Verisk Analytics, Inc. All rights reserved. Verisk Analytics Investor Day December 1, 2015
Verisk Analytics, Inc. All rights reserved.
Verisk Analytics Investor Day December 1, 2015
Verisk Analytics, Inc. All rights reserved.
Verisk Analytics Investor Day
December 1, 2015
Verisk Analytics, Inc. All rights reserved.
Strategy
Scott Stephenson, CEO
Verisk Analytics, Inc. All rights reserved.
Forward-Looking Statements
This presentation contains forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “target,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors that are, in some cases, beyond our control and that could materially affect actual results, levels of activity, performance, or achievements. Other factors that could materially affect actual results, levels of activity, performance, or achievements can be found in Verisk’s quarterly reports on Form 10-Q, annual reports on Form 10-K, and current reports on Form 8-K filed with the Securities and Exchange Commission. If any of these risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what we projected. Any forward-looking statement in this presentation reflects our current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to our operations, results of operations, growth strategy, and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise.
Notes Regarding the Use of Non-GAAP Financial Measures
The company has provided certain non-GAAP financial information as supplemental information regarding its operating results. These measures are not in accordance with, or an alternative for, GAAP and may be different from non-GAAP measures reported by other companies. The company believes that its presentation of non-GAAP measures, such as EBITDA, EBITDA margin and adjusted EBITDA, adjusted net income, and adjusted EPS, provides useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations. In addition, the company’s management uses these measures for reviewing the financial results of the company and for budgeting and planning purposes.
3
Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures
Verisk Analytics, Inc. All rights reserved. 4
How Do We Achieve Leading End-Market Positions?
The Four Distinctives in The Verisk Way
Unique Data Assets
Deep Domain Expertise
First-Mover Advantage
Embedded in Customer Workflows
Verisk Analytics, Inc. All rights reserved.
Stronger and Larger Company
5
The Verisk Formula
Steadily Growing Businesses Powered by Innovation, with Expanding Margins and Low Capital
Intensity
Newly Acquired Businesses at
Reasonable Prices with Similar
Characteristics
Increasing Financial Capacity
Verisk Analytics, Inc. All rights reserved. 6
The Verisk Formula (continued)
We can continue to drive strong organic growth
• Stay close to our distinctives
• Moderate levels of transactions and services
• Innovate effectively• Globalize effectively• Expand channels
Balanced expectations for M&A spend
Strong balance sheet• Committed to 2.5x
leverage by end 2016• Maintain investment
grade
Return capital to shareholders
Verisk Analytics, Inc. All rights reserved. 7
Verisk Strength Built on P&C foundation
• Unique data sets, enhanced over time, have enabled growth into more decision processes at our customers
− Since 1971, our P&C business has served as the industry standard
− Leveraging long-standing relationships with innovation and new solutions has enabled strong growth: 7.2% over past 5 years
• Template for how we develop new verticals at Verisk− First mover creates competitive advantage
− Become the “must-have” solutions for clients to make strategic decisions about their day-to-day business
− Build once, sell many times
• Financial model for P&C solutions sets the standard− High percentage of subscription revenue
− Limited customer concentration
− Scalable with low capex requirements
Verisk Analytics, Inc. All rights reserved.
Verisk is Stronger with WoodMac
Develop a common database and GIS
platforms, in partnership with the JDE, leading to innovative new
offerings
Repackage andrepurpose Wood Mackenzie content for the insurance
sector
Focus on cross-selling of current content between Wood Mackenzie and Maplecroft
Leverage Wood Mackenzie footprint to help internationalize
Verisk
Use of aerial imagery to enhance analysis across current and
new content
Combined Growth
Opportunities
• Cross-sell• New geographic footprint and offering opportunities
Develop integrated supply chain solution
across Verisk verticals
8
Verisk Analytics, Inc. All rights reserved.
Core Competencies
9
Original (ISO) Core A Different World Current and Future Verisk Core
Actuarial analysis
Regulatory process (insurance)
Templated data collection and management
Circulars and tabular output
Explosion in data volume Large-scale data integration
Multi-tier, multi-spectral imaging
Visualization and consumability with emphasis on geo-location
Stochastic methods leading to prediction
Localization of solutions
High-speed networks
Compute power
Ubiquitous GPS
Automated interpretation of imagery
Too much data, too little insight
Globalization
New form competitors
Verisk Analytics, Inc. All rights reserved.
Large-Scale
Data Integration
Multi-Tier, Multi-
Spectral Imaging
Consumability and
Geo-Location
Stochastic
Modeling
Localization
Insurance
Banking/Marketing Effectiveness
Energy/Metals and Mining
Healthcare
10
Competencies by Vertical
Verisk Analytics, Inc. All rights reserved.
1. Large-Scale Data Integration
11
• Geo-location represents the largest degree of potential relatedness
• We are rethinking how we structure our data assets
Observations
• Opportunities exist within categories, e.g., insurance claims
• Analyzing individuals is mostly about insurance/financial overlaps; analyzing businesses spans all of what we do
Domain Data Category Number of Data Stores
Primary Unit of Observation
Other Units of Observation
Insurance Policy RecordsClaims RecordsProperty and Location AttributesBehavioral/Criminal RecordsForms and Regulations
2527884
PolicyClaims (estimates and actual fil
i
ngs )Property/Geo-locationIndividualBusiness (insurer)
Individual/Business, Property, Geo-locationIndividual/Business, Property, Geo-locationBusinessGeo-location, PropertyGeo-location
Financial Deposit Account Attributes
Credit Account AttributesRetail Payment/Deposit Transaction Details
223
Account
AccountTransaction
Individual, Business, Geo-location
Individual, Business, Geo-locationIndividual, Merchant/Business
Oil/Gas Oil/Gas Field AttributesMetal, Mineral, Mine AttributesEnergy Distribution Attributes
777
FieldField/MineFlow
Property/Geo-location, BusinessProperty/Geo-location, BusinessProduction Geo, Businesses, Regimes
Other Catastrophic/Geopolitical Event AttributesWeather and ClimateMaterials and SafetyTelematics
9531
Geo-locationGeo-locationMaterial DetailsTrip (in car)
Property, Businesses, IndividualsProperty, BusinessesProperty/Geo-location, BusinessIndividual/Business, Property, Geo-location
Verisk Analytics, Inc. All rights reserved. 12
2. Multi-Tier, Multi-Spectral Imaging
Nature of Data Potential Use Cases
Global25-50 cm resolution1-month revisitOrtho, multi-spectral
1. Addition of a swimming pool2. Measure corn health and recommend fertilizer
Metropolitan5-7 cm resolutionAnnual revisitStereo oblique, visible
1. Automatically identify roofs needing repair2. Automate the design of PV solar installations
Neighborhood<1 cm resolutionOn-demand revisitOblique, hyper-spectral
1. Monitor large commercial site construction2. Monitor encroachment into utility easements
Building<1 cm (gps limit)On-demand revisitExterior & interior; multi-spectral, thermal, laser
1. Crowdsource insurance inspections2. Quantify and map building interiors
for remodelers
Satellite
Aerial
Drone
Interior Sensing
Verisk Analytics, Inc. All rights reserved. 13
3. Consumability and Geo-Location
Verisk Analytics, Inc. All rights reserved.
