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Verisk Analytics

Verisk AnalyticsVRSKEarnings & Financial Report

Nasdaq · Industrials · Research & Consulting Services

Verisk Analytics, Inc. is an American multinational data analytics and risk assessment firm based in Jersey City, New Jersey, with clients in insurance, government, and risk management sectors. The company uses proprietary data sets and industry expertise to provide predictive analytics and decision support consultations in areas including fraud prevention, actuarial science, insurance coverage, fire protection, catastrophe and weather risk, and data management.

What changed in Verisk Analytics's 10-K — 2022 vs 2023

Top changes in Verisk Analytics's 2023 10-K

409 paragraphs added · 380 removed · 275 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

102 edited+63 added−37 removed46 unchanged
The Energy business qualified as held for sale in the fourth quarter of 2022 and was classified as a discontinued operation per the guidance in ASC 205-20, Discontinued Operations , as we determined that this transaction represents a strategic shift that has or will have a major effect on our operations and financial results.
The Energy business qualified as held for sale in the fourth quarter of 2022 and was classified as a discontinued operation per the guidance in ASC 205-20, as we determined that this transaction represents a strategic shift that has or will have a major effect on our operations and financial results.
Intellectual Property We own a significant number of intellectual property rights, including copyrights, trademarks, trade secrets, and patents. Specifically, our policy language, insurance manuals, software, and databases are protected by both registered and common law copyrights; and the licensing of those materials to our customers for their use represents a large portion of our revenue.
Cybersecurity." Intellectual Property We own a significant number of intellectual property rights, including copyrights, trademarks, trade secrets, and patents. Specifically, our policy language, insurance manuals, software, and databases are protected by both registered and common law copyrights. and the licensing of those materials to our customers for their use represents a large portion of our revenue.
We believe that our P&C insurance industry expertise, and our ability to offer multiple applications, services, and integrated solutions to individual customers are competitive strengths. Development of New Solutions We take a market-focused team approach to developing our solutions. Our operating units are responsible for developing, reviewing, and enhancing our various products and services.
We believe that our P&C insurance industry expertise, and our ability to offer multiple applications, services, and integrated solutions to individual customers are competitive strengths. Development of New Solutions We take a market-focused team approach to developing our solutions. Our operating units are responsible for developing, reviewing, and enhancing our various solutions and services.
To maintain control of our intellectual property, we enter into contractual agreements with our customers, granting each customer permission to use our products and services, including our software and databases. This helps maintain the integrity of our proprietary intellectual property and to protect the embedded information and technology contained in our solutions.
To maintain control of our intellectual property, we enter into contractual agreements with our customers, granting each customer permission to use our solutions and services, including our software and databases. This helps maintain the integrity of our proprietary intellectual property and to protect the embedded information and technology contained in our solutions.
When a claim is submitted, our system searches our all-claims database and returns information about other claims filed by the same individuals or businesses (either as claimants or insureds) that helps our customers determine if fraud may be occurring.
When a claim is submitted, our system searches our claims database and returns information about other claims filed by the same individuals or businesses (either as claimants or insureds) that helps our customers determine if fraud may be occurring.
We delivered unique products and services to an expanding customer base that valued the comprehensiveness of our data and solutions as well as our full wallet-spend view of a consumer.
We delivered unique solutions and services to an expanding customer base that valued the comprehensiveness of our data and solutions as well as our full wallet-spend view of a consumer.
We believe our salespeople’s product knowledge, skills to develop relationships of trust, and local presence differentiate us from our competition. Subject matter experts work with salespeople on specific opportunities for their assigned products and segments. Salespeople manage the overall sales process and subject matter experts manage the rigorous integration and functional fit discussions to ensure mutual success and satisfaction.
We believe our salespeople’s product knowledge, skills to develop relationships of trust, and local presence differentiate us from our competition. Subject matter experts work with salespeople on specific opportunities for their assigned solutions and segments. Salespeople manage the overall sales process and subject matter experts manage the rigorous integration and functional fit discussions to ensure mutual success and satisfaction.
We consider our intellectual property to be proprietary, and we rely on a combination of statutory (for example, copyright, trademark, trade secret, and patent) and contractual safeguards in a comprehensive intellectual property enforcement program to protect it wherever it is used. We also own several patents and have several pending patent applications in the U.S. that complement our products.
We consider our intellectual property to be proprietary, and we rely on a combination of statutory (for example, copyright, trademark, trade secret, and patent) and contractual safeguards in a comprehensive intellectual property enforcement program to protect it wherever it is used. We also own several patents and have several pending patent applications in the U.S. that complement our solutions.
As a general practice, employees, contractors, and other parties with access to our proprietary information sign agreements that prohibit the unauthorized use or disclosure of our proprietary rights, information, and technology. 13 Table of Contents Human Capital Our global workforce is united by our mission to serve, add value, and innovate for our customers.
As a general practice, employees, contractors, and other parties with access to our proprietary information sign agreements that prohibit the unauthorized use or disclosure of our proprietary rights, information, and technology. 12 Table of Contents Human Capital Our global workforce is united by our mission to serve, add value, and innovate for our customers.
As a result, our industry-standard language also simplifies claim settlements and can reduce the occurrence of costly litigation because our language causes the meaning of coverage terminology to become established and known. Our policy language includes standard coverage language, endorsements, and policy writing support language that assist our customers in understanding the risks they assume and the coverages they offer.
As a result, our industry-standard language also simplifies claim settlements and can reduce the occurrence of costly litigation because our language causes the meaning of coverage terminology to become established and known. Our policy language includes standard coverage language, endorsements, and policy writing support language that assist our clients in understanding the risks they assume and the coverages they offer.
As part of our product development process, we continually solicit feedback from our customers on the value of our products and services and the market’s needs. We have established an extensive system of customer advisory panels that meet regularly throughout the year to help us respond effectively to the needs of our markets.
As part of our product development process, we continually solicit feedback from our customers on the value of our solutions and services and the market’s needs. We have established an extensive system of customer advisory panels that meet regularly throughout the year to help us respond effectively to the needs of our markets.
This approach gives our customers the opportunity to obtain the information they need from a single source and more easily integrate the information into their workflows. 11 Table of Contents Sales, Marketing, and Customer Support We sell our solutions and services primarily through direct interaction with our customers.
This approach gives our customers the opportunity to obtain the information they need from a single source and more easily integrate the information into their workflows. 10 Table of Contents Sales, Marketing, and Customer Support We sell our solutions and services primarily through direct interaction with our customers.
Nearly every property insurer in the U.S. uses our evaluations of community firefighting capabilities to help determine premiums for fire insurance throughout the country. We provide field-verified and validated data on the fire protection services for approximately 37,000 fire response jurisdictions.
Nearly every property insurer in the U.S. uses our evaluations of community firefighting capabilities to help determine premiums for fire insurance throughout the country. We provide field-verified and validated data on fire protection services for approximately 36,000 fire response jurisdictions.
We employ a three-tier sales structure that includes salespeople, technical consultants, and sales support. Within our company, several areas have sales teams that specialize in specific products and services. Those specialized sales teams sell specific, highly technical solution sets to targeted markets in coordination with account management.
We employ a three-tier sales structure that includes salespeople, technical consultants, and sales support. Within our Company, several areas have sales teams that specialize in specific solutions and services. Those specialized sales teams sell specific, highly technical solution sets to targeted markets in coordination with account management.
The public may read any materials filed by Verisk with the SEC on the SEC's Internet site (www.sec.gov), which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 15 Table of Contents
The public may read any materials filed by Verisk with the SEC on the SEC's Internet site (www.sec.gov), which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 14 Table of Contents
Further, our operations involving licensed advisory organization activities are subject to periodic examinations conducted by state regulators; and our operations and products are subject to state antitrust and trade practice statutes within or outside state insurance codes, which are typically enforced by state attorneys general and/or insurance regulators.
Further, our operations involving licensed advisory organization activities are subject to periodic examinations conducted by state regulators; and our operations and solutions are subject to state antitrust and trade practice statutes within or outside state insurance codes, which are typically enforced by state attorneys general and/or insurance regulators.
We believe many of our trademarks, trade names, service marks, and logos to be of material importance to our business, as they assist our customers in identifying our products and services and the quality that stands behind them.
We believe many of our trademarks, trade names, service marks, and logos to be of material importance to our business, as they assist our customers in identifying our solutions and services and the quality that stands behind them.
Many of our products, services, and operations as well as insurers' use of our services are subject to state rather than federal regulation by virtue of the McCarran-Ferguson Act. As a result, many of our operations and products are subject to review and/or approval by state regulators.
Many of our solutions, services, and operations as well as insurers' use of our services are subject to state rather than federal regulation by virtue of the McCarran-Ferguson Act. As a result, many of our operations and solutions are subject to review and/or approval by state regulators.
Our data management and production team designs and manages our processes and systems for market data procurement, proprietary data production, and quality control. Our teams support our efforts to create new information and products from available data and explore new methods of collecting data.
Our data management and production team designs and manages our processes and systems for market data procurement, proprietary data production, and quality control. Our teams support our efforts to create new information and solutions from available data and explore new methods of collecting data.
As such an advisory organization, we provide statistical, actuarial, policy language development, and related products and services to P&C insurers, including advisory prospective loss costs, other prospective cost information, manual rules, and policy language.
