to improve the cost factors used in our models. Again, those arrangements represent no cost to us, and we obtain the consent of our customers to make use of their data in this way. Fourth, we source data generally at no cost from public sources, including federal, state, and local governments. Fifth, we gather data about the physical characteristics of commercial properties through the direct observation of our field staff members, who also perform property surveys at the request of, and facilitated by, property insurers. Sixth, we collect data, or license or purchase from third parties, on geographic and spatially referenced information relating to residential and commercial structures by using the latest remote sensing and machine learning technologies. Lastly, we purchase data from data aggregators under contracts that reflect prevailing market pricing for the data elements purchased, including county tax assessor records, descriptions of hazards such as flood plains, and professional licenses. We are the owners of the derivative solutions we create using the data we collect.

Information Technology

Technology

Our information technology systems and the more recent adoption of cloud computing are fundamental to our success. They are used for the storage, processing, access, and delivery of the data that forms the foundation of our business and the development and delivery of the solutions we provide to our customers. We generally own, or have secured ongoing rights to use for the purposes of our business, all the customer-facing applications that are material to our operations. We support and implement a mix of technologies and focus on implementing the most efficient technology for any given business requirement or task.

Data Centers

In 2023, with our migration to cloud computing, we closed our Lehi, Utah Data Center. We have plans to close our Somerset, New Jersey facility in the first half of 2024. We will continue to maintain other datacenters dedicated to other businesses we acquired recently.

Disaster Recovery

We are committed to a framework for business continuity management and carry out annual reviews of the state of preparedness of each business unit. As we migrate our application to public cloud, we also evaluate the level of redundancy required for each application. We leverage native cloud capabilities with regards to availability and use both zones and regions in public cloud based on availability requirements. Business continuity planning is in place for all of our critical business processes to provide for the prompt and effective continuation of critical services in the event of a business disruption. Our business continuity program adheres to ISO 22301:2019, which is an international standard for business continuity. All business impact analysis and business continuity plans are reviewed and updated, at a minimum, annually or when significant business changes occur.

Security

We have adopted a wide range of measures to secure our IT infrastructure and data. Security measures generally cover the following key areas: security policies and governance committees, physical security, logical security of the perimeter, network security such as firewalls, logical access to applications and operating systems, deployment of endpoint anti-malware software, email security, and appropriate procedures relating to removable media such as laptops. Laptops are encrypted, and media leaving our premises and sent to third-party storage facilities are also encrypted. Our commitment to security has earned ISO 27001:2013 Certification for our core data centers, which is an international standard for best practices associated with our Information Security Management System. See also "Item 1C. Cybersecurity."

Intellectual Property

We own a significant number of intellectual property rights, including copyrights, trademarks, trade secrets, and patents. Specifically, our policy language, insurance manuals, software, and databases are protected by both registered and common law copyrights. and the licensing of those materials to our customers for their use represents a large portion of our revenue. We also own in excess of 600 trademarks in the U.S. and foreign countries, including the names of our solutions and services and our logos and tag lines, many of which are registered. We believe many of our trademarks, trade names, service marks, and logos to be of material importance to our business, as they assist our customers in identifying our solutions and services and the quality that stands behind them. We consider our intellectual property to be proprietary, and we rely on a combination of statutory (for example, copyright, trademark, trade secret, and patent) and contractual safeguards in a comprehensive intellectual property enforcement program to protect it wherever it is used.

We also own several patents and have several pending patent applications in the U.S. that complement our solutions. We believe the protection of our proprietary technology is important to our success, and we will continue to seek to protect those intellectual property assets for which we have expended substantial research and development capital and that are material to our business.

To maintain control of our intellectual property, we enter into contractual agreements with our customers, granting each customer permission to use our solutions and services, including our software and databases. This helps maintain the integrity of our proprietary intellectual property and to protect the embedded information and technology contained in our solutions. As a general practice, employees, contractors, and other parties with access to our proprietary information sign agreements that prohibit the unauthorized use or disclosure of our proprietary rights, information, and technology.

Human Capital

Our global workforce is united by our mission to serve, add value, and innovate for our customers. We continue to invest in our people worldwide by encouraging all employees to reach their full potential through our focus on learning, providing competitive compensation and benefits, and our culture anchored on our purpose driven values of results, learning, and caring.

As a knowledge-based business, we carefully integrate the skills and talents of approximately 7,500 employees worldwide as of December 31, 2023. Most of our highly credentialed team holds advanced degrees and professional certifications specializing in actuarial science, chemistry and physics, commercial banking and finance, commodity analytics, data science and artificial intelligence, economics, engineering, GIS mapping, meteorology, natural resources, predictive analytics, supply chain, and other fields.

Approximately 62% of our employees are based in the United States, 12% in the United Kingdom, 8% in India, with the remainder serving in 18 other countries across the globe.

