Verisk Analytics

On Aug. 7, 2026, Reuters reported that a Delaware judge ordered Verisk to try and complete its planned $2.35 billion acquisition of roofing software maker AccuLynx. On Aug. 10, Verisk announced that it strongly disagreed and may appeal. Shares dropped 7% on intraday trading.

Why it matters: Verisk announced it would acquire AccuLynx, a software-as-a-service platform focused on roofing contractors, on July 30, 2025. Amid antitrust scrutiny and falling valuations for SaaS companies due to AI disruption fears, Verisk walked away from the deal Dec. 29, 2025. We believe that if AccuLynx were acquired today, it would likely fetch a lower valuation. With the caveat that we are not lawyers, we note that there are precedents for acquirers being forced to complete acquisitions they walked away from. We believe it is certainly possible that Verisk will not be successful with an appeal. It may also choose to settle the matter. After walking away from the deal, Verisk levered up to repurchase shares. As such, acquiring the firm could put its debt/EBITDA ratio in the 3.5-3.6 range by our math, above its current 2.5 times level and general target of 2-3 times. This could result in its current investment-grade credit rating being downgraded.

The bottom line: We do not expect to materially alter our $220 fair value estimate on wide-moat Verisk. At $2.35 billion, the deal is less than 10% of Verisk’s enterprise value.

Our $220 per-share fair value estimate on Verisk’s shares is based on our discounted cash flow model but equates to about 29 times what we expect Verisk to earn in 2026 and 25 times what we expect them to earn in 2027. We note this is below the three-year average of 35 times, which we attribute to investors being insensitive to valuation in 2024 and 2025.

Considering the fundamental drivers of Verisk’s performance, we expect organic revenue growth of around 6.0% to 6.5% annually over the next five years. This is consistent with long-term trends: between 2006 and 2025, the firm’s organic growth in its core insurance business averaged 6.9%, with a range of 3.4%-8.8% and a standard deviation of 1.2%. This indicates a relatively mild range of outcomes, attributable in no small part to a mature US P&C insurance industry. In our view, Verisk benefits from the fact that its solutions are mission-critical while accounting for only a small percentage of industry expenditures. By our calculations, Verisk’s total revenue accounts for just 0.33% of total P&C insurance costs industrywide (up from 0.30% in 2019), which we expect to expand to 0.36% by 2030.

Our revenue growth forecast is driven by growth in the P&C insurance market, pricing, and new solutions. Driven by rising nominal GDP and the need for more protection, the global P&C insurance industry is expected to grow by 4.5% annually until 2035, according to Allianz.

Given the high fixed costs of Verisk’s business model (about 55% of Verisk’s expenses are compensation-related) and limited incremental costs, Verisk has shown good operating leverage over the years and boasts EBITDA margins well over 50%. As expenses, which are mostly compensation costs, grow more slowly than revenue, we forecast adjusted EBITDA margins in 2030 at 60%, up from 56% in 2020 and 47% in 2019. We think the firm has meaningful runway to leverage lower-cost locations for talent.

We assign Verisk a Morningstar Economic Moat Rating of wide, based on intangible assets, network effects, and switching costs. We believe the firm’s intangible assets stem from the proprietary data it collects from its insurance customers. As Verisk’s solutions are a benchmark for industry participants across a variety of use cases, we believe the business also benefits from network effects. Finally, given Verisk’s role as an industry standard and the highly regulated nature of the insurance market, we believe its clients face meaningful switching costs.

Verisk has valuable intangible assets, as it sources data primarily through a contributory consortium model, whereby it collects data from its customers and sells solutions based on that data, much like credit bureaus. P&C insurance industry participants are willing to share valuable, proprietary data at little or no cost to Verisk in exchange for improved analytics and insights from aggregated industry data, such as better underwriting outcomes.

Supporting this, Verisk’s 2025 10-K notes that it is “rare that contributors elect not to continue providing us with all or a substantial portion of their data.”

Verisk data is often more accurate for insurers than internal projections alone and is important for benchmarking. We note that Global Indemnity Group, which owns Penn-America, states in its company filings that “the company typically references actuarial loss costs provided by (Verisk’s) Insurance Services Office as a baseline for pricing across most products.” In effect, better data access through the Verisk-intermediated consortium enables underwriting that P&C insurers would otherwise be unable to produce with their own, more-limited datasets.