Catastrophe Models Need to Simulate Thousands of Potential Hurricanes to Provide a View of Risk
14
4. Stochastic Modeling
Verisk Analytics, Inc. All rights reserved. 15
5. Localization
Major steps to make Xactimate useful in Australia:
Australia Pricing Research Data
• 14 databases (~4,000 person-hours)
Local Currency and Language Support
• Tweak translations and terminology
Australia Custom Product Features (minimum viable product)
• Tendering estimates out to supply chain
• Simplification
• Appointment management
• Claim-centric approach
Process Requirements – Behave More Like an Agile Startup
• Increased responsiveness to customer requests
• Faster implementation and onboarding
• Better customer tracking and billing management
Verisk Analytics, Inc. All rights reserved. 16
Infrastructure Enables Competencies
Competencies
Strategies
1. Large-scale data integration
2. Multi-tier, multi-spectral imaging
3. Comsumability and geo-location
4. Stochastic modeling5. Geographic localization
A. Technology and infrastructure
B. Analytic environment and resourcing
C. Regionalization
Verisk Analytics, Inc. All rights reserved. 17
Corporate Systems Client-Facing Delivery Systems
Back-End Data Management and Processing
• Systems providing general corporatewide functionality, e.g., HR workflow, GL, e-mail
• Will need to evaluate each individually, but generally the SaaS cloud model makes most sense
• Factors to consider
− Operational efficiencies− Economics− BU integration− Internal cultural bias
• Systems providing direct client access with responses and results back to clients
• Will need to work with BUs to determine efficacy, but generally the PaaS or IaaSmodel will make the most sense
• Factors to consider
− Evaluate dev/test/prod individually
− Reliability − Scalability − Economics− Internal cultural and
client bias
• Systems providing data management, including ingestion, ETL, prep, and staging
• Will need to work with BUs to determine efficacy, but generally the PaaS or IaaSmodel will make the most sense
• Factors to consider
− Evaluate dev/test/prod individually
− Reliability − Scalability − Economics− Internal cultural and
client bias
A. Technology and Infrastructure
Example: Cloud Strategy
Verisk Analytics, Inc. All rights reserved. 18
Multivariate regression trees and algorithms to estimate event likelihood
and cohort belonging. Serve as industrial workhorses!
B. Analytic Environment
Verisk Use Cases:
• Claims likelihood
• Consumer response propensity
• Behavioral segmentation
• Gas price estimation
Simulated Monte Carlo experiments for highly coupled nonlinear systems,
particularly with wide variability and high underlying betas.
Verisk Use Cases:
• Weather events (e.g., hurricane landfall)
• Failure rates (manufacturing)
• Bank portfolio stress test
Classical Regression & Segmentation Monte Carlo Stochastic Modeling
Verisk Analytics, Inc. All rights reserved. 19
B. Analytic Environment, continued
Verisk Use Cases:
• Dynamic fraud identification
• Image and facial recognition
• Voice and speech recognition
• Sentiment analysis
• Context analytics
• Multi-spectral imaging
Model high-level abstractions using multiple processing layers and complex
structures (e.g., Bayesian networks, deep machine learning, NLP).
Use of network and graph theory —characterizing networked structures in terms of nodes and the ties or edges
that connect them.
Verisk Use Cases:
• Predict influence of individuals and communities on their networks (customer interactions and analysis —ads, product choices, etc.)
• Organized/multiparty financial crime (money laundering, intelligence) and fraud (check-kiting, insurance claims)
Social Network Analysis (SNA)Machine Learning Methods
Verisk Analytics, Inc. All rights reserved. 20
C. Regionalization
Example: Possible Verisk Asia Pac Organization
KPIs from Verisk for Asia Pac
Verisk Asia Pac Chair
Shared ServicesBusiness Unit Team Members
(Asia Pac)M&A
e.g., Talent e.g., Facilities
Verisk Center Verisk BU
Verisk Analytics, Inc. All rights reserved.
“Big Five” Operational Priorities
21
Focused Attention on Cross-BU Opportunities
Strong Team/Talent
Robust Technical Environment
Deeper Customer Intimacy
Global Platform
Verisk Analytics, Inc. All rights reserved.
Technical Talent and Advanced Degrees Growing
22
DBA/Developer/Programmer — 79% increase
MBA — 45% increase
CAS Fellow — 71% increase
Master of Science — 55% increase
PhD — 15% increase
Verisk Analytics, Inc. All rights reserved. 23
Total Employees: 7,500 Q3 2015 YTD Revenue: $1.6B
Global Platform
Salt Lake City
Chicago Houston
Lima
Buenos Aires
Rio de Janeiro
Ohio
Columbia
Annapolis
Jersey City
New York
Boston
Quebec
Ontario
Edinburgh
Bath
Fleet
Tel Aviv
Abuja
Guildford
London
Copenhagen
Munich
Vienna
Moscow
Astana
Nepal
Dubai
Hyderabad
Johannesburg
PerthSydney
Brisbane
Jakarta
Tokyo
Beijing
Seoul
Singapore
Kuala Lumpur
Hong Kong
San Francisco
Calgary
Minneapolis
Carlsbad
Note: includes Wood Mackenzie revenue from January through September.
Verisk Analytics, Inc. All rights reserved. 24
Conclusion
The best benchmark for Verisk is Verisk.
Average1organic revenue growth over the past ten years
has been about 8%
• Our business is even better now than it was before• We should be able to grow over time and on average in a way
that is consistent with the past
We have expanded EBITDA margins 450bps to the high 40s, an industry leading level
• We will continue to invest in our business• There is natural scale in what we do even at the current strong
margin levels, as our incremental margins show
1Unweighted
Verisk Analytics, Inc. All rights reserved.Verisk Analytics, Inc. All rights reserved.
Questions
25
Verisk Analytics, Inc. All rights reserved.
Wood MackenzieAn Introduction by Stephen Halliday, CEO
Verisk Analytics, Inc. All rights reserved.
We enrich lives by empowering people with unique insight on the world’s natural
resources
Wood Mackenzie Mission Statement
27
Verisk Analytics, Inc. All rights reserved.
We have evolved over 40 years to become the leading provider of commercial intelligence in the natural resources sector
28
“Follow the molecule”
Verisk Analytics, Inc. All rights reserved. 29
Wood Mackenzie is a Verisk business with matching values
Verisk Distinctives
Subscription Revenue Model and High Customer Retention
Company-Specific Attributes
Track Record of Growth and Innovation
First-Mover Advantage
Unique Data Assets and Decision-Making Models
Embedded in Customer Workflows
Deep Domain Expertise
Global Business
Data & Analytics
Data-Rich Vertical
Verisk Analytics, Inc. All rights reserved.
Key Messages for Today
More than 40 years of history with a reputation for quality and strong customer relationships built on trust
30
Industries that are perfectly suited for data and analytics
Diversified across energy, chemicals, and metals & mining
Undermarketed and undersold
Multiple avenues for growth
Verisk and Wood Mackenzie are stronger together
Verisk Analytics, Inc. All rights reserved.
Wood MackenzieOil & Gas Industry—Engine of the World Economy
Verisk Analytics, Inc. All rights reserved.
Oil & Gas Industry—Engine of the World Economy
What drives the demand for oil and gas?
Where are the oil and gas reserves?
Who are the key stakeholders?
How does the industry work?
What are the key themes of today’s environment?
What sets the oil price?
32
Verisk Analytics, Inc. All rights reserved.
