Good morning, everyone. I'm Greg Peters, and I am the insurance, insurance technology, insurance brokerage analyst here at Raymond James. And welcome to day two of our Raymond James Institutional Investors Conference. Honored to welcome back Verisk. Verisk has been a longstanding participant in our conference and within my sector, typically one of the most popular companies in terms of investor engagement, investor interest. Today we have with us Stacey, who serves as their executive in their investor relations office, officer, excuse me. And then we have Lee, who's the CEO. So for the next 30 minutes, we're going to have just a conversation. And please feel free, if you have a question, to raise your hand, and you can ask a question. We'll certainly include you in the conversation. So good morning, Lee. Welcome back. It's been a couple of years since you've been here. Hasn't. You've been in the role now as CEO for a couple of years. Maybe this is a good starting point just to reflect back on the progress that you've made since you've become CEO and how you think about the company's positioning today in the marketplace. Excellent. Well, thanks. And Greg, thanks for having us back. And thanks, everyone, for joining us today. This is a great conference. I've been coming to it even from before Verisk when I was at Nasdaq. And it's really a great opportunity to meet with a much broader set of investors that have more of a generalist attitude. And the growth focus is fantastic. Although, as Stacey knows, it has been a while since I've been to the conference. And so last night, I had that classic nightmare of not having prepared for the exam and having memories of me asking my freshman friend, do you have this textbook? Because I need to read the textbook before the exam tomorrow. So I know everybody is not naturally thinking I want to talk about insurance to start the day, but I'm going to try to make it as exciting and interesting as possible. So yes, it's been nearly three years in May. And I will tell you, we are certainly thrilled at the progress. I saw Carl Hess, the CEO of WTW, last night at the dinner. And we both stepped into the CEO role at about the same time. And we both joked the first thing that we wanted to do was make certain that we didn't fall flat on our face out of the gates. But one thing, the way we think about it is, for our first year in 2022, the job was restructuring the business away from a broad, multi-industry, vertical data analytics company. And that took a lot of work. We had to sell our financial services business, our energy business. We had an environmental, health, and safety business. And we got all of that accomplished, fortunately, in a challenging market, largely by the end of 2022. And that, then in 2023, the focus was on how do we demonstrate our operational viability as an insurance-only enterprise. And that was a particularly strong year. We had 8.7% organic constant currency revenue growth that translated into 11.5% EBITDA growth. So that was a great start. It demonstrated that we had the potential to overperform our expectations that we set at Investor Day. And then in 2024, the focus that I emphasized was elevating our strategic dialogue with our clients. And it was important for us to demonstrate that beyond that product dialogue, which is very important and very solid, is that we were raising that so that we could build a stronger strategic dialogue with our clients as a partner. And also, importantly, to demonstrate the value that we were providing to the enterprise and what we could do to help them at the enterprise level become more efficient. And so that we produced a very solid year, 7.1% organic constant currency revenue growth, 9.9% organic constant currency EBITDA growth. So great compounding from where we started. And we go into 2025 with a very solid business momentum, elevated strategic dialogue. And our focus in 2025 is on continuing to take advantage of that strategic dialogue momentum in developing more integration among the product sets and the data sets that we have to better serve our clients and the insurance ecosystem. And so I think we have laid the groundwork to now expand the TAMs to think more broadly about what we can do across the industry and fulfill something that we talked about Investor Day, which is building on that data and analytics strength into more and more of a network company that connects the industry, gathering data, processing data, and distributing it to facilitate more efficient interactions and transactions across the business. Yeah. It has been an interesting evolution for your company with the organic revenue results that you've been able to consistently produce, coupled with the unique data sets. Maybe you can spend a minute and talk about the investments that you're making in your data sets and the capabilities that you're bringing to market. Because I feel like a big part of the investments is in some of the legacy products that you have and some of the products that are most important to your customers. Yes. And there are a lot of dimensions to it. Thanks for asking the question. Because certainly, a lot of the probably the most impactful investment that we've made that we've talked about on our calls has been the Core Lines Reimagined investment. And for those of you that are not familiar with our business, our historic role has been to serve as a utility gathering loss premium data across a wide variety of commercial lines, personal lines for the insurance industry, so that they can utilize that information, that loss data, the premium data to price risks more effectively so that they can see a broader spectrum of loss experience. And historically, we had delivered much of that data in not a digital form, but in circulars that would go out. And they might be PDFs. But we invested significantly in digitizing that data, making it more easily obtainable through APIs and other electronic means, as well as addressing an issue that we heard repeatedly from clients is that they often found that data, while very good actuarially, and there's a lot of data cleansing that we have to do to make that data