Verisk’s database includes data on 143 million residential properties and 16 million commercial properties. On the auto side, Verisk claims to have third-party and proprietary data on more than 275 million insured drivers and 280 million registered vehicles, with access to expansive industry databases of loss costs and claims. Verisk notes that nearly every property insurer in the US uses its evaluations of community firefighting capabilities to help determine fire insurance premiums. While Verisk faces competitors, such as RELX Group’s LexisNexis (primarily in auto), financial disclosures from P&C insurers indicate that Verisk's data is mission-critical to their insurance operations.

Verisk contributory data also helps clients combat insurance fraud. For example, if a policyholder has filed multiple property theft claims with previous insurers, the current insurer may find a new claim suspicious.

Highlighting this intangible asset of Verisk’s data are the firm’s insurance clients themselves. For example, homeowner insurer Slide in its 2025 Form S-1 notes that “should LexisNexis or Verisk refuse to license their proprietary information to us on the same terms that it offers to our competitors, we could be placed at a significant competitive disadvantage,” and that it believes “that there are currently adequate replacements for the third-party technology and intellectual property we presently use other than proprietary information provided by LexisNexis or Verisk.”

Verisk's fees are a small percentage of industry expenditures. By our math, Verisk’s total revenue is about 0.33% of total US P&C Insurance expenditures.

Regarding network effects, Verisk’s standards are embedded in the insurance industry as benchmarks. We see benchmark businesses as being defined by network effects, as displacing benchmarks requires coordination among multiple stakeholders. Verisk’s property claims service defines what a catastrophe is, whether an event is a single occurrence or multiple occurrences, and what aggregate catastrophe losses are. These definitions are not mere formalities; they are major factors in determining insurance payouts.

Verisk’s property estimating solutions business (Xactware and Xactimates) provides data, pricing, and workflow tools for building repair and reconstruction, and we see this business benefiting from network effects. Xactware is widely used by insurance companies, contractors, and restoration professionals because it standardizes communication among these groups. Verisk notes that more than 80% of insurance repair contractors and service providers in the US and Canada use its data. While not a legal requirement, insurers often strongly prefer adjusters and contractors who use Xactware and Xactimates.

Regarding switching costs, we see customers falling back on the “if it ain’t broke, don’t fix it” adage, and given the small amount of costs involved, there would be little upside for an insurer to switch agents. To this end, Verisk notes that “a substantial majority” of US P&C insurance providers use its statistical agent services to report to regulators.

As insurance is heavily regulated, insurers’ policy forms must be approved by state regulators. Verisk’s forms and insurance contracts, which include standardized coverage language, are litigation-tested and tailored to reflect judicial interpretations. Switching could lead to suboptimal underwriting outcomes (including potentially costly litigation).

Verisk’s extreme-event solutions, which account for 13% of its 2025 revenue, provide probabilistic modeling for insurers, reinsurers, intermediaries, financial institutions, and governments. We see this business as an application that sits on top of its proprietary data. Although this business has competitors such as Moody’s RMS, we believe clients do not switch models lightly, given the integration of catastrophe models into insurance underwriting and the technical expertise and time required. Verisk, in its 2023 investor day presentation, noted a retention rate over 95% for this business.

After divesting its noninsurance businesses, Verisk is more focused than ever, and its mission-critical data may lead to better-than-expected pricing power.

An increasing number of extreme weather events could result in higher growth for its extreme events solutions business.

Verisk’s business is heavily tied to the US P&C insurance industry. Adjacent markets, such as US life insurance and non-US P&C, leave the firm with a meaningful opportunity to expand its addressable market.

The rise of generative AI could make it easier for clients to build their own software solutions and for competitors to build competing products.

Verisk’s data is sourced from its consortium of insurers. While unlikely, if this data were withheld or if insurers decide to contribute to other repositories, Verisk could be materially affected.

A large acquisition could distract management, and Verisk’s past divestitures indicate that the firm’s acquisitions did not pan out as intended.