As such an advisory organization, we provide statistical, actuarial, policy language development, and related solutions and services to P&C insurers, including advisory prospective loss costs, other prospective cost information, manual rules, and policy language.
We serve our customers by providing state-of-the-art research, development, and analysis delivered in reports, data streams, and software solutions. We are dedicated to the advancement of the atmospheric and remote sensing science disciplines and directly addressing problems regarding weather, climate, and air quality as well as oceanography and the planetary sciences.
We serve our customers by providing advanced research, development, and analysis delivered in reports, data streams, and software solutions. We are dedicated to the advancement of the atmospheric and remote sensing science disciplines and directly addressing problems regarding weather, climate, and air quality as well as oceanography and the planetary sciences.
We are the owners of the derivative solutions we create using the data we collect. 12 Table of Contents Information Technology Technology Our information technology systems and the more recent adoption of cloud computing are fundamental to our success.
We are the owners of the derivative solutions we create using the data we collect. 11 Table of Contents Information Technology Technology Our information technology systems and the more recent adoption of cloud computing are fundamental to our success.
Laptops are encrypted, and media leaving our premises and sent to third-party storage facilities are also encrypted. Our commitment to security has earned ISO 27001:2013 Certification for our core data centers, which is an international standard for best practices associated with our Information Security Management System.
Laptops are encrypted, and media leaving our premises and sent to third-party storage facilities are also encrypted. Our commitment to security has earned ISO 27001:2013 Certification for our core data centers, which is an international standard for best practices associated with our Information Security Management System. See also "Item 1C.
Our models, which form the basis of our solutions, enable companies to identify, quantify, and plan for the financial consequences of catastrophes. We have developed models for hurricanes, earthquakes, winter storms, tornadoes, hailstorms, and floods in more than 110 countries as well as pandemics worldwide.
Our models, which form the basis of our solutions, enable companies to identify, quantify, and plan for the financial consequences of catastrophes. We have developed models for hurricanes, earthquakes, winter storms, tornadoes, hailstorms, wildfires, and floods in more than 120 countries, as well as for pandemics worldwide.
We also offer services to evaluate the effectiveness of community enforcement of building codes and the efforts of communities to mitigate damage from flooding. Further, we provide information on the insurance rating territories, premium taxes, crime risk, and hazards of windstorm, ea rthquake, wildfire, and other perils.
We also offer services to evaluate the effectiveness of community enforcement of building codes and the efforts of communities to mitigate damage from flooding. Further, we provide information on the insurance rating territories, premium taxes, crime risk, and hazards of windstorm, earthquake, wildfire, and other perils.
We provide solutions for every phase of a building’s life, including: • quantifying the ultimate cost of repair or reconstruction of damaged or destroyed buildings, • aiding in the settlement of insurance claims; and • tracking the process of repair or reconstruction and facilitating communication among insurers, adjusters, contractors, and policyholders.
We provide solutions for every phase of a building’s life, including: • quantifying the ultimate cost of repair or reconstruction of damaged or destroyed buildings for personal and commercial properties; • aiding in the settlement of insurance claims; and • tracking the process of repair or reconstruction and facilitating communication among insurers, adjusters, contractors, and policyholders.
We refer to these products and services as solutions due to the integration among our services and the flexibility that enables our customers to purchase components or a comprehensive package.
We refer to these products and services as solutions due to the integration among our services and the flexibility that enables our clients to purchase components or a comprehensive package.
We h ave developed a probabilistic terrorism model capable of quantifying the risk in the U.S. from this evolving threat, which supports pricing and underwriting decisions down to the level of an individual policy, as well as models for estimating losses to crop insurance programs in the U.S., Canada, and China.
We have developed a probabilistic terrorism model capable of quantifying the risk in the U.S. from this evolving threat, which supports pricing and underwriting decisions down to the level of an individual policy, as well as models for estimating losses to crop insurance programs in the U.S., Canada, India, and China.
Our solutions apply advanced predictive analytics to our deep reservoir of data and information to gauge the degree and cost of risk quickly and precisely, and our workflow tools help insurers increase speed and cost-efficiency while delivering superior customer experiences.
Our solutions apply advanced predictive analytics to our deep reservoir of data and information to gauge the degree and cost of risk quickly and precisely, and our workflow tools help insurers increase speed and cost-efficiency while enhancing customer experiences.
To meet our insurers' needs, we process approximately 2,300 regulatory filings and interface with state regulators in all 50 states plus the District of Columbia, Guam, Puerto Rico, and the Virgin Islands each year to ensure smooth implementation of our rules and forms.
To meet our clients’ needs, we process approximately 2,000 regulatory filings and interface with state regulators in all 50 states plus the District of Columbia, Guam, Puerto Rico, and the Virgin Islands each year to ensure smooth implementation of our rules and forms.
On October 28, 2022, we also entered into an equity purchase agreement to sell Wood Mackenzie, Inc. and Verisk New UK Holdco LP (together with their respective subsidiaries, our "Energy business"). The transaction closed on February 1, 2023.
On October 28, 2022, we also entered into an equity purchase agreement to sell Wood Mackenzie, Inc. and Verisk New UK Holdco LP (together with their respective subsidiaries, our “Energy business”). The transaction closed on February 1, 2023.
We assessed the sale of our environmental health and safety business and Financial Services segment per the guidance in ASC 205-20, Discontinued Operations , and determined that the transactions did not qualify as a discontinued operation because they did not, quantitatively or qualitatively, represent a strategic shift that has or will have a major effect on our operations and financial results.
We assessed the sale of 3E and Financial Services segment per the guidance in ASC 205-20, Discontinued Operations ("ASC 205-20"), and determined that the transactions did not qualify as a discontinued operation because they did not, quantitatively or qualitatively, represent a strategic shift that has or will have a major effect on our operations and financial results.
We also develop and utilize machine learned and artificially intelligent models to forecast scenarios and produce both standard and customized analytics that help our customers better manage their businesses, including detecting fraud before and after a loss event and quantifying losses. Our customers include most of the P&C insurance providers in the U.S.
We also develop and utilize machine-learned and artificially intelligent models to forecast scenarios and produce both standard and customized analytics that help our customers better manage their businesses, including detecting fraud before and after a loss event and quantifying losses. Our customers, acquired over more than 50 years, include most of the P&C insurance providers in the U.S.
These solutions take various forms, including proprietary data assets, expert industry insight, statistical models, tailored analytic object, and robust software platforms all designed to allow our customers to make more informed risk decisions. We believe our solutions for analyzing risk have a positive impact on our customers’ revenues and help them better manage their costs.
These solutions take various forms, including proprietary data assets, expert industry insight, statistical models, tailored analytic objects, and robust software platforms all designed to allow our clients to make more informed risk decisions. We believe our solutions for analyzing risk have a positive impact on our clients’ revenues and help them better manage their costs.
We also make our data and analytics available to commercial real estate lenders to allow them to better understand risks associated with people they lend against. 6 Table of Contents We are a leader in and pioneered the field of probabilistic catastrophe modeling used by insurers, reinsurers, financial institutions, and government to manage their risk from extreme events.
We also make our data and analytics available to commercial real estate lenders to allow them to better understand risks associated with people to whom they lend. 6 Table of Contents Extreme Event Solutions We are a leader in and pioneered the field of probabilistic catastrophe modeling used by insurers, reinsurers, intermediaries, financial institutions, and governments to manage their risk from extreme events.
On March 11, 2022 and April 8, 2022, we sold our environmental health and safety business, which represented the “specialized markets” in our Energy and Specialized Markets segment, and our Financial Services segment, respectively.
On March 11, 2022 and April 8, 2022, we sold 3E Company Environmental, Ecological and Engineering ("3E"), our environmental health and safety business, which represented the “specialized markets” in our Energy and Specialized Markets segment, and our Financial Services segment, respectively.
Our newest models offer risk management solutions for the cyber and casualty lines of business. We help businesses and governments better anticipate and monitor risks in Earth’s natural environment. We prepare certain agencies and companies to anticipate, manage, react to, and profit from climate- and weather-related risk.
Our newest models offer risk quantification solutions for the casualty line of business. We also help businesses and governments better anticipate and monitor risks in Earth’s natural environment. We prepare certain agencies and companies to anticipate, manage, react to, and profit from climate- and weather-related risk.
We also own in excess of 700 trademarks in the U.S. and foreign countries, including the names of our products and services and our logos and tag lines, many of which are registered.
We also own in excess of 600 trademarks in the U.S. and foreign countries, including the names of our solutions and services and our logos and tag lines, many of which are registered.
In 2022 , our customers included all of the top 100 property and casualty ("P&C") insurance providers in the U.S. for the lines of P&C services we offer. We believe that our commitment to our customers and the embedded nature of o ur solutions serve to strengthen and extend our relationships.
In 2023, our clients included all of the top 100 property and casualty ("P&C") insurance providers in the U.S. for the lines of P&C services we offer. We believe that our commitment to our clients and the embedded nature of our solutions serve to strengthen and extend our relationships.
The benefits of a single all-claims database include improved efficiency in reporting data and searching for information, enhanced capabilities for detecting suspicious claims, and superior information for investigating fraudulent claims, suspicious individuals, and possible fraud rings.