Very few of our employees are represented by unions or subject to collective bargaining agreements, and only a small number of employees in Germany are represented by a works council. We consider our relationship with our employees to be good and have not experienced interruptions of operations due to labor disagreements.

We support and work to inspire our people with a collaborative and engaging culture, and career development and learning opportunities at all levels, competitive compensation and benefits, an ongoing focus on well-being, and responsive leadership. Starting in 2021, we introduced a common global wellbeing day across the enterprise to recognize the importance of the total wellbeing of our workforce. In addition, in 2022, we introduced Juneteenth as a U.S. holiday to recognize this significant milestone in U.S. history.

In 2023, career development across the Company was prioritized. We listened to employee and manager feedback and implemented an employee-centric strategy. We took the first step towards providing clearer pathways for career progression with the new Career Framework. We started this journey to create a structure that organizes jobs and supports career growth. We believe the Career Framework will put Verisk in a better position to attract, retain, and engage talent to help us meet our current and future business needs. The framework will provide clarity on what it means to be in a certain role, so employees can leverage it to set goals and find different development opportunities within the Company.

Each quarter, employees and managers were provided customized training and were prompted to review and discuss goals, progress, and ways to grow and develop. We supported managers by offering targeted training around having productive career conversations. We saw meaningful impact from this training. 63% of managers attended and 75% of managers who attended confirmed having career conversations with their direct reports. This year, we also introduced in-person, conference style career events in five major locations, globally "CareerCon". These events (attended by 755 employees globally) were structured around topics that included career pivots, career growth and career development tools. In addition, over 11,500 attendees were recorded at various targeted training sessions and "Learning Breaks" on topics that included leadership, motivation, feedback, creativity, and learning.

Our leadership development programs are targeted at rising professionals and first-time managers. Both programs were redesigned to align with our new corporate values and achieved global reach with the addition of APAC cohorts. Our rising professionals program participation increased by 20% in 2023. The 2023 Leadership Meeting brought together 107 thought leaders across our business. The event fostered understanding of business strategy, visibility, and alignment on 2023 key priorities, and created momentum and engagement for the future. New for 2023, we introduced a targeted learning program for a small group of high potential talent, giving them access to meet members of our Board of Directors and network across business lines.

Throughout this year of change and steady improvement, we continued to have an engaged employee population. We continued to curate self-paced learning resources and create real-time opportunities for employees to take charge of their development and learn from each other. All employees have access to our world-class virtual learning platform, which features thousands of courses taught by industry experts. Employees focused on building leadership, organizational, and technical skills on the platform. Course enrollments remained steady at approximately 49,000. Enrollment on our more specialized, long-form learning platform increased by 35%. Learners spent an average of 15 hours on the platform.

We offer competitive salaries, short and long-term incentives, and the opportunity for advancement. In addition, our program includes paid time off (“PTO”), flextime and telecommuting options, and a 401(k) program with a 100% company cash match (up to 6%). We also offer health insurance plans, no-cost life insurance equivalent to annual salary (with the option to purchase more), a discounted stock purchase program, a variety of physical, mental, and financial well-being offerings and resources, and more. Terms vary by business unit and country.

Employees can also take advantage of our employee networks, grassroots groups that help support diversity-related programs and events and promote an inclusive community. We currently have eight networks: the Verisk Women's Network, the Verisk Pride Network, the Verisk Veterans and Military Service Members Network, the Verisk REACH Network (dedicated to empowering Black employees), the Verisk Parents Network, the Verisk Unidos Network (promoting awareness of Hispanic and Latinx culture), the Verisk Asian Network, the Verisk Accessibility Network, and the recently added Verisk Indigenous Network, launched to commemorate National Day for Truth and Reconciliation in September. In 2023, our Employee Networks (ENs) increased in membership with almost one-third of Verisk employees worldwide in at least one employee network.

A global mentoring program sponsored by our ENs is helping participants find an inclusive space in which to develop themselves, grow their careers, and build community. Over 200 mentee/mentor pairs participated in this year's cohort, spanning 14 business functions, 30 locations and 11 countries. Almost 2,000 hours of mentoring were delivered though this formal program in 2023.

We hosted our second installment of Days of Understanding in July, as part of the CEO action Pledge for Diversity & Inclusion. Sessions were held over three days that tackled courageous topics and conversations around colorism, transgender rights, women's rights, working parent challenges, and navigating a civilian world. More than 1,000 employees around the globe attended.

In 2023, we sought to broaden our talent pool by strengthening relationships with professional organizations and career conferences advancing the interest of underrepresented groups. We engaged with several organizations supporting Black and Latino actuaries and engineers, people of color in the insurance industry, women in insurance and technology, and LGBTQ+ professionals in IT and other sectors in India. These organizations include Association of Professional Insurance Women (APIW), Black Engineer of the Year Award (BEYA), Gamma Iota Sigma, International Association of Black Actuaries (IABA), National African American Insurance Association (NIAAIA), Organization Latino Actuaries (OLA), and Reimagining Inclusion for Social Equity (RISE).

