Verisk Analytics [NASDAQ:VRSK]: Enabling Decisions that Enhance Business Value

CIO VendorScott G. Stephenson, Chairman, President & CEO
The insurance industry has traditionally collected an umpteen amount of data but had been slower to monetize it. Then a time came when the insurance industry’s customers eventually moved online and preferred less personal interaction. The customers started to compare products and prices before making any purchase to satisfy their own preferences. That led to the increase in data exponentially. It is said that though the inflation of data disrupted the insurance industry, it cared little about it. However, now as the insurance industry is delving into numbers, it is intensely searching for data analytics providers who can help them deliver benefits to both the industry and the customer. Making use of advanced analytics to monetize new sources of data is Verisk Analytics [Nasdaq:VRSK] that draws on unique data assets and deep domain expertise to provide predictive analytics and decision support solutions in fraud prevention, actuarial science, insurance coverage, fire protection, catastrophe and weather risk, data management, and other fields. The firm analyzes data and delivers information in such formats that its customers can easily understand and use it.

Headquartered in New Jersey, the firm operates in around thirty countries and helps customers protect people, property, and financial assets. Agency markets, personal property, commercial property, personal auto, commercial auto, predictive modeling, workers’ compensation, and general liability are the areas in which Verisk Analytics operates. It also develops practical tools that integrate into its customers’ workflow. “We are a data analytics company helping our customers make crucial decisions every day that affect millions of lives and tens of thousands of businesses around the world,” says Scott G. Stephenson, Chairman, President, and CEO at Verisk Analytics.

The Verisk Family

Operating through units, Verisk Insurance Solutions include the industry-leading brands of ISO, AIR Worldwide, Insurance Information Exchange (iiX), and Xactware that provide risk-assessment services and decision analytics to insurance professionals. ISO plays a vital role in the property/casualty insurance marketplace by serving agents and brokers, insurance regulators, insurers, reinsurers, and risk managers. Some of the use cases of ISO’s products and services are it offers data to help professionals making independent decisions about their pricing, statistical and actuarial services, insurance policy language, tools for predictive modeling and scoring of risk, tools for identifying and preventing insurance fraud, information for marketing, loss control and premium audit, and risk consulting services. AIR Worldwide gives tragedy risk modeling solutions that make individuals, businesses, and society more pliant. After introducing the development and application of probabilistic catastrophe modeling in 1987, AIR Worldwide models the risk from natural catastrophes, terrorism, and pandemics globally through its advanced software, science, and consulting services.

Insurance Information Exchange (iiX) is about employee and driver screening solutions. It delivers solutions that help insurers by providing motor vehicle reports (MVRs), undisclosed driver reports, credit scoring, and other information insurers need to underwrite auto and property risks. While Xactware offers computer software for professionals involved in all stages of building and repair, its flagship estimating system, Xactimate, helps insurers to calculate the cost of repairs more accurately than ever before.

Capabilities Defining Verisk

From catastrophe management, claims and fraud to underwriting and rating, Verisk Analytics has the capability to handle everything. The other vital capabilities of the firm include insurance policy programs, technical advisory services, compliance and reporting, data and statistical services, and vehicle telematics.

In Catastrophe management, Verisk Analytics offers products, services, and analytical models to assess individual risks and evaluate risk transfer alternatives. The models can show how a catastrophe—both natural and human-made—can affect buildings and infrastructure. The models can also use historical events and extreme disaster scenarios to analyze exposure and loss for areas one specifies. Not only this but also during and after the catastrophe, Verisk Analytics supports its clients by helping industry track losses. The firm offers a number of tools to assist insurers, reinsurers, and other interested parties with alternative risk transfer.

“We do things The Verisk Way because we want our customers, colleagues, shareholders, and communities to flourish,” states Stephenson.

We are a data analytics company helping our customers make crucial decisions every day that affect millions of lives and tens of thousands of businesses around the world

Verisk also helps its clients define and cover the risks their policyholders face by offering standardized policy programs for personal and commercial lines. It provides programs for many specialty lines, including e-commerce, cyber risk, crime, and fidelity, inland marine and financial institutions; while Claims Management and Fraud Prevention help clients at every step of the claims lifecycle – from claims reporting and analysis to claims adjustment and investigations.

Verisk Analytics’ technical advisory services offer technical information, training programs, and annual meetings to fulfill the requirements of loss control and premium audit professionals. It helps clients classify exposures for commercial casualty insurance, consisting commercial auto, general liability, and workers’ compensation. The technical advisory services also provide legislative and regulatory information to manage commercial risks and loss control.

Verisk Analytics underwriting and rating help its clients understand and manage risks, enhance rate classification integrity, and support growth and retention strategies. To help clients price their risks, maximize profitability, and diminish premium leakage, underwriting and rating offer a number of products and services that include ProMetrix Reports, estimated loss cost quote report, building underwriting report, photopak, loss cost quote report, and property details report.

Moreover, Verisk Analytics’ compliance and reporting services help clients make more well-informed decisions, plan advantageously, and act in accordance with federal and state requirements for a number of areas. Its comprehensive set of workers' compensation products and services help clients in several areas, including compliance reporting, claims management, fraud detection and mitigation, cost containment, protocol design, data management, and claims settlement consultation, and premium audit.

Flag-bearer of Security

Recently, Verisk Analytics has partnered with Hyundai as the Korean automaker aims to deliver usage-based insurance to its customers. The partnership will help Hyundai customers to save money on insurance if they agree to share their data with Verisk. After the owner’s agreement, cars equipped with Hyundai’s BlueLink telematics platform will send data to the Verisk Data Exchange—a vast automotive-data stockpile that insurance firms leverage to determine rates. Also, the car owners who choose the data sharing option will get a Verisk Driving Score based on their road behavior, while those who show low-risk behavior or do not drive that much will get a lower insurance rate.

In another success story, ISO ClaimSearch Israel, a Verisk business, has signed a ten-year contract with the Israel Insurance Association to operate an advanced fraud detection database for Israel’s insurance market. The new database will provide innovative InsurTech features, including graphic link analytics, parameterized fraud indicators, advanced business intelligence tools. Talking about the new development, Gideon Stern, General Manager, ISO ClaimSearch Israel, says, “We’re proud to have been selected as the fraud detection database operator after an extensive RFP [request for proposal] screening process, and we look forward to our continued collaboration for the benefit of the industry at large.”

Road Ahead

Verisk Analytics’ unique data assets, deep domain expertise, deep integration into customer workflows, and the steady stream of first-to-market innovations distinguish it from its contemporaries. Due to its fast and effective services, the firm has an inevitable number of customer retention rates that includes the top 100 property/casualty insurers in the U.S., seven of the top ten global chemical manufacturers, nine of the top ten global energy providers, and all top thirty credit card issuers in the UK, Australia, and North America. “We have a long and distinguished history of supporting our customers in managing risk, making informed decisions, recovering from loss, complying with regulatory standards, and improving service—ultimately enhancing the lives of people everywhere,” mentions Stephenson.

In the future ahead, the firm aims to enhance its service by focusing more on customers and their success, innovation in partnership with customers, reimaging the marketplace, continuously working on the improvement, and by exhibiting n+1 thinking. “We pledge to be the world’s most effective and responsible data Analytics Company in pursuit of our customers’ most strategic opportunities. The Verisk Way—to serve, add value, and innovate—is our roadmap to achieve this vision,” concludes Stephenson.