The benefits of an industrywide claims database include improved efficiency in reporting data and searching for information, enhanced capabilities for detecting suspicious claims, and superior information for investigating fraudulent claims, suspicious individuals, and possible fraud rings.
Insurers also use our solutions to finetune the accuracy of their rating models, to drive underwriting results through a set of analytical products that predict the relative risk and variation of major insurance perils including theft, flood, storm, fire, freeze, etc.
Insurers also use our solutions to help fine-tune the accuracy of their rating models and to enhance underwriting results through a set of analytical solutions that predict the relative risk and variation of major insurance perils, including theft, flood, storm, fire, freeze, etc.
We also compete with a variety of organizations that offer consulting services, primarily specialty technology and consulting firms. In addition, a customer may use its own internal resources rather than engage an outside firm for these services. Finally, our underwriting products compete with Lexis Nexis and Core Logic in the marketplace.
We also compete with a variety of organizations that offer consulting services, primarily specialty technology and consulting firms. In addition, a customer may use its own internal resources rather than engage an outside firm for these services. Our underwriting solutions compete with a variety of companies in the marketplace.
Item 1. Business Our Company Verisk is a leading data analytics provider serving customers in the insurance and energy market until February 1, 2023 when we completed the sale of our energy business. We also divested our specialized markets and financial services businesses in March 2022 and April 2022, respectively.
Item 1. Business Our Company Verisk is a leading data, analytics, and technology provider serving clients in the insurance ecosystem. We completed the sale of our Energy business on February 1, 2023. We also divested our specialized markets and financial services businesses in March 2022 and April 2022, respectively.
Our property-specific rating and underwriting information allows our customers to understand, quantify, underwrite, mitigate, and avoid potential loss for residential and commercial properties. Our database contains data and analytics on approximately 15.7 million commercial properties in the U.S.
Our property- and auto- specific rating and underwriting information allows our clients to understand, quantify, underwrite, mitigate, and avoid potential loss for these risks. Our database contains data and analytics on approximately 15.9 million commercial properties in the U.S.
Approximately 66% of our employees are based in the United States, 13% in the United Kingdom, 6% in India, with the remainder serving in 20 other countries across the globe. Very few of our employees are represented by unions or subject to collective bargaining agreements, only a small number of employees in Germany who are represented by a works council.
Approximately 62% of our employees are based in the United States, 12% in the United Kingdom, 8% in India, with the remainder serving in 18 other countries across the globe. Very few of our employees are represented by unions or subject to collective bargaining agreements, and only a small number of employees in Germany are represented by a works council.
We estimate that more than 80% of insurance repair contractors and service providers in the U.S. and Canada with computerized estimating systems use our building and repair pricing data. This large percentage leads to accurate reporting of pricing information, which we believe is unmatched in the industry.
Our structural repair and cleaning database contains approximately 21,000 unit-cost line items. We estimate that more than 80% of insurance repair contractors and service providers in the U.S. and Canada with computerized estimating systems use our building and repair pricing data. This large percentage leads to accurate reporting of pricing information, which we believe is unmatched in the industry.
We add to our offerings through an active acquisition program. Since 2018, we have acquired 26 businesses, which have allowed us to enter new markets, offer new solutions, and enhance the value of existing services with additional proprietary sources of data.
We add to our offerings through an active acquisition program. Since 2021, we have a cquired 13 businesses, w hich have allowed us to enter new markets, offer new solutions, and enhance the value of existing services with additional proprietary sources of data.
In the P&C insurance claims and catastrophe modeling markets, certain products are offered by a number of companies, including Risk Management Solutions (catastrophe modeling), CoreLogic (repair cost estimating), LexisNexis ® Risk Solutions (claims investigative reports), SAS (claims fraud analytics), and Enlyte (injury claims analytics).
In the P&C insurance claims and catastrophe modeling markets, certain products are offered by a number of companies in the areas of catastrophe modeling, repair cost estimating, claims investigative reports, claims fraud analytics, and injury claims analytics.
Our customers can use our estimates of future costs in making independent decisions about the prices charged for their policies. For most P&C insurers in most lines of business, we believe that our estimates of future costs are an essential input to rating decisions.
We make a number of actuarial adjustments before the data is used to estimate future costs. Our clients can use our estimates of future costs in making independent decisions about the prices charged for their policies. For most P&C insurers in most lines of business, we believe that our estimates of future costs are an essential input to rating decisions.
Starting in 2021, we have introduced a common global wellbeing day across the enterprise to recognize the importance of the total wellbeing of our workforce. In addition, in 2022, we have introduced Juneteenth, as a U.S. holiday to recognize this significant milestone in U.S. history. We have a culture of continuous learning and improvement.
Starting in 2021, we introduced a common global wellbeing day across the enterprise to recognize the importance of the total wellbeing of our workforce. In addition, in 2022, we introduced Juneteenth as a U.S. holiday to recognize this significant milestone in U.S. history. In 2023, career development across the Company was prioritized.
On May 23, 2008, in contemplation of our initial public offering ("IPO"), ISO formed Verisk Analytics, Inc. ("Verisk"), a Delaware corporation, to be the holding company for our business. Verisk was initially formed as a wholly owned subsidiary of ISO.
Insurers used and continue to use our offerings primarily in their product development, underwriting, and rating functions. On May 23, 2008, in contemplation of our initial public offering ("IPO"), ISO formed Verisk Analytics, Inc. ("Verisk"), a Delaware corporation, to be the holding company for our business. Verisk was initially formed as a wholly owned subsidiary of ISO.
Using advanced technologies to collect and analyze billions of records, we draw on unique data assets and deep domain expertise to provide innovations that may be integrated into customer workflows. We offer predictive analytics and decision support solutions to customers in rating, underwriting, claims, catastrophe, weather risk, and many other fields.
Using advanced technologies to collect and analyze billions of records, we draw on unique data assets, insurance industry knowledge, and technological expertise to provide valuable solutions that are integrated into client workflows. We offer predictive analytics and decision support solutions to clients in rating, underwriting, claims, catastrophe, weather risk, and many other fields.
We have a staff of approximately 500 field representatives strategically located around the U.S. who observe and report on conditions at commercial and residential properties, evaluate community fire-protection capabilities and assess the effectiveness of municipal building-code enforcement. Each year, our field staff visits more than 317,000 commercial properties to collect information on new buildings and verify building attributes.
We have a staff of approximately 500 field representatives strategically located around the U.S. who observe and report on conditions at commercial and residential properties, evaluate community fire-protection capabilities, and assess the effectiveness of municipal building-code enforcement.
The majority of our people worked remotely in 2021 but moved to a hybrid work policy in 2022 with at least 2 days in the office. We saw increased collaboration and engagement as a result of this move. Our employee engagement score for 2022 is at 77%.
The majority of our people worked remotely in 2021 but moved to a hybrid work policy in 2022 and 2023 with at least 2 days in the office. Senior leaders moved to 3 days in the office in 2023. We saw increased collaboration and engagement as a result of these moves.
Through research conducted by our in-house scientific staff, and often in collaboration with world-renowned scientists at academic and other research institutions, we have developed analytical tools to help measure and observe environmental properties and translate those measurements into actionable information. We have begun to expand our footprint of data and solutions to include both U.S. and international markets.
Through research conducted by our in-house scientific staff, and often in collaboration with prominent scientists at academic and other research institutions, we have developed analytical tools to help measure and observe environmental properties and translate those measurements into actionable information.
To help our customers estimate repair costs, we provide a solution that assists contractors and insurance adjusters in estimating repairs using a patented plan-sketching program. The program allows our customers to manually sketch floor, roof, and wall framing plans based upon their own measurements and automatically calculates material and labor quantities for all desired construction or repairs to the structure.
To help our customers estimate repair costs, we provide a solution that assists contractors and insurance adjusters in estimating repairs using a patented plan-sketching program that automatically calculates material and labor quantities for all desired construction or repairs to a structure based on user inputs.
Our virtual claims adjusting tools help improve policyholder satisfaction and save on loss adjustment expense. These tools simplify collaboration among claims professionals, contractors, and policyholders as they work together remotely and efficiently. Real-time video collaboration, remote measuring tools, AI-powered damage assessment, and image analytics fraud warnings are just a few of the advantages we deliver through these solutions.
Our virtual claims-adjusting tools help improve policyholder satisfaction, reduce human error, and save on loss adjustment expense. These tools simplify collaboration among claims professionals, contractors, and policyholders as they work together remotely and efficiently. These cloud-based and on-premise solutions include real-time video collaboration, remote measuring tools, generative AI-powered damage assessment, and image analytics fraud warnings, among other features.
In addition, our actuarial consultants provide customized services for our customers that include assisting them with the development of independent insurance programs, analysis of their own underwriting experience, development of classification systems and rating plans, and a wide variety of other business decisions. We also supply information to various customers in other markets, including reinsurance and government agencies.
We distribute a number of actuarial solutions and offer flexible services to meet our clients’ needs. In addition, our actuarial consultants provide customized services for our clients that include assisting them with the development of independent insurance programs, analysis of their own underwriting experience, development of classification systems and rating plans, and a wide variety of other business decisions.
