Verisk Analytics draws bullish buying case as valuation drops on growth concerns

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Verisk Analytics bullish case

Highlights

Verisk Analytics shares have dropped about 21% year-to-date and 34% over 12 months, pushing valuation from a typical 20–25x to about 15x forward EV/EBITDA.
Client retention exceeds 95%, with over 80% of revenue from recurring subscriptions and more than 90% tied to unique data or IP, underscoring defensible business fundamentals.
Revenue growth has slowed from a historical 8% to 5–6% recently, attributed to temporary factors like low severe weather and minor government contract issues.

Valuation reset and business fundamentals

As first reported by CNBC, investor Sarat Sethi is increasing his position in Verisk Analytics as the stock sells off despite what he describes as a stronger underlying business than the market implies. He says he has owned a starter position for some time and has become more aggressive as the shares decline.

Verisk, based in Jersey City, traces its roots to 1971, when a group of U.S. property and casualty insurers formed a data-sharing effort for regulatory reporting. The company now provides data analytics and software used in underwriting and claims, helping insurers price policies, assess risk, estimate property damage and detect fraud.

The company’s data and software are presented as difficult to replicate, with more than 80% of revenue coming from recurring subscriptions and EBITDA margins above 50%. After divesting non-insurance operations beginning in 2022 and appointing Lee Shavel as chief executive, Verisk has emerged as a more focused insurance business, with Shavel’s finance and strategy background seen as supportive of that transition.

AI concerns and insurance sector dependence

Investor concern has centered on slower growth and the risk that AI could weaken Verisk’s competitive position, but the bullish case argues that insurers still depend heavily on the company’s proprietary data. Its customer base includes the top 100 U.S. property and casualty insurers and 18 of the top 25 global reinsurers, while annual revenue of about $3.1 billion remains small relative to the insurance premiums its clients collect.

Client retention is above 95%, reinforcing the argument that Verisk’s products remain integral to insurer operations. The insurance business has historically grown revenue by about 8% annually, though that pace has slowed to roughly 5% to 6% over the past year.

More than 90% of revenue is tied to unique data and proprietary intellectual property, while the company is also developing AI tools for customers. The recent slowdown is described as temporary, linked partly to unusually low severe weather activity and smaller issues tied to government contract work and auto claims, with the contract business accounting for less than 1% of revenue.

Shares are down about 21% this year and 34% over the past 12 months, leaving valuation well below the levels at which the refocused company has generally traded since 2022. From 2022 through mid-2025, the business typically traded at 20 to 25 times forward enterprise value to EBITDA, compared with roughly 15 times now, supporting the view that the stock offers a discounted entry point if growth improves again.

Our earlier article covered rising regulatory scrutiny of insurers’ exposure to private credit and affiliated investments, as policymakers questioned whether oversight is keeping pace with increasingly complex investment structures. It highlighted concerns about the rapid growth of private credit holdings on insurers’ balance sheets, including risks around illiquidity, valuation, and insurers’ ability to meet claims if market stress hits.

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