Hello, everyone. My name is Alex Hess, and I am a Vice President o n Andrew Steinerman's U.S. Business and Information Services Equity Research Team. It is great to be here today with Verisk CFO, Elizabeth Mann. Elizabeth has been Verisk's CFO for four years now and has played a massive role in many of the firm's key initiatives during her time at Verisk. At this point, many of you in the room and many of you listening know Elizabeth quite well. That being said, it is still very much a privilege to welcome you here to All Stars, Elizabeth.
It is great to be here, great to see so many of you here. Thank you for having me in this beautiful room today.
I want to start with Verisk's performance historically in hard markets for insurance versus soft markets. About 20%-25% of your revenues have some linkage to some element of net written premium growth, and you have historically averaged, on an organic constant currency basis, about 6.8% growth in soft markets and 7.3% top line growth in hard markets. Help us understand, as you see the P&C market presently, it has been softening. Will the next move be towards continued softening? Will it be to firming? What impacts does that have for Verisk?
Yeah. Thanks for the question, Alex. Verisk was founded as a consortium of the U.S. property and casualty insurers over 50 years ago. One of the benefits of coming out of that historical model, as we separated from the industry, we set the expectation, and we set the revenue model for that business, that we would grow as our clients' businesses grew. Our pricing component on some of our contracts have an input from premium growth. That is a good thing in the long run because that has tied us to a large, stable, and growing market. It means that we have a correlation to pricing growth in some years. There are also various pricing components.
There is also the fact that we sell our business according to the value that it creates, and there are also kind of cross-sell and up-sell and other product dynamics. All of which has contributed to the stability of our revenue growth being in the 6%-8% organic constant currency range very consistently over time. In fact, each and every year since we went public back in 2009. But yes, there is a slight tailwind to our pricing in strong premium, hard premium years, and maybe a modest headwind in softer premium years, so that when we take an average going back to 2009, you get the stats that Alex Hess quoted, which is 7.3% growth in hard market years, 6.8% in soft market years. Modest differential there. Still very consistent with the average of about 7% organic constant currency revenue growth.
As to where we are right now in the cycle, we are coming off a couple of years of very strong premium growth, and entering a period with more normalized premium growth. So, premium growth over a historical average period being in the low to mid-single digit range, but can range from negative premium in the mid-2010s, I think, to very strong almost double digit premium growth. Again, we have a consistent track record of delivering growth in all of those premium environments.
Understood. So, maybe we will dive into the performance of the subscription business versus the transactional or non-subscription piece, if you will. It is about, I think, last quarter, 83% of your revenues were subscription driven, so 17% aren't. 80%+ is a very high number for an info services firm. And obviously, over time, you have focused a bit on transitioning products from transactional pricing to subscription-based models. But maybe just lay out for us, is the revenue growth story today in subscription still as strong as it was a year or two ago, where you were realizing good price increases and pricing to value nicely? Has there been any change in the underlying drivers this year?
Yes. Yes, it is as strong as it was a couple of years ago. We think that is coming from the importance of our products for our customers' business and the need in this environment to continue to have the best possible data and analytics to select the right risk and to price it accordingly. And so you have seen us kind of consistently, throughout, report our subscription revenue growth, which has been fairly strong.
Got it. The underlying drivers of that, is it still pricing-led to the same degree it was two, three years ago, or the last two, three years? Or is it leaning more on, say, new product innovation? How do we think about the balance there?
Yeah. It is both of those things over time. The pricing, we give a build to our overall 6%-8% organic constant currency growth rates based on pricing versus new products versus cross-sell and up-sell. Pricing contributes slightly more than half of the growth. I think 350 - 450 basis points is our target for the three-year cycle starting in 2026. There may be just a hair less contribution from pricing as we move into a more normalized premium environment, and more coming from new products and from cross-sell and up-sell.
Got it. Then conversely, whereas the subscription business has, in many periods in recent years, run above that 6% - 8% number, the transaction business has sort of been, again, smaller piece, has been in retreat a bit. Part of that is by design. You guys have switched a lot of products to the subscription model, maybe as they've matured and grown into the market and developed market adoption. Just help us think about, if I look the last 12 months, $510 million from those transactional products, that's down a couple tens of millions from peak. Obviously, there's discrete headwinds like weather, usage in some small products. Should investors think of this level, this $510 million level, as a floor off which that transaction business can return to growth and be a quality contributor?