Underpins the way we live today
Energy to heat homes
Energy to power industry
Fuel to transport goods and
people
Raw materials for everyday
items
One of our most fascinating, hi-tech, and vital industries
• Cosmetics• Food• Medicine• Plastic• Gasoline • Clothing
33
Verisk Analytics, Inc. All rights reserved.
0%
1%
2%
3%
4%
5%
6%
0
1,000
2,000
3,000
4,000
5,000
6,000
Coal Oil Gas Nuclear Hydro Renew. OSF*
CA
GR
20
15
–2
03
5
Wo
rld
TP
ED
(M
toe
)
Global hydrocarbon fuels underpin global energy demand
World primary energy demand by fuel, 2015–2035
Source: Wood Mackenzie. *OSF = Other Solid Fuels
Renewables: Rapid growth from
low base
33%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Total
Wo
rld
TP
ED
(M
toe
)
CA
GR
20
15
–2
03
5
2015 2020 2025 2030 2035 CAGR 2015-2035
Coal overtakes oil in 2025
34
Gas fastest-growing
hydrocarbon
Verisk Analytics, Inc. All rights reserved.
Where are the oil and gas reserves?
Natural Gas
Oil
35Source: Wood Mackenzie
Verisk Analytics, Inc. All rights reserved.
OPEC and New Discoveries
Russia
US
Saudi
Arabia
IranIraq
Canada
Qatar
Venezuela
United
Arab
Emirates
China
Rest of the
World
Total remaining oil & gas reserves (1,535 bnboe*)
OPEC controls ~42%
OPEC members include Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and Venezuela.
36Source: Wood Mackenzie
0
10
20
30
40
50
60
2005 2007 2009 2011 2013
Dis
co
ve
red
Vo
lum
e (
bn
bo
e*)
South Iolotan
DW Brazil
East African gas
Discovered volumes over the last decade
*DW = Deepwater*bnboe = Billion barrels of oil equivalent
DW* Brazil
South Yoloten
Verisk Analytics, Inc. All rights reserved.
National oil companies control reserves, only the biggest international oil companies can compete
0
50
100
150
200
250
300
NIO
C
PD
VSA
Sa
ud
i Ara
mc
o
Qa
tar
Pe
t
Ga
zpro
m
Ro
sne
ft
Ira
q G
ov
t
Exx
on
Mo
bil
CN
PC
AD
NO
C
Sh
ell
Turk
me
ng
az
Ch
evro
n
Africa Asia Europe Latin America Middle East North America Oceania Russia & Caspian
Integrated
Supply chain
Financial institutions
Professional services
NOCs
Small caps
Mid caps
Large caps
Bn
bo
e*
N N
N
NN
NN
N NN
Global reserves held by company, split by region
N = national oil company (NOC)
37Source: Wood Mackenzie
*Bnboe = Billion barrels of oil equivalent
Verisk Analytics, Inc. All rights reserved.
0
10
20
30
40
50
60
70
80
90
100
110
120
0
40
80
120
160
200
240
280
2014
$/bbl Brent
2012 2013
Government Take US$bn
2011201020092008200720062005
Oil Price (Brent, Nominal)
Many economies around the world are dependent on oil and gas revenues (and price)
Saudi Arabia
Russia
Norway
38Source: Wood Mackenzie
Verisk Analytics, Inc. All rights reserved.
What sets the price of oil?
Select events affecting global oil prices
(Average monthly – Brent $/bbl)
Supply
&
Demand
Cost
Geo-politics
OPEC
Demand
Supply
Speculation/ Trading
Oil Price
Factors influencing oil price benchmarks
Source: Argus Media, Wood Mackenzie 39Source: Wood Mackenzie
0
20
40
60
80
100
120
140
Jan 16Jan 12Jan 08Jan 04Jan 00
Invasion of Iraq
Global Financial Crisis
AsiaGrowth
Arab Spring
OPEC–Market Share
Verisk Analytics, Inc. All rights reserved.
How does the industry work? The oil and gas value chain
Exploration Production
Upstream
Refining Marketing
Downstream
Midstream
“Global market for petroleum products”
Development
$472bn(1) $154bn(1) $52bn(1)
(1) Average annual investment 2000–2013 based on IEA Energy Investment Outlook, Year 2012 US$ 40
Verisk Analytics, Inc. All rights reserved.
0
10
20
30
40
50
60
70
80
90
100
Go
ve
rnm
en
t Ta
ke
%Africa Asia Pacific
Europe Latin America
Middle East North America
Russia & Caspian
Gaining access to O&G blocks/licenses
• Various routes to being awarded a block/license– Licensing rounds– Direct negotiations with
governments
– Invitations to tender
• Generally for exploration acreage, sometimes for developments
The larger and higher-quality resources have the highest
government take
Around 50,000 active blocks around the world
41Source: Wood Mackenzie
Verisk Analytics, Inc. All rights reserved.
Exploration and Appraisal (E&A)
Only around 1 in 5 wells make a commercial discovery
42
Oil
WaterRock grains
Oil
TrapReservoir
Verisk Analytics, Inc. All rights reserved.
Development
Discovery to project sanction takes an average of 8+ years
Concept generation
Concept screening & selection
Project sanction
Concept definition
43Source: Wood Mackenzie
Verisk Analytics, Inc. All rights reserved.
Some amazing innovation to develop increasingly difficult reserves...
R E S E R V O I R S
Empire State Building381m
0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.56.0 6.5 7.07.5 8.0 8.5 9.0 9.5 10.0
Maximum lateral reach at this depth
Source: Wood Mackenzie, Shell, The Economist 44
Verisk Analytics, Inc. All rights reserved.
…which has led to a high cost base for the industry
10
11
12
13
14
15
16
17
18
19
20
2008 2010 2012 2014
Ca
pe
x p
er
bo
eo
f p
rod
uc
tio
n (
rea
l te
rms)
Development costs per barrel by company type (US$ real)
0
5
10
15
20
25
30
2004 2006 2008 2010 2012 2014
Upstream industry development costs per barrel (US$ real)
NOC
IOC
0
10
20
30
40
50
60
70
80
90
100
0 100 300 600 900
Po
stta
xb
rea
ke
ve
ns
(US$
/bb
l)
Pre-FID investments (US$ billion)
Deepwater
LNG
Conventional
Cost curve pre-FID capex: (2015–2030)
45Source: Wood Mackenzie
Verisk Analytics, Inc. All rights reserved.
Production
0
50
100
150
200
250
300
350
400
450
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Brent field oil production (000 b/d)
0
500
1000
1500
2000
2500
3000
2019
2021
2023
2025
2027
2029
2031
2033
2035
2037
2039
2041
2043
2045
2047
2049
2051
2053
Zohr field gas production (mmcfd)
Typical production profiles
46Source: Wood Mackenzie
Production from ‘unconventionals’ is driving supply growth
90
50
110
120
60
80
70
130
100
40
0
30
20
10
+2%
Mill
ion
bo
ed
2004 2014 20142004
Coalbed methane Heavy oil
Deepwater
Conventional shelfTight gas Tight oil
Conventional onshore
Shale gas
LNG
GTL
Shale oil
Acid/sour gas
Oil sands
19%8%
Production Type
Total production 2004 vs 2014 % breakdown by theme 2004 vs ‘14 OPEC oil market share
47Source: Wood Mackenzie
OPEC
Non-OPEC
N. America
2008
2014
Verisk Analytics, Inc. All rights reserved.
