JERSEY CITY, N.J. - Verisk (NASDAQ:VRSK), a prominent data analytics and technology provider, has introduced its Next Generation Models (NGM), a comprehensive suite of over 100 catastrophe models, to enhance global risk analysis. This initiative is set to revolutionize how insurers and reinsurers assess and manage potential losses due to extreme events.
The NGM suite, now available on the Touchstone platform, is touted as the first of its kind to offer a next-generation modeling framework that promises more accurate reflections of insured losses from catastrophic events. Touchstone is utilized by all top ten U.S. P&C insurers and nine of the top ten global P&C insurers, signaling a significant industry adoption.
The new models are designed to provide a more complete and precise view of risk, allowing for improved technical pricing estimates, refined risk differentiation for sub-perils, and better representation of tail risk. They also support complex insurance policy structures, offering a comprehensive representation of market terms and conditions, and improved modeling of uncertainty and geospatial dependencies in loss accumulation.
Verisk's NGM aims to furnish a deeper understanding of uncertainty and a sophisticated solution for managing natural catastrophe risk. The enhanced financial module within NGM delivers a reliable global view of risk, while redesigned workflows in the loss calculation process aim to yield more accurate results that align with policy structures.
Rob Newbold, president of Extreme Event Solutions at Verisk, emphasized the company's commitment to resilience and innovation in the insurance sector. "The release of NGM is the next step in our ongoing commitment to making societies more resilient and helping the insurance industry protect their clients when they are impacted by the devastating impacts of natural catastrophes," said Newbold.
The Verisk Hurricane Model for the U.S., part of the NGM suite, has already been approved for filing in Florida, indicating regulatory confidence in the new framework.
This development is a response to the evolving needs of the insurance industry, which is seeking more flexible and robust tools for underwriting and managing portfolio risk in an increasingly complex risk environment. The NGM will also serve as the foundation for cloud-native platforms, which are expected to further improve insurance and reinsurance workflows.
The information for this article is based on a press release statement.
InvestingPro Insights
As Verisk (NASDAQ:VRSK) continues to innovate with its Next Generation Models for global risk analysis, the company's financial health and market performance provide a context for its capacity to invest in and sustain such advancements. Verisk has demonstrated a strong commitment to shareholder returns, as evidenced by its aggressive share buyback strategy and a consistent rise in dividends over the past five years, an InvestingPro Tip that underscores management's confidence in the company's financial stability and future prospects.
Moreover, Verisk's impressive gross profit margins, which stood at 67.31% for the last twelve months as of Q1 2023, reflect its operational efficiency and ability to maintain profitability—critical factors for funding ongoing research and development efforts. The company's market capitalization is substantial, currently at $32.5 billion, and despite trading at high valuation multiples, such as a P/E ratio of 42.14 and a Price / Book ratio of 104.82, Verisk remains a formidable player in the data analytics sector.
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