Yeah. First of all, we don't run the business separately by transaction and subscription. We have a number of different businesses and products, and each of those is looking to maximize revenue according to whatever model fits that customer set best. That's our overall goal, is point one. There have been some puts and takes on the transactional side that you've heard us talk about over time. The largest one probably being a lighter weather year in 2025. So far, appearing to be slightly light versus average in 2026 as well. Let me maybe level set with an example that has been helpful for investors as they think about the mix of our subscription and transactional revenues. This comes particularly on some of our claims businesses, which provide property estimates for carriers and contractors for property repair that's associated with an insurance claim.
A tree falls on a house, the contractor goes on site, they develop the estimate of what materials and labor are going to be needed, and therefore, what the price of that repair is going to be for the carrier. That is a product that is sold both to the carriers and to the contractors. The carriers use that product on a subscription basis, on a subscription for a certain number of claims assignments. Above that number, they go into overage. They pay more per claim above their subscription level, at a price that is more attractive on the overage. The overage is a transactional revenue. Simplistically, let's say you have a customer with a $100 subscription, GBP 100 I should say here. So a GBP 100 subscription, and they have GBP 10 of overage charges.
We are going to go back to them the next year and say this has been our focus of, yes, converting some products from transactional to subscription, but also just increasing the subscription tier for customers. Which is good for them. It gives them more visibility and certainty. If you have a customer that has the GBP 10 of overage one year, we will go to them and say, "Don't you want to resubscribe at GBP 105 next year and have more volume included in that? Then you could have overages above that." If, let's say, the following year, the volume is lower than it was before, now we have locked in GBP 105 of subscription revenue. But the transactional may go to zero because the volume is lower. In that situation, it is better for us.
If the volumes had been higher, it would be better for the customer, because they have more included in their overall. Either way, if you just break out the transactional piece, it looks like a lot of variability on that GBP 10 of excess when we were looking to maximize the whole.
I got it. That makes sense. You mentioned that obviously weather has played a big impact on your results of late. Should we say benign weather?
Yes.
It is as simple as fewer named storms, fewer hailstorms in Texas means fewer trees falling over, means fewer claims, means fewer opportunities to set these pricing structures in motion.
That is right. Lighter weather is a good thing for policy holders, it is a good thing for homeowners, it is a good thing for our customers, the carriers, who have had very strong profitability in this environment. And which has maybe given them room to invest in other ways in data and analytics that also flows through as a benefit for us.
But for those businesses that have a revenue component from number of claims processed, it is a modest headwind.
Understood. I think this all comes in the context of four consecutive quarters of sub 6% organic constant currency revenue growth, obviously against that 6%-8% target. That is an unusual streak for Verisk. Is it as simple as, hey, look, we are going to get from notably benign weather to normalized weather, and then this is all sort of, oh, that was a weird year, a weird 12 months, or is there anything else that gives you confidence that the return to that 6%-8% number is super imminent? Or not super, let us say imminent.
Yeah. We talked about the headwinds from weather, and that did reduce our overall volumes. We are anniversary-ing what I would say was really the summer hurricane season of 2025 that was uniquely benign.
2026 is also potentially looking to be a modest year from a weather standpoint. From a year-over-year standpoint, that is not necessarily, at this point, as significant a headwind. From a growth standpoint, with 83% of our revenues coming from subscription, we think we have enough visibility, for example, that at our March Investor Day, yes, we recommitted or continued to commit to our expectations for 6%-8% as an annual organic constant currency growth target.
Great. Let's maybe talk about those Investor Day targets. You mentioned briefly, within that 6%-8%, which was provided at Investor Day in early 2023, and then again in early 2026.
Yeah.
This year, 6%-8% both times, and you've done a very good job sort of being in that band. You did tweak some of the underlying drivers. You increased your sort of framework for price realization, but also took down your framework cumulatively across cross-sell, up-sell, and new product innovation. What were some of the learnings that influenced those tweaks? Then maybe, how should investors be thinking about new product innovation at Verisk?