Recent oil price decline results in upstream investment cuts, which lowers the oil supply outlook
Wood Mackenzie capex profile, global upstream spend
0
100
200
300
400
500
600
700
2012 2014 2016 2018 2020
Ca
pe
x (U
S$
bn
)
Pre oil price decline forecast
Onstream
NA Onshore
Under Development
Probable
5
6
7
8
01
/13
09
/13
05
/14
01
/15
09
/15
05
/16
01
/17
09
/17
Mill
ion
b/d
Onshore Lower 48
Forecast end-July 15
0
2
4
6
8
10
12
2015 2020 2025
Pre
-FID
Pro
du
ctio
n
(mb
d)
2014 forecast
current forecast
3 million b/d
Forecast change in supply following investment cuts
Onshore Lower 48
Pre-FID Project (non L-48)
48Source: Wood Mackenzie
Forecast end-July 15
Current Forecast
Verisk Analytics, Inc. All rights reserved.
0
2
4
6
8
10
12
Mill
ion
b/d
75
80
85
90
95
100
Mill
ion
b/d
Ongoing demand growth and production decline — higher cost new developments needed
2014 Demand
Supply Gap
Demand Growth
Existing Non-OPEC Supply
Onstream- Decline
Under Develop.
Other Sources
Pre-FID Projects and New US
Tight Oil Drilling
Non-OPEC Reserve
Growth + YTF
Call on OPEC
<$50
<$70
<$90
2014 – 20 Supply Gap
Supply gap >10m b/d develops (2014 – 2020)… …requiring a greater call on OPEC, tight oil drilling, and conventional oil projects
Source: Wood Mackenzie. YTF = Yet-to-Find 49
Verisk Analytics, Inc. All rights reserved.
Transportation
Massive-scale oil and LNG tankers and pipelines facilitate the global market
50
Verisk Analytics, Inc. All rights reserved.
Refining & Marketing
51
Conversion into finished products for distribution and consumption
Verisk Analytics, Inc. All rights reserved.
Summary
A vital, innovative, and dynamic industry—across the value chain
Demand for oil and gas will keep growing
Oil and gas found everywhere, but OPEC controls oil reserves
Capital-intensive industry—new developments are more challenging and more expensive
Production dynamics changing with emergence of “unconventionals”
Current oil price cycle removes supply from the market—new, higher-cost developments will be needed to meet growing demand
52
Verisk Analytics, Inc. All rights reserved.
Wood MackenzieOverview and Opportunity
Verisk Analytics, Inc. All rights reserved.
Wood Mackenzie: An Overview
54
Provide leading commercial
intelligence to the global
energy, chemicals, and metals & mining
industries
Industries are complex and
capital-intensive
Large and diverse addressable market
Multiple channels for growth
Undersold and undermarketed
Verisk and Wood Mackenzie stronger
together
Strong financial record
Subscription-based business with
industry-leading renewal rates
Diversified solution set and customer
base
Differentiated value proposition
built on proprietary information,
analysis, insight, and advice over
40 years
Embedded in customer workflows
High-performing workforce
What do we do? How do we win? How have we grown?
What will drive future growth?
Verisk Analytics, Inc. All rights reserved. 5555
We are the reference source for commercial intelligence across the natural resource value chain
Consistent and integrated view across commodities and the
value chain
Global coverage based onregional dynamics
Bottom-up approach combined with corporate/macro perspective
Commodities
Oil/oil products
Gas/LNG
Coal
Metals
Petro-chemicals
Find
Extract
Refine
Transport
End
market
MacroCorporate
GeographicAsset
Historic/forecast
The reference source
Verisk Analytics, Inc. All rights reserved. 56
Energy is an inherently global business: We are located close to clients and industry contacts
Wood Mackenzie’s global footprint: 28 global offices in Americas, EMEARC & APAC
Total Headcount: ~1,100(1)
Headcount
(1) As of Oct 2015. Excludes contractor staff
Americas: 27% EMEARC: 54% APAC: 19%
Verisk Analytics, Inc. All rights reserved. 57
Our clients are active in highly complex and capital-intensive industries and need our help
Complex
Dynamic
Partner-ships
Capitalintense
INSTITUTIONAL INVESTORS
COAL
INVESTMENT BANKS
E&P
INTEGRATED
METALSUTILITIES
SERVICECOMPANIES
NOC,GOVERNMENTS,
NGO
OUR CLIENTS
Verisk Analytics, Inc. All rights reserved.
These features......enable these functions...
...to do this:
Global, integrated value chain coverage
Industry knowledge and insight
Accessible to clients
Independence and integrity
Bottom-up proprietary data
Reliable analysis and forecasts
Accuracy of data
Strategy and policy makers
Corporate planning groups
Business development
New ventures
Market fundamental groups
Risk management teams
Investors and advisors
Procurement teams
Understand their markets
Value assets
Reduce risk
Identify opportunities
Assess competitors
Strengthen strategy
Enhance in-house views
Negotiate effectively with third parties
Save time
Wood Mackenzie’s value proposition is compelling for multiple users with multiple needs
58
Verisk Analytics, Inc. All rights reserved.
Integrated research, sales & marketing, and consulting model designed to best serve client needs
59
New business ideas
ConsultingResearch
Access & feedback
Demonstration of value
Long-term relationships
Insight & information
Database & expertise
Expert network
Bespoke solutions
Strategic dialogue
Client
IntegratedModel
Consulting
Research Sales & Marketing
Verisk Analytics, Inc. All rights reserved.
Wood Mackenzie portal is the window to 60+ tools and models, 14,000 reports, and vital analysis
• December 2013 portal launch – Enhances user experience
– Facilitates access to breadth of Wood Mackenzie offerings
• Portal evolving as Wood Mackenzie client base grows
• Engagement up 58% in 2014 and 25% YTD in 2015
Portal
Upstream Data Tool
60
Verisk Analytics, Inc. All rights reserved.
We have developed unrivaled breadth and depth in our assets coverage
61
Upstream Data• 30,000 oil & gas fields
(assets)
• 52,000 blocks
• 55+ million data points
Valuation• 5,500+ commercial upstream
valuations
• 1,300+ technical upstream valuations
• 1,200+ mines (coal)
• 300+ assets (iron ore)
• 200+ plants (steel)
Plus…• 500+ exploration basins
• 200 unconventional plays (uncon play service)
• 300+ LNG regasification terminals
• 105 LNG liquefaction projects
• 200+ plays/sub plays (N. American company/play tool)
Verisk Analytics, Inc. All rights reserved.
We provide unique and integrated analysis and insight through trusted relationships established over 40 years…
62
Intelligence gathering Content development
Insight and services Integrated perspective
Nonpublic data,multiple sources,
asset-level information
Proprietary information,independent view,continuous updates
Asset owners/Governments/Regulators
WoodMackenzieexperts
Modeling and
analysis
Verisk Analytics, Inc. All rights reserved.
…and are deeply embedded in clients’ workflows
User workflow example: Opportunity screening (oil & gas business developer)
Review and filter all regional assetsUpstream Data Tool
Understand upside potentialExploration Service
Market supply anddemand dynamics
Regional Gas & Power Service
Valuation, capex, and cashflowsGlobal Economic Model (GEM)
Understand risksCall the Analyst / GEM
Deep dive on specific asset issuesUpstream Asset
Analysis
Wood Mackenzie content/tool
63
Verisk Analytics, Inc. All rights reserved.