We offer competitive salaries, short and long-term incentives and the opportunity for advancement. In addition, our program includes paid time off (“PTO”), flextime and telecommuting options, and a 401(k) program with a 100% company cash match (up to 6%).
In addition, our program includes paid time off (“PTO”), flextime and telecommuting options, and a 401(k) program with a 100% company cash match (up to 6%).
We also provide our customers access to price lists, which include structural repair and restoration pricing for 468 separate economic areas in North America. We revise this information monthly, and as often as weekly in the aftermath of major disasters, to reflect rapid price changes. Our structural repair and cleaning database contains approximately 21,000 unit-cost line items.
We also provide our customers access to price lists, which include structural repair and restoration pricing for 468 separate economic areas in North America based on direct market surveys and analysis of actual customer claim experience. We revise this information monthly, and as often as weekly in the aftermath of major disasters, to reflect rapid price changes.
To create an outstanding employee experience, leaders understand and act on their results and insights, and continuously communicate with employees through town halls and local engagement events. 14 Table of Contents Regulation Because our business involves the distribution of certain personal, public, and nonpublic data to businesses and governmental entities that make eligibility, service, and marketing decisions based on such data, certain of our solutions and services are subject to regulation under federal, state, and local laws in the U.S. and, to a lesser extent, in foreign countries.
Regulation Because our business involves the distribution of certain personal, public, and nonpublic data to businesses and governmental entities that make eligibility, service, and marketing decisions based on such data, certain of our solutions and services are subject to regulation under federal, state, and local laws in the U.S. and, to a lesser extent, in foreign countries.
Verisk common stock began trading on the NASDAQ Global Select Market on October 7, 2009, under the ticker symbol “VRSK.” 4 Table of Contents Segments Our operating segments have historically been Insurance, Energy and Specialized Markets, and Financial Services.
On October 6, 2009, in connection with our IPO, we effected a reorganization whereby ISO became a wholly owned subsidiary of Verisk. Verisk common stock began trading on the NASDAQ Global Select Market on October 7, 2009, under the ticker symbol “VRSK.” Segments Our operating segments have historically been Insurance, Energy and Specialized Markets, and Financial Services.
We also continue to curate self-paced learning resources and create real-time opportunities for employees to take charge of their development and learn from each other. All employees have access to our world-class virtual learning platform, which features thousands of of courses taught by industry experts, ranging from public speaking, to balancing work and personal life, to data science fundamentals.
Throughout this year of change and steady improvement, we continued to have an engaged employee population. We continued to curate self-paced learning resources and create real-time opportunities for employees to take charge of their development and learn from each other. All employees have access to our world-class virtual learning platform, which features thousands of courses taught by industry experts.
Using our large database of premium and loss data, our actuaries are able to perform sophisticated analyses using our predictive models and analytic methods to help our P&C insurance customers with pricing, loss reserving, and marketing. We distribute a number of actuarial solutions and offer flexible services to meet our customers’ needs.
Using our large database of premium and loss data, we provide actuarial services to help our clients analyze and price their risks. Our actuaries are able to perform sophisticated analyses using our predictive models and analytic methods to help our P&C insurance clients with pricing, loss reserving, and market analysis.
They must also make sure their policies remain competitive by promptly changing coverages in response to changes in statutes, case law, or regulatory requirements.
Insurance companies need to ensure that their policy language, rules, and rates comply with all applicable legal and regulatory requirements. They must also make sure their policies remain competitive by promptly changing coverages in response to changes in statutes, case law, or regulatory requirements.
As of 2022, there were eight networks: the Verisk Women's Network, the Verisk Pride Network, the Verisk Veterans and Military Service Members Network, the Verisk REACH Network (dedicated to empowering Black employees), the Verisk Parents Network, the Verisk Unidos Network (promoting awareness of Hispanic and Latinx culture), the Verisk Asian Network, and the Verisk Accessibility Network.
We currently have eight networks: the Verisk Women's Network, the Verisk Pride Network, the Verisk Veterans and Military Service Members Network, the Verisk REACH Network (dedicated to empowering Black employees), the Verisk Parents Network, the Verisk Unidos Network (promoting awareness of Hispanic and Latinx culture), the Verisk Asian Network, the Verisk Accessibility Network, and the recently added Verisk Indigenous Network, launched to commemorate National Day for Truth and Reconciliation in September.
Our international small and medium size commercial lines casualty solutions help customers digitally transform, enabling straight through processing and underwriting. In addition to property data and solutions, customers benefit from decision and benchmarking analytics using firmographic, technographic, and business intelligence, and proprietary management competency scores.
In addition to property data and solutions, clients can benefit from decision and benchmarking analytics using firmographic, technographic, and business intelligence and proprietary management competency scores, delivered digitally to enable straight through processing.
Our database also helps insurers fulfill their regulatory compliance reporting requirements at both the state and federal levels for delinquent child support liens and other required checks. The database contains information for more than 1.6 billion claim records and is the world’s largest database of P&C claims information used for claims processing and investigations.
Our database also helps insurers fulfill their regulatory compliance reporting requirements at both the state and federal levels for delinquent child-support liens and other required checks.
Customers access our claims ecosystem to enhance their business and operations. For example, they can tap into our weather API for near-real-time updates and valuable insights for responding to weather perils that can impact their policyholders and their business.
Customers access our ecosystem for enhanced claims handling and analysis. For example, they can use our weather API for near-real-time updates and valuable insights for responding to weather perils that can impact their policyholders and their business. They can also use our data insights to analyze and benchmark their performance against peers in the industry and to manage claims assignments.
We have more than 211 specialized lawyers and insurance experts reviewing changes in each state’s insurance rules and regulations, including an average of approximately 8,200 legislative actions, 7,400 regulatory actions, and 2,000 court decisions per year, to make any required changes to our policy language and rating information. 5 Table of Contents To cover the wide variety of risks in the marketplace, we offer a broad range of policy programs.
With these policy programs, insurers also benefit from economies of scale. We have more than 240 insurance experts and specialized lawyers reviewing changes in each state’s insurance rules and regulations, including an average of approximately 14,800 legislative actions, 12,500 regulatory actions, and 2,000 court decisions per year, to make any required changes to our policy language and rating information.
See Note 11 . Dispositions and Discontinued Operation for further discussion. Insurance Segment Our Insurance segment primarily serves our P&C insurance customers and focuses on the prediction of loss, the selection and pricing of risk, and compliance with their reporting requirements in each U.S. state in which they operate.
Insurance Segment We now operate in one segment, Insurance, which primarily serves our P&C insurance customers across most personal and commercial lines of business, focusing on the fundamental building blocks of insurance programs, the prediction of loss, the selection and pricing of risk, and compliance with their reporting requirements in each U.S. state in which they operate.
We encounter competition from a number of sources, including insurers that develop internal technology and actuarial methods for proprietary insurance programs.
Our Insurance segment operates primarily in the U.S. P&C insurance industry. We have a number of competitors in specific lines or services. We encounter competition from a number of sources, including insurers that develop internal technology and actuarial methods for proprietary insurance programs.
For example, we developed a digital media database that allows customers to view prior-loss images on claim matches so they can detect pre-existing damage on new claims.
A claims adjuster or investigation professional can use our comprehensive case management system to manage claim investigations. We continually pursue new solutions that help our customers keep abreast of changing markets and technology. For example, we developed a digital media database that allows customers to view prior-loss images on claim matches so they can detect pre-existing damage on new claims.
Our cutting-edge image forensics can detect suspicious claim-related photos and our customers can flag stolen and synthetic identities in the database to help subscribers deter that type of fraud. 8 Table of Contents Energy and Specialized Markets Segment Up until the conclusion of the Energy Sale on February 1, 2023, we were a leading provider of data analytics across the natural resources value chain including the global energy, chemicals, metals and mining, and power and renewables sectors.
Energy and Specialized Markets Segment Up until the sale of our Energy business on February 1, 2023, we were a leading provider of data analytics across the natural resources value chain including the global energy, chemicals, metals and mining, and power and renewables sectors.
We continue to invest in our people worldwide by encouraging all employees to reach their full potential through our focus on learning, providing competitive compensation and benefits, and our culture anchored on innovation, collaboration, and inclusion. As a knowledge-based business, we carefully integrate the skills and talents of approximately 7,000 employees worldwide as of December 31, 2022.
We continue to invest in our people worldwide by encouraging all employees to reach their full potential through our focus on learning, providing competitive compensation and benefits, and our culture anchored on our purpose driven values of results, learning, and caring.
We support and implement a mix of technologies and focus on implementing the most efficient technology for any given business requirement or task. Data Centers We have two primary data centers in Somerset, New Jersey, and Lehi, Utah, creating redundancy and back up capabilities. In addition, we have data centers located in other states dedicated to certain business units.
We support and implement a mix of technologies and focus on implementing the most efficient technology for any given business requirement or task. Data Centers In 2023, with our migration to cloud computing, we closed our Lehi, Utah Data Center. We have plans to close our Somerset, New Jersey facility in the first half of 2024.
We project customers' future losses and loss expenses using a broad set of data. Those projections tend to be more reliable than if our customers used their own data exclusively. We make a number of actuarial adjustments before the data is used to estimate future costs.
