Verisk, a global data analytics and technology provider, has reported an increase in its consolidated and organic constant currency (OCC) revenues in Q4’23, primarily due to solid growth in underwriting and more moderate growth in claims.
Consolidated revenues were $677.2 million, up 7.4% and up 6.0% on an OCC basis for the fourth quarter. Prior year results included storm-related revenue associated with Hurricane Ian, which negatively impacted OCC growth by 90 basis points.
For the full year 2023, consolidated revenues were $2,681.4 million, up 7.4% and up 8.7% on an OCC basis.
Underwriting revenues increased 7.8% in the quarter and 7.3% on an OCC basis, as it reached $1,892.7 million, primarily resulting from solid growth across forms, rules, and loss costs, underwriting data and analytic solutions, extreme event solutions, and life insurance solutions.
At the same time, claims revenues grew 6.6% in the quarter and 2.8% on an OCC basis. The year-over-year increase in revenues was driven by growth in anti-fraud, casualty, and international. Storm-related revenue from the prior year negatively impacted OCC revenue growth by 320 basis points.
Moreover, there was no Energy and Specialized Markets segment revenue in the quarter. Verisk stated, saying: “We closed on the sale of the Energy business on February 1, 2023, and accounted for it as discontinued operations. We closed on the sale of 3E on March 11, 2022.”
“There was no Financial Services segment revenue in the quarter as we closed the sale of Verisk Financial Services on April 8, 2022.”
During fourth-quarter 2023, income from continuing operations was $182.3 million, a decrease of 15.5%.
Verisk noted that the decrease in income was primarily due to a $19.0 million litigation reserve expense in the fourth quarter of 2023 associated with an indemnification for an ongoing inquiry related to our former Financial Services segment, a one-time tax benefit of approximately $30.3 million in the fourth quarter of 2022, and higher depreciation expense in the fourth quarter of 2023 associated with the timing of certain large internally developed projects that were completed and placed into service during the year.
Adjusted EBITDA increased 9.0%, and 6.5% on an OCC basis, primarily due to strong revenue growth and cost discipline.
For 2023, income from continuing operations was $768.4 million, down 26.3%, while adjusted EBITDA was $1,433.5 million, up 11.6%, and up 11.5% on an OCC basis, reflecting strong revenue growth and cost discipline.
“Verisk’s 2023 performance exceeded the expectations we set at Investor Day and demonstrated our potential as an insurance-focused organisation. We achieved these results while implementing strategic, organisational, and cultural change, said Lee Shavel, president and CEO, Verisk.
“As we look ahead, our improved engagement with clients and ability to act on a more coordinated basis has expanded opportunities to invest in new innovations and technologies that deliver value to the industry and support growth and returns for Verisk shareholders.”
“Verisk delivered solid fourth quarter 2023 results marked by 6.0% OCC revenue growth, 6.5% OCC adjusted EBITDA growth and continued margin expansion. This capped off an excellent 2023 where revenue and adjusted EBITDA growth exceeded our long-term targets, said Elizabeth Mann, CFO, Verisk.
“As we look to 2024, we have confidence in our ability to achieve consistent and predictable growth, margin expansion and strong free cash flow generation. We will continue to allocate our free cash flow toward investments in order to deliver on our growth strategy while leaning into our cost discipline to achieve our efficiency commitments.”