Competitors operate across all of Wood Mackenzie’s commercial information market; we aim to be the leader in each vertical
64
Energy
Metals & Mining
Chemicals
Front-runners/leaders
Established global
Established regional
New entrants
Verisk Analytics, Inc. All rights reserved.
Having a business with the right talent and culture is key to driving long-term sustainable growth
65
Wood Mackenzie has received public recognition for its investment in staff and the quality of its work environment
High-Performing, Diverse, and Engaged Team
TalentOrganization & resourcing
Rewards & recognition
Culture
Supported by effective process and systems
Verisk Analytics, Inc. All rights reserved. 66
(1) Represents figures for FY 2014 for subscriptions only NOC = national oil company; NGO = nongovernment organization; E&P = exploration & production; Other includes utilities, manufacturing, conglomerates, and professional services
Wood Mackenzie has a diverse customer base with low customer concentration
Revenue diversified across end users(1) Low customer concentration
21%Top 10 client
subscription value (2015 YTD)
<4%Maximum individual
customer value
30%
26% 25%25%
24%
23%
21%
2009 2010 2011 2012 2013 2014 2015
Top 10 client subscription value
YTD
Metals &Mining
16%
Other
NOCs, Government & NGO
Financials
E&P andIntegrated
23%
4%
16%
41%
Verisk Analytics, Inc. All rights reserved.
Growth in number of Clients
900Total Customers
7%Customer Growth CAGR since 2009
Consistently High Renewal Rates(1)
We have consistently grown our client base and have industry leading renewal rates
(1) Renewal rates for subscriptions, calculated on total value.
900
822772
735722
642590
2015 (YTD)
201420132012201120102009 2015 (YTD)
98%98%
2010 2014
98%
67
Verisk Analytics, Inc. All rights reserved.
Our clients have been increasingly engaging our solutions and insights
0
20,000
40,000
60,000
80,000
100,000
120,000
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
Jan 16Jan 15Jan 14Jan 13Jan 12Jan 11Jan 10Jan 09Jan 08Jan 07Jan 06Jan 05
Brent crude $/bblNo. of visits
21% CAGR
(Jan 2005 – Sept 2015)
80% CAGR
(Jan 2014 – Sept
2015)
Number of visits to the Wood Mackenzie portal vs Brent crude price
68Based on individuals logging in to the Wood Mackenzie portal. Excludes Pathfinder and GEM solutions as they are offline.
Brent
No. of visits
Verisk Analytics, Inc. All rights reserved.
Source: Management Data, Management Presentations, BvD, Annual reports, Broker reports, OC&C Survey, OC&C analysisOriginal data in GBP. Conversion rate of 1 GPB = 1.53 USD used.
Energy and commodities information has a large addressable market (circa US$ 6bn)
RT Data
Technical
Sector Vertical
Product Category
Consulting2
Co
mm
erc
ial
En
erg
y &
Co
mm
od
itie
s In
form
atio
n
Real-Time Data
Market Size: c.$0.8 – 1bn
Market Size: c.$4bn
Market Size: c.$0.9bn
Market Size:
c.$0.1bn
Oil Gas Coal UtilitiesIndustrial Markets
PetChems Renewables
Market Size:
c.$0.2bn
Tec
hn
ica
l
Commercial
Wood Mackenzie Heartland
Nascent Category
Potential Future Category
Existing Wood Mackenzie markets, emerging verticals, and adjacent categories
69
Verisk Analytics, Inc. All rights reserved.
Recent dramatic drop in commodity prices has put pressure on our client base; short-term pressure on spend anticipated
70
E&P and Integrated
Financials
Metals & Mining
NOCs, Govs& NGOs
Americas
AsiaPac
EMEARC
Client Category Region
• Cost cutting to improve cash flow
• Companies waiting for market to stabilize
• Rationalization• Buying opportunities
being pushed
• Still facing malaise that started in 2012
• Domestic commitments result in cost-cutting lag
• Focus on efficiencies and attracting new investment
• Cuts in activity, especially in high-cost North American plays
• NOC concentration has lessened the negative impact for the time being
• Not reached the depths seen in Americas
• May have bottomed out for another year
H MImpact of Commodity Price Drop:
Verisk Analytics, Inc. All rights reserved.
However, we have also seen the moat widening
71
Trusted relationships established over 40 years and embedded way of working are key to maintaining the moat
Year-to-Date ChangesThrough Q3 2015
+25%Portal Usage
+34%Portal Super Users
+24%Client-Facing
Calls/Meetings
+98% Use of Macro Oils
Service and Global Gas Tool
Verisk Analytics, Inc. All rights reserved.
Wood Mackenzie has multiple avenues for growth in the short and long term
New Clients
M&A
ProcessImprovement
New Distribution Channels
Product Enhancement and New
Development
Wood Mackenzie is currently undersold and undermarketed
VeriskBusiness n+1 and Cross-
Sell
Investment through the cycle to capture the upside in a recovery
Principles for Growth
Expansion opportunities in emerging verticals and adjacent areas
Existing Product Up-and Cross-Sell + Consulting
Growth Avenues
72
Verisk Analytics, Inc. All rights reserved.
Product development and enhancement strengthen our market position and give access to adjacent categories
4 billion datapoints from75+ sources for 2.3m wells
Integrated analysis of
costs, permits, completions & production
Visualizationtool with
interactive maps, charts, type curve generator
“Making the tool that Wood Mackenzie analysts use available to our clients”
Launched October 2015
Example: North American Well Analysis Tool (NAWAT)
73
Verisk Analytics, Inc. All rights reserved.
Significant growth opportunity through New Channels
Benefits of New Channels
Increasing Brand Awareness
Accessing new clients and markets
Further embedding into client workflows
Increase penetration with existing clients
To support growth we are ‘Amplifying the Brand’
900
+4x
Potential ClientsWoodMac
WoodMac Current vs. Potential Clients
74
Verisk Analytics, Inc. All rights reserved.
Verisk and Wood Mackenzie are stronger together, with both cross-sell and n+1 opportunities
GIS Platform
Developing a common database and GIS
platform, in partnership with the JDE, for innovative new
offerings
Insurance
Repackaging andrepurpose of Wood Mackenzie content
for the insurance sector
Maplecroft
Cross-sell of current content between
Wood Mackenzie and Maplecroft
Internationalization
Leverage Wood Mackenzie footprint to
help internationalize Verisk
Aerial Imagery
Use of aerial imagery to enhance analysis across current and
new content
Supply Chain
Integrated supply chain solution across
Verisk verticals
Opportunities for developing new proprietary data and strengthening growth
75
Verisk Analytics, Inc. All rights reserved.
Summary
Verisk and Wood Mackenzie have matching values and distinctivesand are stronger together
76
Wood Mackenzie has strong customer relationships with high customer retention
Unique data assets and models serving energy, chemicals, and metals & mining
Current industry headwinds are increasing the need for our analysis and enabling us to become more deeply rooted in client workflows
Track record of innovation and multiple avenues for future growth
Verisk Analytics, Inc. All rights reserved.Verisk Analytics, Inc. All rights reserved.
Questions
77
Verisk Analytics, Inc. All rights reserved.
Financial Performance
Mark Anquillare, CFO
Verisk Analytics, Inc. All rights reserved.