Yeah. We are very excited about our new product innovation. There is a couple things. When we increased the target on price, we slightly decreased those targets to get to the same total. Let me explain a little bit about the drivers of that. It is not that we are less bullish on innovation because we still have a lot of excitement and a lot of things we are launching, a lot of things in process. Two factors. One is we did sell, for example, our Verisk Marketing Solutions business, and so that had been one category that was included at the time in new products. It is a lower base that we have, sort of fewer shots on goal that we have to deliver that portfolio relative to the whole. That is one area. That may be one of the biggest pieces.
I think the other element is an acknowledgement of the rate of adoption within the insurance industry is a measured rate, just relative to the size of our whole. Then finally, there is the point that quite a bit of our new products and innovation, for example, our Core Lines Reimagine reinvestment in our core product and content that came in, that is being monetized through price increases.
For anybody in the room or listening who does not have the context, Core Lines Reimagine, functionally this is the Core Lines businesses are those that have been with Verisk since day one and really make the firm foundational. Over the last, I do not know, four or five years, you have gone on sort of this program, it is now winding down, or winding down, it is reaching its end state to really get that product where you want it to be for the future. We will touch a bit on that in a minute, but I think that is a good reminder on the marketing piece being out of the equation means fewer shots on goal.
But just to stay on new product innovation for a second, there were three areas that we thought, that being Andrew, Rohan, and I on the JP Morgan research team thought were really interesting as pertains to you guys, and those were auto insurance, aerial, and then the excess and surplus. I would like to talk briefly about the auto side. It is about 10% of your revenues. Can you give investors a sense for what sits within that 10% and where you stand today as far as competitive positioning versus where you want to be?
Yeah. Our auto business, we touch it a couple different places across our portfolio. Of course, our core Forms , Rules, and Loss Costs business covers auto, and our anti-fraud businesses also cover auto. But we have specific data products for it in what we call our underwriting data and analytics solutions part of our portfolio. And that I think is what people think of when they think about our auto business. Now, I will say the historical view of that business, Verisk historically had great strength in property and one of our competitors has great strength on the auto side of the insurance market. And so they are probably still the incumbent in that space. We have been a bit of a challenger.
We have some products that compete directly against the competitor, and then others that are new innovations that are built on some of the data sets that we have elsewhere that we think are unique. And so those are some of the areas that have had strong traction.
And those are still the areas for innovation for you guys, those sort of products that help people bind quotes faster, that help them review their portfolio for missing data inputs that could let you—
Yes. Yes. That's right. Yeah. Alex is referring to our LightSpeed product, which enables a carrier to quote and price a policy for a consumer shopping for auto insurance online in real time.
Got it. Then aerial imaging. Really interesting business here. Obviously, if you go in the U.S. you get a home quote, they will send a drone over your house. But you guys do not own the drones. You have no interest in owning the drones. You want to own and aggregate the data that underpins the images those drones return, right? Talk a bit more about your positioning, your innovation in aerial. Is this a needle mover for you guys? Or how to think about that business from the context of your portfolio?
Yeah. We do think of aerial imagery as one of the elements of one of the growth drivers in our property data sets. Aerial imagery is becoming more and more, well, cost-effective and more and more important as a way to measure particularly roof condition and external conditions around a house. We do not need to own or operate the hardware that is measuring the aerial imagery, but we can use that combined with our other property data sets to give insights about a roof. For example, when you are underwriting a new policy, one analytic that we produce from this aerial imagery. Historically, you would provide a roof age report, meaning this house was the roof rebuilt in 2010 or 2015 or 2020.
But we can now provide a more enhanced, effectively a remaining roof life statistic, which based on the aerial imagery and based on knowledge of what else has transpired in that environment and in that neighborhood. This roof may have been built in 2015, but does it act like an 11-year-old roof, or will it age like a five-year-old roof or a 20-year-old roof based on what else has happened and what the visual conditions are there? So that is an example where we can use the aerial imagery. We can combine it and enhance it with other data sets to create a new analytic that has value from assessing for a carrier underwriting and assessing the risk that they are writing.
