(Neil Spector, President, Underwriting Solutions, Verisk. Source: Verisk.)

Verisk (Jersey City, N.J.) is a unique vendor in the insurance technology space, having grown out of rating services bureau ISO (Insurance Services Office) and emerging as holding company Verisk with a 2009 IPO. During the last two decades, the company has acquired over 40 business, expanding its reach of solutions in predictive analytics and decision support consultations in areas including fraud prevention, actuarial science, insurance coverage, fire protection, catastrophe and weather risk, and data management. More recently Verisk explored the opportunity to become a data and analytics provider not just to insurance but to the financial services industry more broadly, and to the energy industry. The company returned to its historical focus in 2022, divesting itself of its financial services and supply chain assets, and completing the process earlier this year with the divestment of energy industry assets. IIR recently connected with Neil Spector, president of the company’s Underwriting Solutions division to talk about how the company is refocusing on the insurance industry exclusively and seeking to provide innovative solutions that fit the current economic and technological environment.

IIR: As Verisk has returned to its knitting, as they say, reasserting its historical focus on insurance exclusively, how else is it rethinking its market approach?

Neil Spector, President, Underwriting Solutions, Verisk: Our CEO Lee Shavel, appointed about a year ago, has driven the 100 percent focus on insurance. From an insurance customer perspective, I don’t think a lot has changed. One of our goals is to engage at a more senior level and talk about how we can address industry problems. There are challenges that are difficult for a single insurer to solve, and Verisk has economies of scale and a central position in the industry. We have also made some other leadership changes. We brought in a new CFO, Elizabeth Mann, to take over for Lee’s role because he was promoted. And Maroun Mourad, who worked for me for many years in underwriting, has moved over to take over our claims organization.

IIR: Why did Verisk decide to focus solely on insurance?

NS: We decided that we can provide more value to the insurance industry than those other markets. And by having the exclusive focus, we feel we’re in a position to accelerate the good work we’ve done in insurance—and not just in the P&C insurance industry. In late 2019, we acquired life insurance software provider FAST [Metuchen, N.J.] The company’s CEO Tom Famularo now works for me and leads our life solutions unit. That’s been a great addition to Verisk. Our goal for the life insurance industry is to build off that software platform and add data and analytics to it so that we can hopefully solve some of the same problems—such as fraud, for example—in life that we’re solving in property and casualty.

I would also emphasize that we’ve become more technology-focused over time. Many may think of us as a pure data analytics company, but software has become a key focus for us, and we’re platforming many of our solutions onto modern technology. That includes a move to cloud-based computing. If you think about the loss costs, rules, and forms that the traditional ISO business had, we’re providing a new modern platform for clients to access that content and workflow tools for them to more easily customize our content, and use our content in their business. We’ve been making a very significant digitization effort around our traditional business.

IIR: And how does that translate into accelerating digital transformation for your clients?

NS: One of the ways we’re supporting insurers digital transformation is through our LightSpeed solution, which moves data and analytics forward into the quoting process for auto, home, and small commercial businesses. And it allows carriers to deliver a reliable quote in automated fashion with just a name and address. Auto has, of course, been automated for many years, but there’s been an appetite to automate property and small commercial, which we’ve done.

People increasingly use smart phones or online platforms, and if they’re working with their agent, the agent wants to spend the time advising them on the insurance coverage they need, not keying data into the system. So LightSpeed has been one way that we’ve helped insurers digitize. New startup insurance companies starting with brand new platforms can plug applications like LightSpeed right into their process. We’re working with other industry partners, be those policy admin solution providers or ones that access information for brokers and agents.

Of course, digitizing our existing assets is also a way of helping our customers. For example, we’ve digitized our core loss costs, rules, and forms platform, so that customers can go on to a digital portal and get any information they need about the line of business that they’re writing, whether it’s information from Verisk or information from other sources. We’re going to make that platform easy to integrate with, working with industry partners, such as policy admin solution providers, or those that access information for the brokers and agents.

IIR: Would Rating-as-a-Service be an example of bringing the cloud dimension to your offerings? What new advantages does that bring?

NS: Definitely. In the past we provided our content to third parties, and they had to interpret the ISO content and build the rules into their rating platforms.

Sometimes you know they didn’t interpret the content correctly or maybe they had challenges keeping up with all the updates that came out from Verisk. That put pressure on both the third-party software platforms and our customers. So, what rating-as-a-service does is it allows them to use an API link directly to Verisk to rate an ISO policy in the cloud. We maintain all that content on behalf of our customers and their partners. We issue updates and  provide ease of integration for policy admin and rating solutions in the market to be able to access our content that way.

IIR: How does Verisk look at product innovation?

NS: We’re focused on making our systems easier to use and providing workflow tools that will allow our customers to innovate their products more quickly using our platform. And because various programs are filed and approved with regulators, it should help our customers more quickly get approvals because they’ll be using the content native on our platform. So, speed-to-market is a big benefit of all of this.

We’re also interconnecting our systems so they can leverage data across our platforms. Whether that’s catastrophe modeling information out of our Touchstone platform or claims loss information out of our Xactimate platform, we allow our customers to more seamlessly use our data across the entire policy lifecycle.

IIR: What’s the current place of strategic acquisitions in Verisk’s market strategy?

NS: We do strategic acquisitions when it makes sense. We’ve already talked about FAST. We’re also expanding globally, and to that end we purchased a company in 2022 called Opta, which is the leading provider of property solutions in the Canadian market.

We’ve also made acquisitions to take advantage of a growth opportunity on the marketing side of insurers’ businesses. In 2019, we purchased a company called Jornaya, which incorporates the interpretation of human behavior in the sales process. And in 2022 we purchased Infutor, a company focused on identify verification and resolution. We put those together and created Verisk Marketing Solutions that provide consumer insights and early shopping behavior detection for insurance companies.

We also look at opportunities for organic growth and development. Rating-as-a-Service is an example, as are the investments we’re making in loss costs, rules, and forms and our LightSpeed solutions. We recognized that we needed capabilities in the life insurance market. So we decided to purchase FAST. So it’s a combination of acquisitions and organically-built innovation that helps us solve insurance customers’ challenges while expanding into other markets outside the U.S.

IIR: Tell us more about Verisk’s longer-term strategy to be a provider for the life insurance industry.

NL: Right now, life insurers are transforming their businesses by moving to new platforms in a way that is not dissimilar to when P&C carriers were doing a lot of policy admin system implementations about ten years ago. There are a lot of life insurers with legacy systems that need to upgrade. There’s also private equity money that is coming in and actually either purchasing a legacy book of business from a carrier and putting it on a modern platform or developing new products like products from scratch. We see a huge opportunity for the growth of our FAST platform, and that business is growing nicely.

We also see an opportunity for strategic data and analytics in the life insurance industry, and we actually have a partnership with LIMRA/LOMA related to the FraudShare product. We’re partnering with them to help build out and integrate anti-fraud capabilities, share insights, and get more companies integrated into our FAST platform.

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