Historical Performance Summary
79
Key Takeaways• Summary
− Strong growth across the board
− Organic revenue growth accelerated while EBITDA margins expanded, on average, over the time period
− Cash flow growth offset by necessary capital expenditures
− Adjusted EPS growth highlights our ability to continuously deliver shareholder value
• Implications for Future− Investments in our business
have positioned us nicely for continued, strong growth
Metric 2005-2009 2010-2014
Total Revenue 10.8% 15.2% CAGR
Organic Revenue Growth 7.8% 8.4% AVG
EBITDA 12.2% 15.0% CAGR
EBITDA Margin 43.4% 46.6% AVG
Operating Profit (EBIT) 11.4% 13.5% CAGR
CapEx as % of Revenue 3.6% 6.2% AVG
Cash Flow(EBITDA less CapEx)
12.0% 11.6% CAGR
Adjusted EPS 15.1% 17.9% CAGR
Productivity
Revenue/Employee $249 k $276 k AVG
EBITDA/Employee $108 k $129 k AVG
Note: Excludes mortgage.
Verisk Analytics, Inc. All rights reserved.
Organic Revenue Growth
80
11.0%
8.7%
5.7%
7.7%
5.7%
7.6%
9.1%8.2% 7.8%
9.4%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
7.8% Average
Key Drivers:• Organic growth is a measure of our vitality• Robust innovation agenda has spurred stronger organic growth• Growth has become more consistent
Note: Excludes mortgage. Organic growth includes businesses owned for a full year or more at measurement.
8.4% Average
Verisk Analytics, Inc. All rights reserved.
EBITDA
81
250289
343 367 396459
555
671745
803
41.5%42.6%
45.0% 44.2% 43.6%46.3% 46.6% 47.6% 46.7% 46.0%
35 .0%
40 .0%
45 .0%
50 .0%
55 .0%
60 .0%
65 .0%
70 .0%
75 .0%
80 .0%
0
10 0,00 0,0 00
20 0,00 0,0 00
30 0,00 0,0 00
40 0,00 0,0 00
50 0,00 0,0 00
60 0,00 0,0 00
70 0,00 0,0 00
80 0,00 0,0 00
90 0,00 0,0 00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
(in $ millions)
12.2% CAGR
margin
Note: Excludes mortgage.
Key Drivers:• 2010-2014 EBITDA growth has accelerated compared to 2005-2009• Average 2010-2014 EBITDA margin was 46.6%, up from 43.4% in 2005-2009• Evidence of strong operating leverage
− 2014 EBITDA margin was 47.6% after adjusting for prospective revenue (Healthcare), one-time FTC, and talent realignment costs
15.0% CAGR
Verisk Analytics, Inc. All rights reserved.
Capital Expenditures
82
22 2132 27
38 3656
73
145 147
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
(in $ millions)
3.6% Average, as % of revenue
Hardware/Software
3.7% 3.0% 4.2% 3.2% 4.1% 3.6% 4.7% 5.2%9.1% 8.4%CapEx as a % of Revenue
non-IT (i.e. furniture)
Internally Dev. Software
6.2% Average, as % of revenue
Note: Excludes mortgage.
Key Drivers:• New product innovation and data assets have led to greater capital intensity• Increased delivery of solutions through software resulting in deeper integration into customer workflows
Verisk Analytics, Inc. All rights reserved.
Adjusted EPS
83
15.1% CAGR
17.9% CAGR
$0.58 $0.70$0.85 $0.91 $1.02
$1.24
$1.63
$2.03$2.22
$2.40
41.4% 20.9% 20.7% 6.9% 12.4% 21.9% 31.2% 24.2% 9.4% 8.3%1.0%
51 .0%
10 1.0%
15 1.0%
20 1.0%
25 1.0%
30 1.0%
35 1.0%
40 1.0%
45 1.0%
0.0 0
0.5 0
1.0 0
1.5 0
2.0 0
2.5 0
3.0 0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
(in $/share)
growth
Note: Excludes mortgage.
Key Drivers:• Adjusted EPS CAGR accelerated in public company period driven by execution• Effective capital deployment via acquisitions and share repurchases contributed to the performance
Verisk Analytics, Inc. All rights reserved.
Productivity
84
228 243 253 266 256 266 270 279 277 287
95 103 114 117 112 123 126 133 129 132
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
(in $ thousands) EBITDA/EmployeeRevenue/Employee
2,640 2,795 3,011 3,124 3,553 3,737 4,407 5,047 5,758 6,094FTEs
Note: Excludes mortgage.
Key Drivers:• Few incremental resources are required to implement and service additional customers
• Fostering a culture of continuous improvement
Verisk Analytics, Inc. All rights reserved.
Risk Assessment
31%
DA Insurance
29%
Financial Services5%
Energy & Specialized
20%
Healthcare15%
3Q 2015 Revenue Distribution
Decision Analytics69%
Diverse, High Recurring Revenue Sources
Transaction Revenue25%
Subscription Revenue75%
3Q 2015 YTD Subscription Base
85
Verisk Analytics, Inc. All rights reserved.
• Growth driven by a combination− New Customers
− Deeper Penetration into Existing Customers
− New Solutions
• Majority of Revenue is Prepaid Quarterly or Annually• Very high customer retention
1.8% 0.5% 2.9% 0.3% 1.6% 0.3%
10.3% 17.6%
Industry
Standard
Property
Specific
DA
Insurance
Healthcare Financial Energy &
Specialized
Acquired Total
Revenue
3Q 2015 YTD Contribution to Revenue Growth
6.1% 5.2% 8.5% 1.5% 30.2% 213.7%in Energy &Specialized 17.6%
Industry
Standard
Property
Specific
DA
Insurance
Healthcare Financial Energy &
Specialized
Acquired Total
Revenue
3Q 2015 YTD Revenue Growth
86
Insurance a Strong Foundation; New Verticals Making Important Contributions
Note: (1) After adjusting for prospective revenue, Healthcare contributed 1.5% to total revenue growth of 19.2%, and grew 9.9% 3Q 2015 YTD.
(1)
(1)
(1)
Verisk Analytics, Inc. All rights reserved.
168195
223242
224 236257 260 247 262
287 300 288326
379
100
150
200
250
300
350
400
450
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15
Decision Analytics Revenue(in $ millions)
145 144 144 146153 154 155 156
162 162 161165
171 172 172
130
140
150
160
170
180
190
200
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15
Risk Assessment Revenue(in $ millions)
Consistent Quarterly Top-Line Progression
87
Verisk Analytics, Inc. All rights reserved.
• Stable, visible growth profile
• 5.2% growth in 2014, 5.9% growth in 2015
Risk Assessment: Our Heritage
462
486
514
2013 2014 2015
3Q YTD Revenue (in $ millions)
55.8%57.1%
59.2%
2013 2014 2015
3Q YTD EBITDA Margin %
• Scale economies
• Revenue growth coupled with good cost management
• Aligning talent for future growth
• 100 of top 100 P&C companies are customers• Industry-standard, mission-critical, embedded insurance solutions
− Loss cost estimates – insurers’ “cost of goods”
− Regulatory compliance
− Enable speed to market
− Leading commercial property analytics for insurers
• Founded on unique data contributed by insurers
88
Verisk Analytics, Inc. All rights reserved.