useful, is that they wanted more data sooner, and so we accelerated updates with information that we were getting, and so that was a digitization. We also added content. You will have seen us talk about recently our premium analysis, our actuarial premium analysis, that is another dimension of that information. We also got feedback from clients that they wanted more excess and surplus. These are coverages that go beyond admitted lines, which are regulated lines. And with some of the challenges in the admitted lines, they wanted more data on excess and surplus data. We just had a client come up to me at an industry event to thank us for the progress that we've made on that front. So those are all investments in both the data and also the delivery or access mechanisms that the industry relies on. But I also want to point out other areas of investment for us, and I'll shift to the claims area. Has been in investing in the infrastructure or the platforms that the industry relies on for claims processing in two ways. One, from a stability and a reliability standpoint, we wanted to make certain that our systems are as up to date and as resilient as possible so that our clients could better rely on them. But we've also had to make investments specifically to open the ecosystem in the claims world so that rather than just fulfilling our cost estimation function, which the industry values, we are also finding ways to connect other partners that may be providing data or analytics or other services that are relevant to their business. And that's an investment that if we make, it means that there are hundreds of other insurance companies that don't have to make that investment because we've pre-threaded it into our system. So that's been an area of investment. And then finally, I'll also speak to the investments that we make in updating our catastrophe models, which have been a significant advantage for us in helping our clients understand the changing risks that they deal with from a CAT standpoint. Most notably, with our wildfire models in California, many companies of whom availed themselves of, up until recently, California didn't allow them to be used as a basis for premium applications, but that is changing, and we're also investing in the platform that we have in our CAT modeling business to make the management and the assessment of the portfolio of risks that they have better, so hopefully, that gives you a sense of the kind of breadth of investment that we're making in our businesses. Right, and as part of that, one of the features of your financials has been this gradual migration away from transactional more into a subscription-based model, and not that transactional is a big piece of your income statement, but maybe can bridge the gap for us on that concept and talk to us about where you see that business mix moving over time. Sure, and if you look at our 2024 results, there are a number of impacts, most of which are contributing to that shift to greater subscription. One, to the earlier point, the investments that we are making in our Core Lines data sets and in our catastrophe models have naturally created stronger subscription growth because we're delivering more value. We're capturing more value. That's been validated by clients, both by us directly and indirectly from others that have spoken to the industry. So that is helping. That's a very positive trend. And we think that will be the primary driver that lifts slightly our subscription growth. I don't think we're going to go to 90% subscription growth, but we are seeing that impact from a stability standpoint, from a predictability standpoint. We also had some contracts that were in renewal and in transition. From an accounting standpoint, they had to be designated as transactional. Now they're reverting to their natural form on the subscription side. The other factor is that in some of the pricing strategies that we have discussed with some outside consultants, the view was that many of our clients would prefer to convert some of their transactional expenses into more subscription-based revenues. All of those are contributing to, I think, what should be a slow increase in the overall percentage of subscription, but not a dramatic change. Got it. So when you're dealing with the investments in these initiatives, it obviously requires its cash and investment. And you have yet this track record of margin expansion that's been pretty phenomenal. So when you're going about this process, how do you balance the need to reinvest in your business versus the ultimate outcome, which is expanding margins? And when we think about a three-year vision, is it the goal to expand margins every year, or do you hit an inflection point where the reinvestment piece overwhelms it and you sort of get to a static margin place? No, it's a great question and something that we spend a lot of time thinking about. I would start with the business just naturally, from a purely economic standpoint, has tremendous operating leverage. And at the heart, it's our model where we're able to make an investment in a data set or an analytic or a platform that we can leverage at scale across the insurance industry. And so there's just inherently very high incremental returns once you make that initial investment. And a lot of times, it's not a massive investment, so it doesn't tend to dent the margin in a significant way. So you start with that strength. And then we look across our businesses and determine what's necessary from an investment standpoint, both from a value maintenance as well as from a value creation standpoint. In Core Lines Reimagined, I think that was clearly an exercise of maintaining the value that we delivered. But we're also making investments in how we expand the value that we provide, for instance, in the claims ecosystem. Now, I think the short answer is that because of the strong operational leverage across the business, it gives us a lot of space to be able to do both, to be able to expand that margin as well as to invest significantly in maintaining the growth and expanding the growth opportunity for us. So we expect to be able, as we did, as we implied