We also supply information to various clients in other markets, including reinsurance and government agencies. We project clients' future losses and loss expenses using a broad set of data. Those projections tend to be more reliable than if our clients used their own data exclusively.
In the United States ("U.S.") and around the world, we help customers protect people, property, and financial assets. Our customers use our solutions to make better decisions about risk and opportu nities with greater efficiency and discipline.
In the United States (“U.S.”) and around the world, we help clients protect individuals, communities, and businesses. Our clients use our solutions to make better decisions about risk and improve operating efficiency.
The international enhanced commercial and residential property models and enriched data sets help insurers with triage, reconstruction value, risk selection, pricing, benchmarking, and portfolio management across multiple insured segments, with an emphasis on residential and commercial property.
Additionally, our international market provides services to much of the Lloyd's of London market, while also serving clients in Continental Europe, Singapore, China, Australia, and New Zealand. The international enhanced commercial and residential property models and enriched data sets help insurers with triage, reconstruction value, risk selection, pricing, benchmarking, and portfolio management across multiple insured segments.
Our anti-fraud solutions improve our customers’ profitability by predicting the likelihood that fraud may be occurring and detecting suspicious activity after it has occurred.
Anti-Fraud Solutions We are a leading provider of fraud-detection tools for the P&C insurance industry. Our anti-fraud solutions can improve our customers’ profitability by predicting the likelihood that fraud may be occurring and by detecting suspicious activity after it has occurred. Our claims database lends significant support to the fight against insurance fraud.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Our existing corporate structure and tax positions have been implemented in a manner in which we believe is compliant with current prevailing tax laws. However, changes in existing tax laws or rulings, including Federal, State and International, could have a significant impact on our effective tax rate, cash tax positions and deferred tax assets and liabilities.
Our existing corporate structure and tax positions have been implemented in a manner which we believe is compliant with current prevailing tax laws. However, changes in existing tax laws or rulings, including Federal, State and International, could have a significant impact on our effective tax rate, cash tax positions and deferred tax assets and liabilities.
If a substantial number of data sources, or certain key sources, were to withdraw or be unable to provide their data, or if we were to lose access to data due to government regulation or if the collection of data became uneconomical, our ability to provide solutions to our customers could be impacted, which could materially adversely affect our business, reputation, financial condition, operating results, and cash flows.
If a substantial number of data sources, or certain key sources, were to withdraw or be unable to provide their data, or if we were to lose access to data due to government regulation, decline in reputation or if the collection of data became uneconomical, our ability to provide solutions to our customers could be impacted, which could materially adversely affect our business, reputation, financial condition, operating results, and cash flows.
Such litigation could result in substantial costs and diversion of resources and could harm our business, financial condition, results of operations, and cash flows. Regulatory developments could negatively impact our business. Because personal, public and non-public information is stored in some of our databases, we are vulnerable to government regulation and adverse publicity concerning the use of our data.
Such litigation could result in substantial costs and diversion of resources and could harm our business, financial condition, results of operations, and cash flows. Regulatory developments could negatively impact our business. Because personal, public and non-public information is stored in some of our data repositories, we are vulnerable to government regulation and adverse publicity concerning the use of our data.
Even in the absence of an attempt to effect a change in management or a takeover attempt, these provisions may adversely affect the prevailing market price of our common stock if they are viewed as discouraging takeover attempts in the future. 25 Table of Contents
Even in the absence of an attempt to effect a change in management or a takeover attempt, these provisions may adversely affect the prevailing market price of our common stock if they are viewed as discouraging takeover attempts in the future. 23 Table of Contents
Despite efforts to ensure the integrity of our systems and implement controls, processes, policies and other protective measures, we may not be able to anticipate or detect all security breaches, nor may we be able to implement guaranteed preventive measures against such security breaches.
Despite efforts to ensure the integrity of our systems and implement controls, processes, policies and other protective measures, we may not be able to anticipate or detect all security breaches or fraudulent access attempts, nor may we be able to implement guaranteed preventive measures against such security breaches or fraudulent access attempts.
As of December 31, 2022, our ten largest shareholders owned 40.3% of our common stock, including 2.5% of our common stock owned by our Employee Stock Ownership Plan or ESOP.
As of December 31, 2023 , our ten largest shareholders owned 40.3% of our common stock, including 2.5% of our common stock owned by our Employee Stock Ownership Plan or ESOP.
If users gain improper access to our databases, they may be able to steal, publish, delete or modify confidential third-party information that is stored or transmitted on our networks.
If users gain improper access to our data repositories, they may be able to steal, publish, delete or modify confidential third-party information that is stored or transmitted on our networks.
During the year ended December 31, 2022, approximately 69% of our revenue was derived from solutions provided to U.S. P&C primary insurers. Also, our invoices for certain of our solutions are linked in part to premiums in the U.S.
During the year ended December 31, 2023, approximately 69% of our re venue was derived from solutions provided to U.S. P&C primary insurers. Also, our invoices for certain of our solutions are linked in part to premiums in the U.S.
The anticipated benefits of many of our acquisitions may not materialize. Future acquisitions or dispositions could result in the incurrence of debt, contingent liabilities or amortization expenses, or write-offs of goodwill and other intangible assets, any of which could harm our financial condition. We typically fund our acquisitions through our debt facilities.
The anticipated benefits of many of our acquisitions may not materialize. Future acquisitions or dispositions could result in the incurrence of debt, contingent liabilities or amortization expenses, or write-offs of goodwill and other intangible assets, any of which could harm our financial condition. We may incur substantial additional indebtedness in connection with future acquisitions.
The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market, or the perception that these sales could occur.
Risks Related to Our Common Stock If there are substantial sales of our common stock, our stock price could decline. The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market, or the perception that these sales could occur.
All of these risks could result in increased costs or decreased revenues, either of which could have a material adverse effect on our financial condition, results of operations and cash flows. We are subject to the increased risk of exchange rate fluctuations.
All of these risks could result in increased costs or decreased revenues, either of which could have a material adverse effect on our financial condition, results of operations and cash flows.
To the extent that customers choose not to obtain solutions from us and instead rely on information obtained at little or no cost from these public sources, our business and results of operations may be adversely affected. Our senior leadership team is critical to our continued success and the loss of such personnel could harm our business.
To the extent that customers choose not to obtain solutions from us and instead rely on information obtained at little or no cost from these public sources, our business and results of operations may be adversely affected.
Even if we succeed in developing a relationship with a potential new customer, we may not be successful in obtaining contractual commitments after the selling cycle or in maintaining contractual commitments after the implementation cycle, which may have a material adverse effect on our business, results of operations and financial condition.
Even if we succeed in developing a relationship with a potential new customer, we may not be successful in obtaining contractual commitments after the selling cycle or in maintaining contractual commitments after the implementation cycle, which may have a material adverse effect on our business, results of operations and financial condition. 15 Table of Contents We could lose our access to data from external sources, which could prevent us from providing our solutions.
Security breaches in our facilities, computer networks, and databases may cause harm to our business and reputation and result in a loss of customers. Many of our solutions involve the storage and transmission of proprietary information and sensitive or confidential data.
Security breaches in our facilities, computer networks, and data repositories may cause harm to our business and reputation and result in a loss of customers. Many of our solutions involve the storage and transmission of proprietary information and sensitive or confidential data, which are significantly complex with various uses across businesses and locations.
The following legal and regulatory developments also could have a material adverse effect on our business, financial position, results of operations or cash flows: • amendment, enactment, or interpretation of laws and regulations which restrict the access and use of personal information and reduce the supply of data available to customers; • changes in cultural and consumer attitudes to favor further restrictions on information collection and sharing, which may lead to regulations that prevent full utilization of our solutions; • failure of our solutions to comply with current and future laws and regulations; and • failure of our solutions to adapt to changes in the regulatory environment in an efficient, cost-effective manner. 22 Table of Contents Our financial position may be impacted by audit examinations or changes in tax laws or tax rulings.
The following legal and regulatory developments also could have a material adverse effect on our business, financial position, results of operations or cash flows: • amendment, enactment, or interpretation of laws and regulations which restrict the access and use of personal information and reduce the supply of data available to customers; • changes in cultural and consumer attitudes to favor further restrictions on information collection and sharing, which may lead to regulations that prevent full utilization of our solutions; • failure of our solutions to comply with current and future laws and regulations; and • failure of our solutions to adapt to changes in the regulatory environment in an efficient, cost-effective manner. 20 Table of Contents We are subject to antitrust, consumer protection, intellectual property and other litigation, as well as governmental investigations, and may in the future become further subject to such litigation and investigations; an adverse outcome in such litigation or investigations could have a material adverse effect on our financial condition, revenues and profitability.
There has been substantial litigation and other proceedings, particularly in the U.S., regarding patent and other intellectual property rights in the information technology industry. There is a risk that we are infringing, or may in the future infringe, the intellectual property rights of third parties. We have, from time-to-time, been subject to litigation alleging intellectual property infringement.
There is a risk that we are infringing, or may in the future infringe, the intellectual property rights of third parties. We have, from time-to-time, been subject to litigation alleging intellectual property infringement.
Even if the direct financial impact of such litigation or investigations is not material, settlements or judgments arising out of such litigation or investigations could include further restrictions on our ability to conduct business, including potentially the elimination of entire lines of business, which could increase our cost of doing business and limit our prospects for future growth. 23 Table of Contents Risks Related to International Operations We are subject to competition in many of the markets in which we operate and we may not be able to compete effectively.