• Strong top-line growth
• 11.0% growth in 2014, 24.7% growth in 2015 helped by acquisitions
Decision Analytics: Enhancing Our Future
717 796993
2013 2014 2015
3Q YTD Revenue (in $ millions)
41.5%
39.1%
41.5%
2013 2014 2015
3Q YTD EBITDA Margin%
• Critical investments to drive future growth
• Operational efficiencies contributing to margin
• New, large verticals with data analytic needs• Cross-vertical themes (antifraud, predictive modeling, benchmarking, optimization)
• Leveraging existing assets− Repurposing of data (n + 1)
− Technology infrastructure
− Replatforming
Note: 2015 margin excludes one-time items related to Wood Mackenzie acquisition and gain on sale of EVT warrants. 89
Verisk Analytics, Inc. All rights reserved.
Opportunities• International expansion
• Solution line extensions
• Data exchanges
• Create new platforms to deliver our solutions
• Partnerships and third party integration
• Predictive analytics
• Repurposing solutions into adjacent and new markets
Differentiators• Unique and proprietary industry data
assets
• Brand recognition and reputation
• Deeply embedded in customer workflows
• Strong technical and industry (domain) expertise
• Broad solution set
• Ability to execute
• Advanced analytical and modeling skills
P&C: Differentiators and Opportunities
261 266 270 275 279288
296 294304
315 311320 325
337 334
250
270
290
310
330
350
370
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15
Combined Insurance Revenue(in $ millions)
90
Verisk Analytics, Inc. All rights reserved.
Strong, Stable Revenue Growth(in $ millions)
Leading EBITDA Margin(%)
Low Capital Intensity(as reported, CapEx as a % of Revenue)
1,179 1,2821,507
2013 2014 2015
Verisk’s Differentiated Financial Model3Q Year-to-Date (YTD)
47.1%45.9%
47.6%
2013 2014 2015
8.5%8.0% 7.0%
2013 2014 2015
279 276
414
2013 2014 2015
Strong Free Cash Flow(as reported, in $ millions)
Note: Free Cash Flow defined as Cash from Operations less CapEx.Note: 2015 margin excludes one-time items related to Wood Mackenzie acq. and gain on sale of EVT warrants. 91
Verisk Analytics, Inc. All rights reserved.
Verisk: Disciplined Capital Allocation
(in $ millions)
$3.8 B 70%
$1.6 B 30%
Cumulative
Acquisitions and earn-outs Share Repurchase
2011 2012 2013 2014 2015
Share Repurchase $382 $163 $279 $778 $0
Acquisitions and earn-outs $143 $808 $1 $35 $2,800
Acquisitions and earn-outs Share Repurchase
Note: Cumulative from 2011 through June 2015; 2015 Acquisition amount is rounded to the nearest 0.1 billion and net of currency hedges. 92
Verisk Analytics, Inc. All rights reserved.
250450 350
900
350
900
850
2015 2016 2017 2018 2019 2020 2021 2022 2025 2045
as of 9/30/2015
Public Bonds Revolver Drawn Undrawn Revolver
Debt/ EBITDA(1) 2.9xCovenant level(2) 3.75x
($ in millions)
Bonds $2,300Revolver Drawn 0,900Total Debt $3,200
Revolver expanded to $1,750M, due May 2020
Strong Capital Structure to Support Growth
Investment Grade RatingsS&P: BBB-Moody’s: Baa3Fitch: BBB+
Note: 1. Per debt covenantNote: 2. Steps down to 3.50x at the end of the fourth fiscal quarter following the acquisition of Wood Mackenzie. 93
Verisk Analytics, Inc. All rights reserved.
• Recurring revenue stream and high barriers to entry− 75% of total revenue is subscription and long-term contracts
− Extremely high customer retention
− Majority of revenue is prepaid quarterly or annually
− Long-standing and deep relationships with our customers
− Deeply embedded in our customers’ critical decision-making processes
• High incremental margins on existing businesses− Business model is “build once, sell many times”
− Very little incremental cost to add a new customer
− Our business is not service or capital intensive
• Diverse client base and revenue contribution− 4 primary verticals with strong underlying demand factors
− Largest customer accounts for about 5% of revenues
− Top 10 customers account for about 21% of revenues
94
Attractive Business Model
Verisk Analytics, Inc. All rights reserved.
Two Paths to Growth –Organic and M&AEva Huston, SVP and Treasurer
Verisk Analytics, Inc. All rights reserved.
Long Runway Remains for Organic Revenue Growth
• While we have grown well for many years, our opportunity remains robust
− 8.4% average organic revenue growth over five years
− Multiple verticals contributing to stability of growth
− Market opportunity is large and growth can continue to exceed that of underlying vertical
• We have multiple paths to drive growth in each of our verticals− Existing customers, new solutions
− Adjacencies for new customer sets
− Adding data to create new analytics
“We are limited only by the imagination of our people.”
96
Verisk Analytics, Inc. All rights reserved.
P&C Addressable Market
P&C
Current Verisk Revenue Opportunity
$7.5 Billion
Note: Revenue reflects TTM through September 2015.
97
• AIR• Commercial Lines UW• ISO Solutions• Personal Lines UW• Claims
Verisk Analytics, Inc. All rights reserved.
Energy and Specialized Addressable Market
Energy
Current Verisk Revenue Opportunity
$6.0 Billion
Note: Revenue reflects TTM through September 2015, pro forma for WoodMac and Maplecroft.
98
• WM Commercial• Petrochemicals• Metals & Mining• Renewables• Insurance and Other Related
Verisk Analytics, Inc. All rights reserved.
Healthcare Addressable Market
Healthcare
Current Verisk Revenue Opportunity
$5.0 Billion
99
Note: Revenue reflects TTM through September 2015.
• Revenue Solutions• Payment Solutions• Population Health Solutions• Quality Solutions
Verisk Analytics, Inc. All rights reserved.
Financial Addressable Market
Consumer Financial
• Global opportunity for benchmarking studies and current analytical solutions
• Innovative solutions for existing customer base
• Media Effectiveness• Other analytics built on unique data
Current Verisk Revenue Opportunity
$2.0 Billion
100
Note: Revenue reflects TTM through September 2015.
Verisk Analytics, Inc. All rights reserved.
Verisk Addressable Market
$21 Billion Addressable Market
P&C
Healthcare
Energy & Specialized
Financial
Current Verisk
Revenue
101
Note: Revenue reflects TTM through September 2015.
Verisk Analytics, Inc. All rights reserved.
M&A Has Been Effective
• Driven by strategy• Valuation discipline crucial• Cash generation focused: 19% overall IRR
− 15% hurdle rate, adjusted for risk
− Analysis benchmark for measuring IRR is unlevered
− Assume conservative 10x terminal EBITDA multiple
• Exceeded WACC for all deals of size− Strong history of growth
− Track record of margin expansion post closing
102
Verisk Analytics, Inc. All rights reserved.
Summary of Acquisitions
1990’s1%
2000 – 2004 4%
2005 – 200913%
2010 – 201423%
201559%
By Time Period
By VerticalBy Deal Size
> $500mm59%
$100mm -$500mm26%
Deals $25mm -$100mm13%
< $25mm2%
103Note: Deal size includes both upfront plus earn-out payments.
Total Deals~$4.8 billion
Insurance14%
Financial9%
Mortgage2%
Healthcare13%
Specialized3%
Energy59%
Verisk Analytics, Inc. All rights reserved.
> 20%
10% to 20%
5% to 10%
< 5%
> 40%
30% to 40%
20% to 30%
10% to 20% < 10%
Acquisitions Have a History of Strong Growth and Margins
Acquisition Spend by Target Revenue CAGR (Yr. 1-3)
Acquisition Spend by EBITDA Margin @ Acquisition
104Note: Deal size includes both upfront plus earn-out payments. Wood Mackenzie excluded.