with our 2025 guidance, our 2024 margin was 54.7%. We've set a range of 55%-55.8% margin for 2025, reflecting that operating leverage, but also reflecting significant investment in a number of our businesses. Now, one factor that will influence that, that has been muted of late, has been the impact of acquisitions. Now, most acquisitions don't come in at 55% EBITDA margins. But we're evaluating the growth and what we can add value to leveraging our network. And so that may have a temporary impact. But we are generally looking at acquisitions that we have the ability to improve that operating leverage with our scale. So those are some of the factors that we think about. But I would say our general objective is to continue to express the operating leverage that we have in the business with consistent margin expansion. Right. Yeah. I imagine if your acquisitions had the similar margins, they'd be very expensive. Yes. So maybe, I mean, you brought it up. So maybe talk to us about how you're looking at the M&A pipeline. I imagine there's a lot of insurtech opportunities out there. And talk to us about what you see in the pipeline and how, when you get to someplace where you find a property that might work, what are the unique features about it that make it fit as a possibility inside Verisk? Sure. And it's been an area where certainly there are a lot of great ideas out there. And we've seen a lot of insurtech players that have come up with an application or an analytic or a platform that potentially adds value to the industry. But I think what they often find is that it is very challenging to penetrate the insurance industry. It is a large industry. There is a lot of investment that they need to make in technology and their infrastructure. It's a very complex, meaning you have a lot of different lines of business that operate with very distinct idiosyncrasies within the business. And that's a challenge for many of them. And the opportunity for us is because we have that connectivity, because we often have data sets that are relevant to that investment, we can take an acquisition and accelerate their penetration of the industry. So what we generally look for are companies that have traction with one or two significant clients where we can see that they are creating value. And if we believe that we have an opportunity to accelerate that penetration because our clients are comfortable with us from an operational standpoint, from a financial scale standpoint, they know that we are going to, we have the wherewithal to invest and improve that product, that often is a significant opportunity for us. And that's been the story behind a number of our acquisitions. Our acquisition of FAST, which provides Policy Administration Software to the life insurance industry, we had been thinking about, well, what are our opportunities for us in life? FAST had developed a low no-code solution that had been utilized by both traditional insurers as well as new owners of life and annuity portfolios coming from the private equity side. That was a great opportunity for us because I think 40% or so of our P&C client base also writes life. That has been clearly advantageous as they have been able to accelerate their growth. I've had dinners with clients of senior life insurance companies saying, "We really are thrilled that Verisk owns this because we think there's more that you can add on the data and the analytic side in addition to the support in growing it. In London, our acquisition of Sequel and Whitespace has created a platform that allows us to provide more connectivity across the industry and tying data sets and expertise into it, and what I've talked about in investment, we already have a number of products where we're integrating some of our underwriting data in the US, catastrophe modeling capabilities in the US into that platform, so those are the types of acquisitions that we're looking for. Valuations remain relatively high, but we're also seeing among a lot of the private equity industry, higher interest rates are putting a little bit more pressure on them to monetize some of those investments, so we're engaged. We're looking at it. We're going to focus on where we can really add value. You know, one of the features when you joined Verisk was this adherence to investments and getting the right return on the investments you made. And you mentioned the life business. Maybe you can talk to us about, as you look back on the life investment, the type of return it was able to generate for Verisk, because you didn't buy it at a 55% margin, but it's definitely been value added to the enterprise. So provide some perspective there. Sure. So I think that you go into these acquisitions recognizing that there is a lot of uncertainty, but you're trying to price it where you're balancing the growth opportunity and the return opportunity. But I think the fundamental mistake that you have to avoid is saying, OK, this is a great business. And on its own, with the premium that you pay, you're going to generate an adequate return in order to be able to, that you're going to generate an adequate return just on the existing business. The key is in identifying at the outset, what are we doing to add value? Because that becomes the fulcrum on which you really generate an attractive return. So in the case to FAST, it was premised on a belief that we really could accelerate their penetration into the industry. That was what was necessary to generate a return that to date has been well in excess of our cost of capital. Excellent. So I'm going to pivot to two pretty important areas that are discussed among your clients. First and foremost would be the California wildfires. We were talking a little bit about the beforehand, but it's going to turn out to be one of the largest catastrophe events inside the insurance industry in a long time, probably one of the top five, certainly top 10. Can you talk to us about how it's affecting your business? I know you introduced the Wildfire Modeling for your clients in California. Just give us some impressions on how you see this playing out over the next two years. Sure. And certainly, these are