Yeah. Get to study Verisk, get to study American home roofing demand.
Exactly.
Maybe let's talk a bit about the excess and surplus data business that you guys are, I would describe it as, budding or you're building it out, and our ears perked up because you recently mentioned that that's now got about $18 billion of historical and current premium data in it, and that was up from $10 billion early in the year, so it's growing quite nicely as far as coverage goes. Can you walk us through some of the opportunity, what you're going to do with this expanding coverage, and why this is something investors should care about?
Yeah. In our Forms, Rules, and Loss Costs, and in our underwriting businesses, the traditional perspective was this was really for the admitted lines of insurance. Admitted lines in the U.S. means essentially covered by regulators, so admitted in the regulated insurance market. We assist carriers with that regulatory process, so that was kind of really our traditional sweet spot. We came to find by accident that's different from excess and surplus lines of business, which is lines that are either not regulated by the regulators or higher value, and so exceeding the value of what the carrier will put in their book. Those were historically very idiosyncratic policies that were priced in a very one-off way, but weren't "Verisk-like" policies where having standardized view of data would be helpful.
Now, in today's environment, more and more, in particular, property risk in the U.S. is moving into that excess and surplus market. As, for example, the $10 million mansion on the coast of Florida, which has potentially high weather risk, is being seen as too high a value or too high a risk to fit into the admitted markets. So those risks are looking more and more like risks that Verisk knows something about, where an industry view of loss costs will be helpful for the markets. So it has gone from a little bit of an accidental customer set for us, where we've had some carriers in that space. I should also add there's the market dynamic where regular carriers that write admitted business are also now expanding into excess and surplus lines of business because it is an area of growth for them.
Our typical customer may now have a line or a book of business that they are familiar with the Verisk products and want to use them for that area. We've been expanding into this market. We've added to our team to bring specific coverage to that market, and it's an opportunity for us to continue to support that growing part of the insurance industry.
Got it. I think across these sort of hobby horses of ours, we have covered now that the investor should feel pretty good about the new pace of innovation, and we have not used the word AI yet in the 18—
Wow.
—months we have been doing this. Maybe that is a record for this event this year. Let us touch on AI. The number that I think resonated the most with us coming out of the earnings call was that there are 7,000 licensees on your XactAI solution, which sort of is very much often contractor-facing, not purely insurer or carrier-facing, but it is the AI version of your widely used Xactware claims estimation suite. Talk to us about what is resonating so well with XactAI in the marketplace. Is it the strong data foundation workflow capabilities, or is it just the user base is particularly prime there? Because 7,000 is a big number.
Yeah. It is a combination of a couple different things, and one is, yes, the value of the product and the desire for more efficiency in that space. The XactAI tool can bring generative AI tools on top of We talked about the software and the underlying pricing detail that enables the carriers and the contractors to develop this pricing estimate. Now you have got generative AI tools built into it. For example, one of the most popular features of this product is automated photo tagging. You can take a photo of the damage that you are assessing, and then the AI will populate, okay, here is the estimate, here is the price list, and so here is what the estimate will cost. That of course, requires review from the contractor.
It may hypothesize that it is a certain type of drywall, a certain dimension of it, and actually it needs to be modified, so there is carrier review. But that is one of the most popular features, and it significantly improves the throughput of number of estimates that can be reviewed by an adjuster or by a contractor in a given day. That is the popularity of it. That is one driver of the growth is the strength of the product.
The second, though, actually gets at something fundamental, which is the rate of adoption of AI products in different sectors. The rapid growth that you are seeing on the number of licenses is primarily on the contractor side today because they look at the product, they see something with a real return and a benefit for them. And the key thing is they are able to adopt and switch on relatively quickly.
In the carrier market, we also have users on that product. I think we said we have one of the top 10 using that. What you see there is on the carrier side, it does take a bit more time for AI-enhanced products to go through a review process, to go through an AI governance board, to go through legal and contracting review for both sides to understand data use rights and what exactly is being shared and what content. I think what we see there is the ability for adoption to be rapid when there is, number one, a value proposition, and that whatever kind of governance and contracting hurdles can be worked through quickly. We think it will also continue to deliver value over time on the carrier side. There is quite a bit of interest.