Verisk Analytics, Inc. All rights reserved.
Revenue Growth by Vertical
Strong Acquisition Revenue Growth Across Verticals
18.5%
14.7% 14.8%
17.4%
13.7%
15.8%
Financial Healthcare Insurance Mortgage Specialized
Revenue CAGR (Year 1-3) Corp. Avg. Acquisition Revenue CAGR
105Note: Excludes Wood Mackenzie. Revenue CAGR is weighted.
Verisk Analytics, Inc. All rights reserved.
Internal Rates of Return Demonstrate Shareholder Value Creation
Methodology• Size of bubble reflects purchase price
• IRR based on free cash flow and 10x terminal multiple methodology for all deals except Mortgage
• Some bubbles reflect aggregation of multiple acquisitions (e.g. Mortgage)
8% Estimated WACC
Average IRR~19%
IRR
106
MortgageSale Price~$155M
Verisk Analytics, Inc. All rights reserved.
Multiple Paths to Growth
• Strong track record of both organic revenue increases and effective M&A
− 8% historical organic revenue growth
− 16% average acquisition revenue growth
• Opportunities remain large and growing− Working to execute on both organic and acquisitions to drive
growth
• Share repurchases remain valuable alternative for capital deployment
− Deployed $1.6 billion over the past five years
• Reasonable flexibility while deleveraging towards 2.5x Debt/EBITDA target
107
Verisk Analytics, Inc. All rights reserved.Verisk Analytics, Inc. All rights reserved.
Senior ManagementQ & A
108
Scott G. Stephenson
President and Chief Executive Officer
Scott G. Stephenson is president and chief executive officer of Verisk Analytics.
Before becoming Verisk’s CEO, Mr. Stephenson served as president and chief operating officer, managing the day-to-day operations of Verisk Analytics and all of the company’s operating units. He joined Verisk’s ISO subsidiary in 2001 to focus on bringing new value and functionality to the company’s product offerings. In 2002, he was promoted to executive vice president. Mr. Stephenson became chief operating officer in 2008 and president in 2011.
Before joining ISO, Mr. Stephenson was a senior partner with The Boston Consulting Group (BCG), a global management consulting firm, where he served on the firm’s North American operating committee. He also served as an advisor to Silver Lake Partners, a technology-oriented private equity firm.
Mr. Stephenson is a graduate of the University of Virginia, where he received a bachelor of science degree in mechanical engineering, and the Harvard Business School, where he received a master of business administration degree. Mr. Stephenson has served on numerous civic and charitable boards.
Stephen J. Halliday
Chief Executive Officer – Wood Mackenzie
Stephen J. Halliday is chief executive officer of Wood Mackenzie, a global leader in data analytics and commercial intelligence for the energy, chemicals, metals, and mining verticals.
Mr. Halliday is responsible for setting strategy and oversee-ing worldwide operations.
Since joining Wood Mackenzie in 1989, Mr. Halliday has filled a number of leadership roles. Before assuming his current position, he was executive director of Wood Mackenzie’s Energy business, where he covered the com- pany’s research and consulting activities for eight years. Previous roles included senior analyst in the U.K. upstream team, head of the European Energy team, and head of the Energy Consulting team. Mr. Halliday was part of the management team that led the company’s management and employee buyout in 2001. He was appointed CEO in 2007.
During his 29 years in the energy industry, Mr. Halliday has also worked for BP in the downstream oil sector and TOTAL in the downstream gas business.
Mr. Halliday holds a bachelor of science (honours) degree in chemical engineering from Edinburgh University.
SPEAKER BIOGRAPHIES
Mark V. AnquillareGroup Executive, Risk Assessment
Executive Vice President and
Chief Financial Officer
Mark V. Anquillare is executive vice president and chief financial officer of Verisk Analytics. In his role as CFO,
Mr. Anquillare is responsible for Verisk’s financial processes and systems, financial analysis, and accounting. He also manages tax reporting, treasury functions, and investor relations and plays an important role in forming Verisk’s strategic plans, acquisition strategies, and product develop-ment initiatives. Mr. Anquillare is responsible for multiple corporate departments, including marketing, information technology, and human resources. He also oversees the ISO Solutions and Underwriting Solutions businesses of Verisk Insurance Solutions.
Mr. Anquillare joined Verisk’s ISO subsidiary in 1992 as director–financial systems. He was promoted to assistant vice president in 1994 and to vice president and controller in 2000. Mr. Anquillare was promoted to senior vice president and controller in 2005, to senior vice president and chief financial officer in 2007, and to executive vice president and chief financial officer in 2011.
Before joining ISO, Mr. Anquillare was employed by the Prudential Insurance Company of America. While at Prudential, he was involved in the life and health business and property and casualty operations.
Mr. Anquillare is a graduate of the University of Notre Dame, where he received a bachelor of business administration degree, and the Rutgers Graduate School of Management, where he received a master of business administration degree. Mr. Anquillare is a Fellow of the Life Management Institute (FLMI).
Mark McCaffertyHead of Upstream Oil and Gas Research for
the EMEARC region – Wood Mackenzie
Mark McCafferty is Wood Mackenzie’s head of Upstream Oil and Gas Research for the EMEARC (Europe, Middle East, Africa, Russia, and Caspian) region.
Mr. McCafferty is responsible for the delivery of Wood Mackenzie’s EMEARC upstream content.
Since joining Wood Mackenzie in 2002, Mr. McCafferty has managed the Caspian, Russia, Australasia, and South East Asia upstream teams. He led the relocation of the South East Asia team from Edinburgh, U.K., to Singapore in 2007. Mr. McCafferty became research manager, Europe and Sub Sahara Africa, in 2011 before taking on his current role in 2014.
During his 17 years of experience in the upstream oil and gas industry, Mr. McCafferty was also a project executive in the Scottish Enterprise’s Oil and Gas team in Aberdeen, U.K.
Mr. McCafferty holds a bachelor of science (honours) degree in technology and business from Robert Gordon University in Aberdeen.
Eva F. HustonSenior Vice President, Treasurer, and
Chief Knowledge Officer
Eva F. Huston is the senior vice presi-dent, treasurer, and chief knowledge officer of Verisk Analytics. She joined the company in 2009 as head of investor
relations, playing an important role in Verisk’s initial public offering of equity. She was appointed treasurer in 2011 and led the company’s initial public debt issuance. She assumed additional operational responsibilities in 2012 and 2013.
Ms. Huston is responsible for capital structure and financial planning, corporate marketing and market intelligence, investor relations, corporate communications, customer service, and sales operations. She plays a key role in the evolution of Verisk’s product and solution vision for future growth. She also oversees relationships with the debt and equity investment communities, including both buy-side institutional investors and sell-side research analysts.
Before joining Verisk, Ms. Huston held the title of managing director in telecom, media, and technology investment banking at J.P. Morgan, where she was responsible for the marketing and information services practice. Her client base included companies providing data and analytics to a variety of industry verticals, such as consumer and media, financial services, insurance, and automotive. Ms. Huston raised more than $25 billion in equity and debt financing for her clients and advised clients on significant sector acquisitions.
Ms. Huston is a graduate of Georgetown University, where she earned a bachelor of science degree in foreign service with a concentration in international politics. She specialized in Russian area studies.