Verisk Analytics: Pricing Upside and Resilient Demand Amid P&C Insurance Industry Profitability Woes

We maintain our $220 fair value estimate for wide-moat Verisk Analytics following healthy third-quarter 2023 results that track our full-year top-line growth and profitability expectations. The U.S. P&C insurance industry is facing profitability pressure amid inflation headwinds and higher insurance losses, however, demand for most of Verisk’s solutions remains robust. We believe this reflects the mission-critical and defensive nature of Verisk’s data and analytics capabilities that are integral for optimal underwriting and claim assessment outcomes. As insurers look to improve internal efficiencies and offset hefty insurance losses, we view Verisk as well placed to benefit from accelerated digitization tailwinds. At current prices, Verisk shares trade in line with our unchanged fair value estimate.