It is still going through, in many cases, the review process.
Yeah. We see that with a few info services firms that especially serve regulated use cases. The sales cycle with an AI-enabled product is not short right now.
Yeah.
But maybe to switch to, obviously, the other thing we are seeing a lot of in the information services space is the launch of MCP connectors and Verisk has two. One is your Forms, Rules, and Loss Costs data, and the other, again, is that Xactware business, if I have it right. Obviously, insurance adopts technology in a deliberate way. Is that what you are seeing play out with your MCP connectors as well? Or, has that been a little faster? Has that been in any way different than what you have seen in the Xactware piece?
Yeah, I think on the carrier side, yes, it is on the similar cycles of that. There is a lot of interest and some adoption on the MCP connectors. Right now, today, those are MCP connectors on Claude. It is not exclusive to Anthropic, so we can launch other connectors in the future with other large language model companies. A customer needs to be already a customer of Verisk as well as a customer of Anthropic in order to begin using the connectors.
Understood. And maybe just thinking through how you have distributed your data historically, can you refresh us how to think about your historical distribution channels, and how does Verisk data distribution change in the age of AI?
Yeah. If you want to go back to historical distribution channels, the Forms, Rules, and Loss Costs used to be mailed to our customers in a stack of paper circulars. That was how we started. Obviously, more recently it was downloadable PDFs. There was still a surprising amount of manual workflow that took place on our customer's side between downloading a PDF, looking at the loss table, and then potentially manually keying that into their own internal systems or their policy administration systems. Our goal is to distribute in however a customer wants to take it. And believe it or not, there are plenty of customers that still access our content by downloading PDFs. That will continue to change over time. For those who have the appetite for it, obviously, a better 2020s way is to provide the data through APIs.
They could also get it through We have connectors built through most policy administration systems so that they can access it directly through a Guidewire, a Duck Creek, or many of the other policy administration systems that they may have in place. There are many that build their own connections. And then, of course, in today's world, connectors may be the latest way to access the data. Eventually, we are doing some trials where we are building agents built based on our data, and that may be a way for our customers to interact with our content.
And I know that a core part of your Core Lines Reimagine program was making sure you were distributing the data in the most modern way that your clients wanted so that they could get rid of any associated tech debt because the spending on ingesting your data has always sort of been more than the spending on your data itself. So as you've entered the age of AI, which has made sort of in some ways reducing tech debt a much easier task, have you had to go back to the drawing board and say, "Hey, look, this was our roadmap with Core Lines Reimagine, but actually now, we're doing this thing instead or we're doing that thing instead." Had you guys had pretty good visibility that this was the road of travel maybe towards?
Yeah. I think we have pretty good visibility. I don't think it's instead of what we're doing with Core Lines Reimagine, I think it's in addition to and on top of. So maybe if I can jump off from that. As you were talking about distribution of content and we said downloading PDFs, part of Core Lines Reimagine and reinvesting in those Forms, Rules, and Loss Costs content has been about bringing the content together on a platform of core.verisk.com where they can get all of it together and get associated insights and analytics around it. All of our content will be available on core.verisk.com by the end of 2026, which essentially marks the completion of what was initially envisioned with Core Lines Reimagine.
I think on top of that is where we can begin to build other ways to access the data that they can use, whether it's API-led or whether it is AI-enabled. And maybe if I can also comment on this, our dialogue with our customers around the AI roadmap has been very active. They will have their own AI roadmaps, which is generally around workflow efficiency and how they manage their own workflow processes on the underwriting value chain, on the claims process workflow. Verisk has always been fairly workflow agnostic, given that it's so different across all the carriers. And our value is that we bring our data and content to bear for the customer at their points of mission-critical questions. The mission-critical questions being: Should I write this policy or not? What are the risks associated with this policy?