Even if the direct financial impact of such litigation or investigations is not material, settlements or judgments arising out of such litigation or investigations could include further restrictions on our ability to conduct business, including potentially the elimination of entire lines of business, which could increase our cost of doing business and limit our prospects for future growth.
Governmental agencies in particular have increased the amount of information to which they provide free public access. Public sources of free or relatively inexpensive information may reduce the demand for our solutions.
Public sources of free or relatively inexpensive information have become increasingly available recently, particularly through the Internet, and this trend is expected to continue. Governmental agencies in particular have increased the amount of information to which they provide free public access. Public sources of free or relatively inexpensive information may reduce the demand for our solutions.
As with other global companies, our systems are regularly subject to cyber-attacks, cyber-threats, attempts at fraudulent access, physical break-ins, computer viruses, attacks by hackers and similar disruptive problems.
With a large number of inter-related systems, keeping the technology current and managing vulnerabilities is challenging. As with other global companies, our systems are regularly subject to cyber-attacks, cyber-threats, attempts at fraudulent access, physical break-ins, computer viruses, attacks by hackers and similar disruptive problems.
Pursuant to our equity incentive plans, options to purchase approximately 4,037,798 shares of common stock were outstanding as of February 24, 2023.
Pursuant to our equity incentive plans, options to purchase approximately 2,732,670 shares of common stock were outstanding as of February 16, 2024.
Any damage to our or our third-party service provider’s data centers, failure of our telecommunications links or inability to access these telesales centers or websites could cause interruptions in operations that materially adversely affect our ability to meet customers’ requirements, resulting in decreased revenue, operating income and earnings per share. 21 Table of Contents Risks Related to Legal, Regulatory and Compliance Matters We will continue to rely upon proprietary technology rights, and if we are unable to protect them, our business could be harmed.
Any damage to our or our third-party service provider’s data centers, failure of our telecommunications links or inability to access these telesales centers or websites could cause interruptions in operations that materially adversely affect our ability to meet customers’ requirements, resulting in decreased revenue, operating income and earnings per share.
As a result, these competitors may be in a better position to anticipate and respond to changing customer preferences, emerging technologies and market trends.
Due to their size, certain competitors may be able to allocate greater resources to a particular market segment than we can. As a result, these competitors may be in a better position to anticipate and respond to changing customer preferences, emerging technologies and market trends.
In particular, the increased leverage could increase our vulnerability to sustained, adverse macroeconomic weakness, limit our ability to obtain further financing and limit our ability to pursue other operational and strategic opportunities.
In particular, the increased leverage could increase our vulnerability to sustained, adverse macroeconomic weakness, limit our ability to obtain further financing and limit our ability to pursue other operational and strategic opportunities. Further, the Federal Reserve has increased its benchmark interest rate multiple times in 2023 in a bid to reduce rising inflation rates in the United States.
A significant additional decline in the value of assets for which risk is transferred in market transactions could have an adverse impact on the demand for our solutions. We may incur substantial additional indebtedness in connection with future acquisitions.
A significant additional decline in the value of assets for which risk is transferred in market transactions could have an adverse impact on the demand for our solutions. Our financial position may be impacted by audit examinations or changes in tax laws or tax rulings.
We may also invest further to upgrade our systems in order to compete. If we fail to successfully compete, our business, financial position and results of operations may be adversely affected. Our operations are subject to additional risks inherent in international operations.
We may also invest further to upgrade our systems in order to compete. If we fail to successfully compete, our business, financial position and results of operations may be adversely affected. To the extent the availability of free or relatively inexpensive information increases, the demand for some of our solutions may decrease.
Any of these developments could materially adversely affect our business, financial condition, operating results, and cash flows. 17 Table of Contents If we are unable to develop successful new solutions or if we experience defects, failures and delays associated with the introduction of new solutions, our business could suffer serious harm.
If we are unable to develop successful new solutions or if we experience defects, failures and delays associated with the introduction of new solutions, our business could suffer serious harm. Our growth and success depend upon our ability to develop and sell new solutions.
Some markets in which we operate or which we believe may provide growth opportunities for us are highly competitive, and are expected to remain highly competitive. We compete on the basis of quality, customer service, product and service selection, and pricing.
Strategic and Operational Risks Related to Our Business We are subject to competition in many of the markets in which we operate and we may not be able to compete effectively. Some markets in which we operate or which we believe may provide growth opportunities for us are highly competitive, and are expected to remain highly competitive.
Risks Related to Our Business We could lose our access to data from external sources, which could prevent us from providing our solutions. We depend upon data from external sources, including data received from customers and various government and public record services, for information used in our databases.
We depend upon data from external sources, including data received from customers and various government and public record services, for information used in our data repositories. In general, we do not own the information in these data repositories, and the participating organizations could discontinue contributing information to the data repositories.
In addition, media or other reports of perceived security vulnerabilities to our systems or those of our third-party suppliers, even if no breach has been attempted or occurred, could also adversely impact our reputation and materially impact our business. 20 Table of Contents We could face claims for intellectual property infringement, which if successful could restrict us from using and providing our technologies and solutions to our customers.
In addition, media or other reports of perceived security vulnerabilities to our systems or those of our third-party suppliers, even if no breach has been attempted or occurred, could also adversely impact our reputation and materially impact our business. 18 Table of Contents We may lose key business assets, through the loss of data center capacity or the interruption of telecommunications links, the internet, or power sources, which could significantly impede our ability to do business.
Our competitive position in various market segments depends upon the relative strength of competitors in the segment and the resources devoted to competing in that segment. Due to their size, certain competitors may be able to allocate greater resources to a particular market segment than we can.
We compete on the basis of quality, customer service, product and service selection, and pricing. Our competitive position in various market segments depends upon the relative strength of competitors in the segment and the resources devoted to competing in that segment.
In addition, our tax positions are impacted by fluctuations in our earnings and financial results in the various countries in which we do business.
In addition, our tax positions are impacted by fluctuations in our earnings and financial results in the various countries in which we do business. Cybersecurity and Product/Technology Risks Related to Our Business Fraudulent or unpermitted data access and other cyber-security or privacy breaches may negatively impact our business and harm our reputation.
Increased competition for employees could have an adverse effect on our ability to expand our business and service our customers, as well as cause us to incur greater personnel expenses and training costs. 18 Table of Contents General economic, political and market forces and dislocations beyond our control could reduce demand for our solutions and harm our business.
Increased competition for employees could have an adverse effect on our ability to expand our business and service our customers, as well as cause us to incur greater personnel expenses and training costs. Physical and transition risks associated with climate change and its consequences could disrupt operations, threaten the safety of employees, or negatively impact our financial performance.
Tax audit examinations with an adverse outcome could have a negative effect in the jurisdictions in which we operate. Furthermore, the Organization for Economic Co-operation and Development (OECD) released its Base Erosion and Profit Shifting (BEPS) action plans which may also lead to future tax reform that could affect our results.
Tax audit examinations with an adverse outcome could have a negative effect in the jurisdictions in which we operate. Furthermore, the Organization for Economic Co-operation and Development (OECD) has issued Pillar Two model rules for a global minimum tax of 15% that has been agreed upon in principle by over 140 countries.
The increased leverage, potential lack of access to financing and increased expenses could have a material adverse effect on our financial condition, results of operations and cash flows. 19 Table of Contents Risks Related to Our Intellectual Property and Cybersecurity Fraudulent or unpermitted data access and other cyber-security or privacy breaches may negatively impact our business and harm our reputation.
These interest rate increases have resulted in higher short-term and long-term borrowing costs. The increased leverage, potential lack of access to financing and increased expenses could have a material adverse effect on our financial condition, results of operations and cash flows. There may be consolidation in our end customer market, which could reduce the use of our services.
Removed
In addition to the effects of the COVID-19 pandemic and resulting global disruptions on our business and operations discussed in Item 7 of Part II, "Management's Discussion Analysis of Financial Condition and Results of Operations," and in the risk factors below, additional or unforeseen effects from the COVID-19 pandemic and the global economic climate may give rise to or amplify many of the risks discussed below.
Added
We are also reliant on internal controls of third parties to ensure the accuracy of their data. If a third party suffers reputational damage from an underlying issue, we may discontinue using their services.
Removed
In general, we do not own the information in these databases, and the participating organizations could discontinue contributing information to the databases.
Added
Any of these developments could materially adversely affect our business, financial condition, operating results, and cash flows. 17 Table of Contents Financial and Economic Risks Related to Our Business General economic, political and market forces and dislocations beyond our control could reduce demand for our solutions and harm our business.
Removed
In addition, some of our customers have been, and in the future may continue to be, stockholders of our company.
Added
Although we do not expect Pillar Two to materially increase our tax expense, the ultimate impact will depend on the implementation of specific rules in each jurisdiction. Accordingly, we will continue to monitor global legislative action for potential impacts.
Removed
If our customers’ percentage of ownership of our common stock decreases, or they cease to be stockholders of our company, there can be no assurance that our customers will continue to provide data to the same extent or on the same terms.
