Verisk Analytics (VRSK) Q2 FY26 earnings call: guidance and Q&A

How does Verisk's growth typically play out in soft markets, given decelerating pricing dynamics but potential for cross-sell and new product launches?

Lee Shavel stated that in soft markets, Verisk's organic constant currency growth rate has historically been approximately 6.8%, well within their Investor Day targets. He emphasized that the value of Verisk's data and AI-driven solutions becomes even more critical for clients in such periods, supporting good pricing decisions and driving value through new offerings like Premium Audit AI and Exact AI.

“our experience has been in soft markets that we've generally grown at approximately 6.8% organic constant currency growth rate. And again, hard markets 7.3%. So both of those are well within the range that we are -- that we talk about -- that we talked about at Investor Day.”

asked by Toni Kaplan · answered by Lee Shavel

Does the full-year revenue guide assume a low or typical level of hurricane activity, and are clients asking about El Nino preparedness?

Elizabeth Mann confirmed that the guidance range assumes an average year of weather activity. She noted that a lighter hurricane season could pose a risk to transactional revenue. Lee Shavel added that their catastrophe and risk modeling team is engaging with clients on El Nino impacts, and the recent acquisition of McKenzie Intelligence Services will help provide real-time insights.

“Our guidance, as we typically do, the range still considers in the base case and average year of weather activity and of hurricane activity. So what we're highlighting is if that plays out to be lighter as again, and there's different views from the experts as to how it may play out this year. But playing out lighter would be a bit of a risk on the transactional side.”

asked by Andrew Steinerman · answered by Elizabeth Mann

How is Verisk thinking about its channel partner strategy with AI companies, including potential model co-development, and are there specific areas of interest?

Lee Shavel stated that Verisk is engaged with all significant frontier model companies. He highlighted the Claude MCP connectors as a starting point, demonstrating the value of their data with natural language capabilities. He emphasized Verisk's role in providing distribution to the insurance industry and connecting models to workflows, strengthening their position in helping clients and model companies.

“our ability to provide distribution to the insurance industry as the last mile, particularly to workflows is a very important part of dimension. Our connectivity to claims professionals, underwriting professionals, risk professionals, it gives us an ability to identify where those models can be best applied, most effectively applied in order to generate real returns to our clients.”

asked by Kelsey Zhu · answered by Lee Shavel

Are customers shifting attitudes towards LLM access, and how is Verisk preserving its unique data assets amid AI proliferation?

Lee Shavel reiterated that data security is central to Verisk's DNA. He confirmed that in their work with frontier model companies, data use is controlled within the client's instance and cannot be used for model training. He noted that clients are interested in applying AI to data sets for underwriting/claims, and Verisk is facilitating this through a safe and carefully thought-out process, viewing it as a positive development.

“in our work with the Frontier model companies, it was absolutely critical that the use of the data was controlled in the client's Claude instance and could not be used to train models. That's a protection that we think is important for our clients, certainly important in protecting our overall data access.”

asked by Charles Peters · answered by Lee Shavel

How is Verisk monetizing AI today, specifically regarding the MCP Connector and Exact AI, and how should their growth contributions be thought of over time?

Lee Shavel explained that AI monetization is evolving. Immediate channels include improving the value of pricing renewals for subscriptions, as seen with Premium Audit AI. Additional channels may involve transactional pricing for new AI applications, potentially migrating to subscription models. Thirdly, license fees for agentic AI platforms or software solutions could generate revenue. He expressed increased confidence in AI as a clear upside for Verisk over the next several years.

“We've talked a little bit about the -- our ability to do that in our underwriting data on renewals specifically to the premium audit product. Similarly, in our Exact AI licenses, we are expecting to be able to capture the incremental value that we're delivering there through these additional products on that front.”

asked by Manav Patnaik · answered by Lee Shavel

Has the trend of elongated sales cycles due to AI shifted, and is there a risk of clients moving processes in-house by developing their own industry-specific LLMs?

Elizabeth Mann stated that elongated sales cycles remain consistent due to client focus on data usage rights and protection. Lee Shavel addressed the risk of in-house LLMs, stating that Verisk's unique, standardized data sets remain relevant for clients developing their own models. He views this as a positive development, as more sophisticated clients tend to consume more data from Verisk.

“our general experience is the more sophisticated our clients are from a technology and data standpoint, the more data that they consume, the broader relationship that we have.”

asked by Ashish Sabadra · answered by Lee Shavel