What is the actuarial expected loss cost of this policy? What am I taking on? How does this fit with the rest of my portfolio? On the claim side, is there likely to be fraud associated with this claim or not? Those are each points and questions that they will come to us, regardless of whether they have manual tasks that get them to that process or even in an agentic world, they will still need to answer those questions, and we largely believe to use our data and content to answer those questions. So that's why the AI dialogue with the customers is, whether or not they are rebuilding their own workflow from an AI standpoint, the conversation they're having with us is how can that AI-based workflow interact with your content in an efficient way.
And we've heard a lot of talk lately about token costs, right? And we've heard examples of software businesses that had a stark change in their economics as they ratcheted up the amount of AI that was available to their clients. In your instance, walk us through how both those branded products like XactAI, but also the cloud-enabled products, what does the tokenomics of those products look like?
Yeah. Tokenomics on the different products will vary according to the pricing model of those products, which is going to vary as to what fits the market best. For the connectors, we do not bear the token cost. The client does. I said the client had to have an Anthropic subscription as well as a Verisk subscription, so they handle that separately. That doesn't impact us or our cost base. On the XactAI side, yes, there's a license price for that product that, yes, should cover the token cost, and if that changes, then ultimately the license cost might potentially have to change.
Got it. But I don't think we need to worry about the insurance industry token maxing particularly. Is that
Yeah, that hasn't been their opportunity so far or their experience so far. I think nonetheless, whether they are at max or not, so to speak, and maxing, they are absolutely, like every other industry, looking to ensure that they have the best ROI for what they are spending on insurance, and we intend to be a partner in that discussion.
Understood. Let's maybe shift gears to capital allocation. Verisk has this nice model of pretty fairly consistent 6%-8% with margin expansion on top of that, driving good double-digit EPS growth. You recently introduced a target to return 75%+ of free cash flow to shareholders. I recognize there's some fluidity around these discussions, but you also recently had a large acquisition that, or a mid-size acquisition, let's say, whose status has changed. It was on and now it was off, and now it might be back on again. Just walk investors through maybe what they should know about that AccuLynx situation and what impacts that would or wouldn't have on your capital return framework.
Yeah. On the AccuLynx acquisition specifically, it was an acquisition that was signed just over a year ago in late July. For a number of reasons, it was terminated at the end of 2025. There is now active litigation around that termination. I won't give a lot of comment on that other than to say it's under appeal at the moment. It is being handled on an expedited basis as litigation goes. The timeline, we do expect on the order of months to have some visibility into outcomes there. As to our overall capital allocation, first beginning with the generation of our very strong free cash flow, and then looking to invest in our business organically, and with acquisitions. Probably at the moment, focused more on tuck-in size acquisitions. Then returning capital to shareholders in the form of dividend and share repurchases.
Yes, with that commitment of over 75% of free cash flow on an ongoing basis, given the strength of our investment grade balance sheet and our 2x-3x debt-to-EBITDA range, which even today, we're in the middle of that at around 2.5x debt-to-EBITDA. We have significant balance sheet capacity to fund whatever tuck-in acquisitions we may be interested in.
Yeah, but that would include if this were to go a certain way, that framework would not be materially disrupted by this acquisition.
Yeah. If the situation were to be that we were going to end up proceeding with the AccuLynx acquisition, number one, we would have the capacity to do that on an all-cash basis. Probably in the immediate aftermath of that would temporarily pause the 75% of free cash flow return to shareholders. But I think we would relatively quickly de-lever and be able to return to that position.
Got it. That is very helpful. One thing that is I would say unique to Verisk, or appreciated by the longtime owners of the company in public markets has been your yearly, your CEO's focus on return on invested capital. We like to look at how these are structured and designed and measured by your board. About a year or two ago, they switched from measuring your performance on an incremental ROIC basis to an absolute ROIC basis. I know that feels like it is in the weeds, but ROIC is very much in focus for you guys. So maybe you can touch a bit on that transition from that incremental measure to the absolute measure. The target for you guys is an impressive 25%, I think is the target number in the proxy.
Maybe you can just lay out for us what prompted that change and how you guys are thinking about ROIC at this juncture in the business?