tragic events that have affected a lot of people in ways that we can't imagine. We focus on the fact that we are there to serve our clients, particularly with our claims processing capabilities. So you have that tragedy. I think the other tragic aspect of this is that it demonstrated some of the shortcomings of the insurance marketplace in California, and particularly the fact that the market up until recently didn't allow forward-looking models, catastrophe models, to be used as a basis for risk, and particularly in an inflationary environment and one in which we could see that there were increasing severity of events. And we were aware of the wildfire risk that the market wasn't allowed to reflect and price that risk into the equation. That's created the dynamic where capital is moving away from a market that desperately needs more capital. In terms of the impact on our business immediately, there is not a lot. Folks will say, well, you know, when you have a big hurricane, that seems to generate a lot of business on the claim side. That's because there are often repairs that adjusters and contractors need to make utilizing our systems. And so that generates more activity. In the event of wildfires, sadly, they are typically complete losses. And so they aren't utilizing our estimating capabilities, although they're using our platform, but that tends not to generate incremental revenue. So there is no short-term impact associated with that in the way that hurricanes will often generate some incremental activity for us. Longer term, however, I think certainly the integration and the acceptance of forward-looking models and catastrophe models across the state as a basis for rate adequacy and improved pricing is an opportunity for us, particularly with our wildfire models, but I think a variety of natural perils. Right. The other important topic, and it's not a new subject for anyone in this room, would be around artificial intelligence. And we've talked to a lot of your customers, and I know they're going through developing best use cases and trying to deploy it in a very thoughtful manner. But maybe you can spend a couple of minutes talking about how, first of all, you're using emerging technologies inside your business and then how you see it, how you see the insurance industry using these technologies to better their outcomes. Sure. It's a broad, we could probably spend 30 minutes just on that topic. So I'll try to keep it brief. I think from our perspective, this is clearly an incremental tool that facilitates the integration and the processing of data. And at dinner last night, I used this analogy that when we developed property estimating solutions, what we focused on was that we could increase the number of claims that an adjuster could process in a day, probably from two to three to five. And that was a significant productivity enhancement. And I think the opportunity for generative AI is to process and absorb a lot of the information in advance so that the claims professional, in the first instance, is able to process that more effectively, handle more claims, and do so more accurately. And that's probably the specific application that we have used in our casualty business to process large amounts of medical file data and identify what's important, what's salient, how do we factor that into the casualty claim aspect of it. So if we can elevate that productivity, then that's a real benefit for the insurance industry as they're processing it. The other ability is for generative AI to integrate nonstandard information from multiple sources to support decisioning. And there we are seeing more applications on the underwriting side. And so we already have a client live on what we refer to as an augmented underwriting solution that utilizes generative AI to integrate data sets and deliver more actionable information to the underwriter at their workbench, if you will. And so those are kind of two specific examples that are elevating productivity. Now, in our role, as I mentioned at the outset, our ability to make those investments, thinking across the industry, allow our clients to interact with them, even test them against some of the things that they are doing. I mean, they have the ability to say, well, here's what Verisk is doing, and we could potentially get the benefit of this more immediately and at a lower cost than the investments that we're making across the business. So I think that's the opportunity that we have traditionally played, that we are playing right now, and we expect will continue to generate new opportunities for us. We have currently over 40 generative AI applications that we are developing. We have had now two Verisk Gen AI days where we've pulled all of our artificial intelligence experts across the organization to share what they're doing to seed ideas on how it might be applied in a range of areas. I think that's produced a very fertile ground for us to find new ways to improve the productivity of these actions. We have products that are in the field that are being utilized by our clients to improve productivity. Excellent. Yes, it's a robust area for conversation. I guess we have just a minute left here. Just knocking off another topical item would be just what's going on with tariffs and the federal government. Do you see any impact in your business? Do you see any impact in the insurance industry from the political noise that's happening in the environment? Sure. So to be clear, and as we said on the call, federal contracts represent less than 1% of our total revenue. So it's not a significant exposure to us. And we don't see any impact of the tariff activity associated with us at this point. Certainly, the broader inflationary or economic impacts, difficult to discern. Naturally, on inflation, that will have to be reflected to some extent in premiums if there are higher costs or prices that evolve from that. But I think it's far too early to tell what the sustained duration of the tariffs are or what the economic consequences are going to be. But for our part, given the nature of our business, we do not believe we're materially exposed to the tariff situation.