Verisk Analytics (VRSK) has seen its shares plummet nearly 50% over the past year as concerns mount over the potential impact of artificial intelligence (AI) on its established software advantages in the insurance sector. Historically a key partner for property and casualty insurers, Verisk’s proprietary databases and regulatory compliance have provided a competitive edge. However, the fear is that AI could enable insurers to develop in-house analytics, undermining Verisk’s margins and market position.
Despite these challenges, Verisk is proactively integrating AI into its offerings, launching tools like the GenAI Commercial Underwriting Assistant and XactAI claims automation. While revenue growth has slowed, with a drop from 7.5% in 2024 to just 3.9% in Q1 2026, the company maintains a robust adjusted EBITDA margin above 50%. Additionally, Verisk has returned $1.4 billion to shareholders through buybacks and an 11% dividend increase, indicating confidence in its long-term profitability.
For market professionals, Verisk’s current valuation at 22 times earnings estimates presents a potential buying opportunity, especially as the long-term effects of AI on the insurance landscape remain uncertain.
Source: fool.com