Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| The combination of our focused business model, deep customer relationships and strategy to deliver value for clients through improved decision-making and operational efficiency is a formula that will also deliver value to our shareholders through growth and returns |
| On guidance, we are pleased to deliver our expectations for 2024 with growth and margins in line with our Investor Day target and they build upon the exceptional performance we delivered in 2023 |
| Elizabeth will provide the financial detail but in summary, we delivered 8.7% organic constant currency revenue growth in 2023, the strongest performance on record since our initial public offering back in 2009 |
| The transaction revenue is -- well, first of all it's coming off a full year of very strong transactional growth, double digit I think for the prior four quarters |
| We combine this with double-digit organic constant currency adjusted EBITDA growth and 150 basis points of margin expansion on an Insurance-only basis, achieving the low end of the initial margin improvement goal of 300 basis points one year earlier than our original target of 2024 |
| So we are excited about the free cash flow generation of the business |
| We'll have to look with you at that stat on free cash flow yield because we think the Insurance business has very strong free cash flow |
| This also served to substantially improve our capital efficiency, and boost our returns on invested capital |
| And while our strong 2023 revenue growth was exceptional, the long-term opportunity of addressing our clients' most pressing needs, gives me confidence in our strategy to drive consistent and predictable growth in 2024 and beyond |
| They've achieved strong results in 2023 |
| And so, that's an area where we expect that we'll be able to do a better job as well |
| On the more positive end, carriers are having success raising rates and driving premium growth and are taking the very early steps in certain lines to unwind restrictions on writing new business, as they achieve rate adequacy |
| And we believe that that will improve our retention and make certain that they are focused on the opportunities that generate the most value for us |
| And there in our extreme events business, the migration to more of a SaaS model, we believe opens up opportunity to deliver more value to that segment of our clients as well |
| We are really encouraged by the client feedback around these innovations and our customers are excited to see these come to fruition |
| And as the program naturally moves towards client deliverables in 2024, our customers will see additional value from benefits of our modernization of our internal systems, which will allow them to have faster access to our analytics, new analytics and insights like our executive industry insights that will be brought into the buy lines of business will provide benchmark analytics to our customers, new innovation around our forms management platform, which will make it easier for our customers to manage and track changes to our core programs, and finally continued migration of our contents to the new platform |
| So, overall, we feel really good about where we are with the reimagine program and the progress the team has made |
| I think first off, all of our businesses are clearly generating strong organic growth delivering value to the industry |
| We're doing that while still delivering 100 basis points of margin expansion |
| And that is a positive tailwind in that scenario |
| Growth for the full year was broad-based with almost all businesses delivering better-than-expected results |
| But as many of you know, we've been really thrilled about the success that we've had with our fast businesses application of low and no-code technology to the Life Insurance business |
| So building on our 2023 momentum let me just highlight our strong levels of client engagement and ecosystem partner-driven innovations and co-creation that led to the productization of a couple of solutions |
| Both clients and partners expressed enthusiasm for our delivery of improved connectivity and efficiency, demonstrating the network potential of this business |
| Adjusted for non-operating items as defined in the non-GAAP financial measures section of our press release, our operating results demonstrated solid growth for most of our businesses |
| This builds on a successful pilot in 2023, which traded over $400 million in premium and is a gratifying endorsement by a world-leading insurance broker that should draw more participation onto a data-first platform that will drive greater efficiency for the market |
| And we have been able to realize stronger pricing momentum than we had originally anticipated which we feel good about as we continue to deliver more functionality through that platform |
| I am pleased to share that Verisk delivered a solid fourth quarter capping off an outstanding 2023 |
| I am pleased to be here today to recap what was an exceptional year for Verisk, marked by strategic, organizational and cultural change matched with outstanding financial performance and value creation for clients and shareholders alike |
| That said, 2023 was a record year for Verisk, with total OCC revenue growth of 8.7%, driven by strong growth of 8.5% in underwriting and 9.3% in claims |
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| To some extent, profitability challenges in the industry were the result of higher catastrophe-related losses |
| On the marketing side as we've called out in the year -- carriers and being challenged and still trying to achieve profitable growth has not yet turned on their marketing spend |
| Adjusted net income decreased 9.3% to $204 million and diluted adjusted EPS decreased 2.1% to $1.40 for the fourth quarter |
| Income from continuing operations was $182 million, down 15.5% versus the prior year, while diluted GAAP earnings per share from continuing operations were $1.25, down 8.8% versus the prior year |
| This was offset in part by margin pressure from higher incentive compensation, acquisitions and organic investments for future growth |
| This caused AM Best to downgrade their outlook for the homeowners line from stable to negative, while also maintaining their negative outlook on personal auto |
| As we look at our internal data and also external shopping data we see a slight slowdown in Q4 from the shopping activity |
| These strengths were offset in part by continued weakness within Verisk Marketing Solutions and a more normalized level of attrition across the business, including some reduction in the level of contractor activity, due to the weather and some pressure within our Insurtech customer segment |
| This is being compounded by the fact, that the industry also faces technological debt and aging legacy systems |
| That said, the fourth quarter of 2023 was a relatively quiet period with only seven events, and was lower than the fourth quarter of 2022, which experienced 13 events |
| Insurance carriers continue to deal, with cyclical challenges on profitability resulting from higher losses and the lagging effects of inflation, by restricting new business in profit-challenged markets |
| Additionally, elevated depreciation and amortization expenses in the fourth quarter of 2023, resulting from the completion and implementation of certain large internally developed software projects during the year, also contributed to the decrease |
| More structurally, the insurance industry continues to be challenged by the rapid pace of technological change including, digitalization and cloud migration |
| Additionally, we did begin to overlap tougher comparisons in many of our businesses |
| And when you look at it month-over-month you see a slight slowdown from October, November, December |
| And so we may have periods of higher level of CapEx investment that may bring the overall free cash flow growth down |
| We expect that slowdown to continue |
| There were three headwinds that were called out |
| So that as their profitability grows and that may be separate and unconnected to just broader economic cyclicality, which is relatively muted |
| That was actually offset by some headwinds in our anti-fraud business, as they converted transactional customers to subscription customers |
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