Added
A technology vendor that provides critical services, such as cloud-based infrastructure, creates a single point of failure resulting in pricing or contract lock-in risk. As our operations migrate to a cloud-based information technology infrastructure and delivery model (distributed computing infrastructure platform for business), systems are consolidated into a smaller number of large infrastructure suppliers.
Removed
Although we have capacity under committed facilities, those may not be sufficient. Therefore, future acquisitions may require us to obtain additional financing through debt or equity, which may not be available on favorable terms or at all and could result in dilution.
Added
We cannot easily switch cloud providers, meaning that any disruption of or interference with our use of a particular supplier, would impact our operations and our business would be adversely impacted. Any of the few of these suppliers could suffer an outage which would in turn result in an outage for one or more of our products.
Removed
In addition, to the extent we cannot identify or consummate, on terms acceptable to us, acquisitions that are complementary or otherwise attractive to our business, we may experience difficulty in achieving future growth. There may be consolidation in our end customer market, which could reduce the use of our services.
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These suppliers could also be subject to regulatory actions, or conflicts of interest which could force us to seek alternative suppliers in a short time period, at an economic disadvantage. Generative AI use by our customers or other third parties could result in the replacement of our existing products and/or solutions or the reduction of their relevance.
Removed
Our growth and success depend upon our ability to develop and sell new solutions.
Added
For a subset of our products we rely on proprietary or copyrighted material which could be fed into generative AI large language models without our knowledge. This could result in duplication of our products or solutions by generative AI tools and reduce the relevance or value proposition of such products or solutions.
Removed
To the extent the availability of free or relatively inexpensive information increases, the demand for some of our solutions may decrease. Public sources of free or relatively inexpensive information have become increasingly available recently, particularly through the Internet, and this trend is expected to continue.
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Our own use of AI, including but not limited to generative AI, to enhance our products could lead to unanticipated consequences such as ethical, compliance, privacy-observing, bias-reducing, and/or intellectual property issues.
Removed
Our future success substantially depends on the continued service and performance of the members of our senior leadership team. These personnel possess business and technical capabilities that are difficult to replace. However, as a general practice we do not enter into employee contracts with the members of our senior management operating team, except for certain limited situations.
Added
Increasing use of AI, including but not limited to generative AI models, in our internal systems may create new attack methods for adversaries and raise ethical, technological, legal, regulatory, and other challenges, which may negatively impact our brands and demand for our products and services.
Removed
If we lose key members of our senior management operating team, we may not be able to effectively manage our current operations or meet ongoing and future business challenges, and this may have a material adverse effect on our business, results of operations and financial condition.
Added
Our business policies and internal security controls may not keep pace with these changes as new threats emerge, or the emerging cybersecurity regulations in jurisdictions worldwide. Additionally, we are actively adding new generative AI features to our services.
Removed
Further, the Federal Reserve has increased its benchmark interest rate multiple times in 2022 in a bid to reduce rising inflation rates in the United States, and it is expected that additional rate hikes may be adopted in the future. These interest rate increases have resulted in higher short-term and long-term borrowing costs.
Added
Because the generative AI landscape is developing and inherently risky, no assurance can be given that such strategies and offerings will be successful or will not harm our reputation, financial condition, and operating results. Product features that rely on generative AI may be susceptible to unanticipated security threats from sophisticated adversaries.
Removed
We may lose key business assets, through the loss of data center capacity or the interruption of telecommunications links, the internet, or power sources, which could significantly impede our ability to do business.
Added
We use analytical models to assist our customers in key areas, such as underwriting, claims, reserving, and catastrophe risks, but actual results could differ materially from the model outputs and related analyses. We use various modeling techniques (e.g., scenarios, predictive, stochastic and/or forecasting) and data analytics to analyze and estimate exposures, loss trends and other risks associated with our products.
Removed
We are subject to antitrust, consumer protection, intellectual property and other litigation, as well as governmental investigations, and may in the future become further subject to such litigation and investigations; an adverse outcome in such litigation or investigations could have a material adverse effect on our financial condition, revenues and profitability.
Added
We use the modeled outputs and related analyses to assist customers with decision-making (e.g., underwriting, pricing, claims, reserving, reinsurance, and catastrophe risk). The modeled outputs and related analyses are subject to various assumptions, uncertainties, model errors and the inherent limitations of any statistical analysis, including the use of historical internal and industry data.
Removed
As a result of our operations outside of the U.S., we face greater exposure to movements in currency exchange rates, which may cause our revenue and operating results to differ materially from expectations. Our operating results could be negatively affected depending on the amount of revenue and expense denominated in foreign currencies.
Added
In addition, the modeled outputs and related analyses may occasionally contain inaccuracies, perhaps in material respects, including as a result of inaccurate inputs or applications thereof. Climate change and other variables may make modeled outcomes less certain or produce new, non-modeled risks. Consequently, actual results may differ materially from our modeled results.
Removed
As exchange rates vary, revenue, cost of revenue, operating expenses, and other operating results, when remeasured in U.S. dollars, may differ materially from expectations.
Added
If, based upon these models or other factors, we provide inaccurate information to customers, or overestimate the risks we are exposed to, new business growth and retention of our existing business may be adversely affected which could have an adverse effect on our results of operations and financial condition. 19 Table of Contents Legal, Regulatory and Compliance Risks Related to Our Business We will continue to rely upon proprietary technology rights, and if we are unable to protect them, our business could be harmed.
Removed
Although we may apply certain strategies to mitigate foreign currency risk, these strategies may not eliminate our exposure to foreign exchange rate fluctuations and would involve costs and risks of their own, such as ongoing management time and expertise, external costs to implement the strategies and potential accounting implications. 24 Table of Contents Risks Related to Our Common Stock If there are substantial sales of our common stock, our stock price could decline.
Added
We could face claims for intellectual property infringement, which if successful could restrict us from using and providing our technologies and solutions to our customers. There has been substantial litigation and other proceedings, particularly in the U.S., regarding patent and other intellectual property rights in the information technology industry.
Added
We are subject to extensive procurement laws and regulations, including those that enable the U.S. government to terminate contracts for convenience. Our business and reputation could be adversely affected if we or those we do business with fail to comply with or adapt to existing or new procurement laws and regulations which are constantly evolving.
Added
We and others with which we do business must comply with laws and regulations relating to the award, administration and performance of U.S. government contracts. Government contract laws and regulations affect how we do business with our customers and impose certain risks and costs on our business.
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A violation of these laws and regulations by us, our employees, or others working on our behalf, such as a supplier or a joint venture partner, could harm our reputation and result in the imposition of fines and penalties, the termination of our contracts, suspension or debarment from bidding on or being awarded contracts, loss of our ability to perform services and civil or criminal investigations or proceedings.
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In addition, costs to comply with new government regulations can increase our costs, reduce our margins, and adversely affect our competitiveness. Government contract laws and regulations can impose terms, obligations or penalties that are different than those typically found in commercial transactions.
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One of the significant differences is that the U.S. government may terminate any of our government contracts, not only for default based on our performance, but also at its convenience. Generally, prime contractors have a similar right under subcontracts related to government contracts.
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If a contract is terminated for convenience, we typically would be entitled to receive payments for our allowable costs incurred and the proportionate share of fees or earnings for the work performed.
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However, to the extent insufficient funds have been appropriated by the U.S. government to a particular program to cover our costs upon a termination for convenience, the U.S. government may assert that it is not required to appropriate additional funding.
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If a contract is terminated for default, the U.S. government could make claims to reduce the contract value or recover its procurement costs and could assess other special penalties, in some cases in excess of the contract value, exposing us to liability and adversely affecting our ability to compete for future contracts and orders.
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In addition, the U.S. government could terminate a prime contract under which we are a subcontractor, notwithstanding the fact that our performance and the quality of the products or services we delivered were consistent with our contractual obligations as a subcontractor. Similarly, the U.S. government could indirectly terminate a program or contract by not appropriating funding.
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The decision to terminate programs or contracts for convenience or default could adversely affect our business and future financial performance. 21 Table of Contents General Risk Factors related to our Business Our operations are subject to additional risks inherent in international operations.
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With operations in 19 countries, we provide servi ces to the insurance industry worldwide, including operations in various developing nations.
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Both current and future foreign operations could be adversely affected by unfavorable geopolitical developments, including legal and regulatory changes; tax changes; changes in trade policies; changes to visa or immigration policies; regulatory restrictions; government leadership changes; political events and upheaval; sociopolitical instability; social, political or economic instability resulting from climate change; and nationalization of our operations without compensation.
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Adverse activity in any one country could negatively impact operations, increase our loss exposure under certain of our insurance products, and could, otherwise, have an adverse effect on our business, liquidity, results of operations, and financial condition depending on the magnitude of the events and our net financial exposure at that time in that country.
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While we seek to be a strategic partner to the global insurance industry in analyzing risks related to climate change and building resilience, we recognize that there are inherent risks wherever business is conducted.