In 2023, over 800 Verisk employees across 23 locations and 7 countries registered volunteer hours during Verisk Volunteer Week. Efforts included a Rise Against Hunger event with over 50,000 meals packed, donation drives, and local community cleanup activities.

The health and safety of our people working around the globe is a top priority, and our facilities worldwide follow rigorous, internally and externally audited, occupational health and safety policies. We also recognize that protecting the health, safety and wellbeing of our employees is crucial to our ability to continue to address the impact of the global COVID-19 pandemic.

The majority of our people worked remotely in 2021 but moved to a hybrid work policy in 2022 and 2023 with at least 2 days in the office. Senior leaders moved to 3 days in the office in 2023. We saw increased collaboration and engagement as a result of these moves.

Our employee engagement score for 2023 is at 78%, a 1%-point increase since 2022. Verisk continues to be recognized for our outstanding workplace culture by Great Place to Work® in the U.S., receiving certification for the eighth consecutive year. In 2023, Verisk was certified for the fourth time in the United Kingdom, Spain, and India, and was certified for the second time in Poland. Employees feel Verisk meets the benchmark for innovation, inclusivity, company values, and leaders' effectiveness. We are also earning recognition from seven of the Best Workplaces™ lists including UK's Best Workplaces, UK's Best Workplace for Women, Spain's Best Workplaces, and Poland's Best Workplaces. The Great Place to Work Institute is a global authority on high-trust, high-performance workplaces. To achieve certification, Verisk employees are surveyed on the extent to which they reported a consistently great workplace experience. To create an outstanding employee experience, leaders understand and act on their results and insights, and continuously communicate with employees through town halls and local engagement events.

Regulation

Because our business involves the distribution of certain personal, public, and nonpublic data to businesses and governmental entities that make eligibility, service, and marketing decisions based on such data, certain of our solutions and services are subject to regulation under federal, state, and local laws in the U.S. and, to a lesser extent, in foreign countries. Examples of such regulation include the Fair Credit Reporting Act, which regulates the use of consumer credit report information; the Gramm-Leach-Bliley Act, which regulates the use of nonpublic personal financial information held by financial institutions and applies indirectly to companies that provide services to financial institutions; the Drivers Privacy Protection Act, which prohibits the public disclosure, use, or resale by any state’s department of motor vehicles of personal information about an individual that was obtained by the department in connection with a motor vehicle record, except for a “permissible purpose”; and various other federal, state, and local laws and regulations.

Those laws generally restrict the use and disclosure of personal information and provide consumers certain rights to know the manner in which their personal information is being used, to challenge the accuracy of such information, and/or to prevent the use and disclosure of such information. In certain instances, the laws also impose requirements for safeguarding personal information through the issuance of data security standards or guidelines. Certain state laws impose similar privacy obligations as well as obligations to provide notification of security breaches in certain circumstances.

We are also licensed as a rating, rate service, advisory, or statistical organization under state insurance codes in all 50 states, Puerto Rico, Guam, the U.S. Virgin Islands, and the District of Columbia. As such an advisory organization, we provide statistical, actuarial, policy language development, and related solutions and services to P&C insurers, including advisory prospective loss costs, other prospective cost information, manual rules, and policy language. We also serve as an officially designated statistical agent of state insurance regulators to collect policy writing and loss statistics of individual insurers and compile that information into reports used by the regulators.

Many of our solutions, services, and operations as well as insurers' use of our services are subject to state rather than federal regulation by virtue of the McCarran-Ferguson Act. As a result, many of our operations and solutions are subject to review and/or approval by state regulators. Further, our operations involving licensed advisory organization activities are subject to periodic examinations conducted by state regulators; and our operations and solutions are subject to state antitrust and trade practice statutes within or outside state insurance codes, which are typically enforced by state attorneys general and/or insurance regulators.

Available Information

We maintain an Investor Relations website on the Internet at investor.verisk.com. We make available free of charge on or through this website, our annual, quarterly, and current reports and any amendments to those reports as soon as reasonably practicable following the time they are electronically filed with or furnished to the U.S. Securities and Exchange Commission ("SEC"). For access to the filings, click the “SEC Filings” link on the “Financials” tab on our Investor Relations homepage. The contents of our website are not incorporated into this filing. Verisk trades on the NASDAQ Global Market in the Nasdaq Global Select Market segment under the ticker symbol “VRSK.” Our stock was first publicly traded on October 7, 2009.

The public may read any materials filed by Verisk with the SEC on the SEC's Internet site (www.sec.gov), which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.