Yeah. ROIC is very important for us. Holding ourselves accountable to what returns we are driving on capital is absolutely, we think, one of the things we should be held accountable to, whether it is organic investments or inorganic investments. Our board has supported that focus. Investors have supported that focus. The change from incremental ROIC to just absolute ROIC, was one that largely came actually in our discussions with shareholders. The feedback that we heard was, we like the incremental ROIC concept, but it is difficult to measure. There is complexity to it, and it is hard to compare across peers. As we looked at the peers and of course, with the compensation committee of our board and looking at metrics and stuff, there were not many others out there that had an incremental ROIC target.
For simplicity, as well as the fact that we were now kind of post the divestitures that we had talked about, the feedback was for simplicity to have the ROIC metric, which also is maybe more intuitive, both how you measure it and also what those numbers mean, like what good looks like. What it says about us is that we were just kind of open to that investor feedback and a more simple metric to continue to drive accountability.
Got it. Obviously the simplest way to hit that number is to grow organic revenues as fast as you can. The next way to hit that number is to continue your margin expansion, which obviously you did well on the last few years and have committed to progressing forward on that. Then another piece of that would be, of course, are you deploying capital towards M&A effectively? Are you reducing the amount of invested capital through buybacks? Maybe on that M&A piece again, talk about the inorganic opportunity in front of you. What do you look for in an acquisition? In the past you said, "Hey, look, we feel like there is a lot of opportunities right now." Are there a lot of opportunities right now?
Yeah. Within acquisitions, we said our priorities are roughly three priorities. One is proprietary data sets, and anything that would enhance our own proprietary data. Sorry, zero, I should have given zero, which is the filter of, is this relevant? Is this acquisition relevant to our insurance businesses or not? We are solely focused on the insurance industry. Within the insurance industry, priority one is proprietary data. Priority two is expanding the total addressable market, even within the insurance industry, whether that is geographic or maybe segments of the insurance industry that we had not addressed before, for, I do not know, excess and surplus would be an example. Then priority three is anything that can enhance the workflow or the efficiency or the use of our data for customers. So those are sort of the priorities within the insurance industry. We do see opportunity out there.
Not as much that is attractive from a scaled and transformative business, but we will always continue to look and stay active in the markets. It helps us stay sharp as to what is out there and what we should be keeping in mind for our own businesses.
Yeah. A perception that I've always had, and correct me if you think I'm wrong here, is that because you have these 98%, 99% retention rates in 100 of the top insurance providers, all 100 of the top insurance providers in the U.S. for P&C, is that you really have the platform to scale a solution that might be too early stage for another company to acquire. As long as it has product market fit and the bones of the acquisition are good, you don't need it to be a material revenue generator, be later in its maturity curve. You're willing to buy earlier stage companies. Is that a fair assessment, and is there any other thing we're missing in that assessment?
No, it absolutely is, and it has been one of the drivers of success for us. We talk about, for example, the life insurance business that we acquired when we kind of entered into the life insurance space, has been a software product that sells to life carriers. It was something in which we saw a great product and continues to be a great product. Their growth had been kind of mid-single digits when we acquired it. It has delivered strong double-digit growth every year thereafter, in part because of the customer footprint we are able to bring to the table. Even in the life insurance space where we hadn't historically had a presence, the Verisk name carries weight and as well as just the scale and investment grade balance sheet of a strong partner for the insurance industry, for the life insurance carriers.
Yes, we drive growth on acquisitions that way, and I would add, I think it is also an underrated strength in driving our strong returns on invested capital because even our organic investments, if we get a product right, if we get an investment right, we can scale it very rapidly across our footprint. I joke sometimes we don't need to go take a lot of people out to lunch to get to know Verisk and know who we are. We can bring them innovations right off the bat, which has helped us scale our innovations.
That's really fantastic. We've about 30 seconds left, so maybe I'll end it with this question, open-ended. But Elizabeth, when we have you here in this room again next year, what is one thing investors are not asking you about now or aren't talking about with respect to Verisk now, that will be highly relevant to this room next year?
Great question. I think you are asking the question now, but I think a year from now, I am really excited about what traction and further updates we can give on some of our AI product developments and starting to see the adoption more broadly across the industry.
Great. Thank you so much for your time today.
Yeah. Thanks a bunch. Great to see you. Thanks for the attention.