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Item 2. Properties

Properties — owned and leased real estate

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As of December 31, 2022, our principal offices consisted of the following properties: Location Square Feet Lease Expiration Date Jersey City, New Jersey 352,765 December 31, 2033 Lehi, Utah 200,000 January 31, 2024 Boston, Massachusetts 115,271 November 30, 2030 London, United Kingdom 50,677 November 29, 2030 Houston, Texas 45,867 April 30, 2034 We also lease offices in 21 states in the U.S., and offices outside the U.S. to support our international operations in Australia, Bahrain, Brazil, Canada, China, Costa Rica, Czech Republic, Denmark, France, Germany, India, Indonesia, Ireland, Israel, Italy, Japan, Kazakhstan, Malaysia, Mexico, Nepal, Netherlands, Poland, Singapore, South Korea, Spain, the United Arab Emirates, and the U.K.
As of December 31, 2023, our principal offices consisted of the following properties: Location Square Feet Lease Expiration Date Jersey City, New Jersey 352,765 December 31, 2033 Lehi, Utah 124,986 April 30, 2031 Boston, Massachusetts 115,271 November 30, 2030 Hyderabad, India 92,442 September 30, 2028 London, United Kingdom 50,677 November 29, 2030 Krakow, Poland 21,519 June 30, 2028 We also lease offices in 16 states in the U.S., and 18 offices outside the U.S. to support our international operations in Australia, Canada, China, Costa Rica, France, Germany, India, Ireland, Italy, Japan, Nepal, Poland, Republic of Korea, Singapore, Spain, Singapore, Sweden, and UK.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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COMPARISON OF CUMULATIVE TOTAL RETURN Assumes $100 Invested on December 31, 2017 Assumes Dividend Reinvested Fiscal Year Ended December 31, 2022 Recent Sales of Unregistered Securities We had no unregistered sales of equity securities during 2022. 27 Table of Contents Issuer Purchases of Equity Securities Under the Repurchase Program, we may repurchase stock in the market or as otherwise determined by us.
COMPARISON OF CUMULATIVE TOTAL RETURN Assumes $100 Invested on December 31, 2018 Assumes Dividend Reinvested Fiscal Year Ended December 31, 2023 Recent Sales of Unregistered Securities We had no unregistered sales of equity securities during 2023. 26 Table of Contents Issuer Purchases of Equity Securities Under the Repurchase Program, we may repurchase stock in the market or as otherwise determined by us.
The g raph assumes that the value of investment in our common stock and each index was $100 at December 31, 2017 and that all cash dividends were reinvested.
The graph assumes that the value of investment in our common stock and each index was $100 at December 31, 2018 and that all cash dividends were reinvested.
Cash dividends of $195.2 million and $188.2 million were paid during the years ended December 31, 2022 and 2021 and recorded as a reduction to retained earnings, respectively. We have a publicly announced share repurchase plan and repurchased a total of 73,354,544 shares since our IPO through December 31, 2022.
Cash dividends of $196.8 million and $195.2 million were paid during the years ended December 31, 2023 and 2022 and recorded as a reduction to retained earnings, respectively. We have a publicly announced share repurchase plan and repurchased a total of 86,204,465 shares since our IPO through December 31, 2023.
O n February 16, 2022, April 27, 2022, July 27, 2022, and October 26, 2022, our Board approved a cash dividend of $0.31 per share of common stock issued and outstanding to the holders of record as of March 15, 2022, June 15, 2022, September 15, 2022, and December 15, 2022, respectively.
On February 14, 2023, April 25, 2023, July 26, 2023, and October 25, 2023, our Board approved a cash dividend of $0.34 per share of common stock issued and outstanding to the holders of record as of March 15, 2023, June 15, 2023, September 15, 2023, and December 15, 2023, respectively.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Verisk trades under the ticker symbol “VRSK” on the NASDAQ Global Select Market. As of Februar y 24, 2023, there were approximately 76 stock holders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Verisk trades under the ticker symbol “VRSK” on the NASDAQ Global Select Market. As of February 16, 2024, there were approximately 74 stockholders of record.
Upon the final settlement of this ASR agreement in February of 2023, we received additional shares of 247,487 as determined by the daily volume weighted average share price of our common stock of $176.68 during the term of this ASR agreement. 28 Table of Contents
Upon the final settlement of this ASR agreement in February 2024, we received 178,227 additional shares as determined by the daily volume weighted average share price of our common stock of $237.71 during the term of this ASR agreement. 27 Table of Contents
(2) In December 2022, we entered into an ASR agreement to repurchase shares of our common stock for an aggregate purchase price of $250.0 million with Bank of America USA, NA. The ASR agreement is accounted for as a treasury stock transaction and a forward stock purchase agreement indexed to our common stock.
(2) In December 2023, we entered into an additional ASR agreement to repurchase shares of our common stock for an aggregate purchase price of $250.0 million with Goldman Sachs & Co. LLC. The ASR agreement is accounted for as a treasury stock transactions and a forward sto ck purchase agreement indexed to our common stock.
Upon the payment of the aggregate purchase price of $250.0 million on December 14, 2022, we received 1,168,224 shares of our common stock at a price of $182.01 per share, representing an initial delivery of approximately 85 percent of the aggregate purchase price.
Upon payment of the aggregate purchase price on December 14, 2023, we received an initial delivery of 873,479 shares of our common stock at an initial price of $243.28 per share, representing approximately 85 percen t of the aggregate purchase price.
Our share repurchases for the quarter-ended December 31, 2022 are set forth below: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) October 1, 2022 through October 31, 2022 469,126 (1) $ 170.53 (1) 469,126 $ 307.5 November 1, 2022 through November 30, 2022 353,069 $ 180.04 353,069 $ 763.9 December 1, 2022 through December 31, 2022 1,561,472 (1,2) $ 182.56 (1,2) 1,561,472 $ 441.3 2,383,667 (1,2) $ 179.82 (1,2) 2,383,667 _______________ (1) I n September 2022, we entered into an ASR agreement to repurchase shares of our common stock for an aggregate purchase price of $100.0 million with HSBC Bank USA, N.A.
O ur share repurchases for the quarter ended December 31, 2023 are set forth below: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) October 1, 2023 through October 31, 2023 — — — $ 891.5 November 1, 2023 through November 30, 2023 — — — $ 891.5 December 1, 2023 through December 31, 2023 1,738,711 (1,2) $ 225.76 (1,2) 1,738,711 $ 641.5 1,738,711 (1,2) $ 225.76 (1,2) 1,738,711 _______________ (1) In March 2023, we entered into Accelerated Share Repurchase ("ASR") agreements to repurchase shares of our common stock for an aggregate purchase price of $2.5 billion with Citibank, N.A. and Goldman Sachs & Co.
Upon final settlement in December 2022, we received an additional 108,508 shares as determined by the daily volume weighted average share price of our common stock during the term of the ASR agreement, bringing the total shares received under this ASR agreement to 577,634 and a final average price paid of $173.12 per share.
Upon the final settlement of this ASR agreement in December of 2023, we received 865,232 additional shares, as determined by the daily volume weighted average share price of our common stock of $217.00 during the term of these ASR agreements.
These authorizations have no expiration dates and may be suspended or terminated at any time. As of December 31, 2022, we had $441.3 million available to repurchase shares, inclusive of the $1,000 million authorization approved by the board on February 16, 2022 and $500 million authorization approved by the board on November 8, 2022.
These authorizations have no expiration dates and may be suspended or terminated at any time. As of December 31, 2023, we had $641.5 million available to re purchase shares, being the remaining unused portion of a $3.0 billion authorization, which became effective on February 1, 2023.
As of December 31, 2022, we had 389,301,902 shares of treasury stock. Performance Graph The graph below compares the cumulative total stockholder return on $100 invested in our common stock, with the cumulative total return on $100 invested in the S&P 500 index and an aggregate of peer issuers in our industry.
Performance Graph The graph below compares the cumulative total stockholder return on $100 invested in our common stock, with the cumulative total return on $100 invested in the S&P 500 index, an aggregate index of our proxy peers used in our Notice of Annual Meeting of Stockholders and Proxy Statement filed with the Securities and Exchange Commission on April 7, 2023 and an aggregate index of our proxy peer used in our Notice of Annual Meeting of Stockholders and Proxy Statement to be filed within 120 days of December 31, 2023 (the "Proxy Statement").
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The peer issuers used for this graph are Black Knight, Inc., CoreLogic Inc.
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As of December 31, 2023, we had 400,694,309 shares of treasury stock.
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The ASR agreement is accounted for as a treasury stock transaction and a forward stock purchase agreement indexed to our common stock. Upon the payment of the aggregate purchase price of $100.0 million on October 3, 2022, we received 469,126 shares of our common stock at a price of $170.53 per share.
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In the transition year, the table and the graph below include both the prior and the new indices of peer companies.
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The new peer issuers used for this graph are Black Knight, Inc., Nasdaq Inc., CoStar Group Inc., Equifax Inc., Fair Isaac Corp., Gartner, Inc., Global Payments, Inc., Clarivate PLC, Intercontinental Exchange, Inc., Jack Henry & Associates Inc., Moody’s Corporation, MSCI Inc., S&P Global, and TransUnion. The old peer issuers used for this graph are Black Knight, Inc., CoreLogic Inc.
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LLC, respectfully. The ASR agreements are accounted for as treasury stock transactions and forward stock purchase agreements indexed to our common stock.
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Upon payment of the aggregate purchase price on March 7, 2023, we received an initial delivery of an aggregate of 10,655,301 shares of our common stock at an initial price of $187.70 per share, representing approximately 80 percent of the aggregate purchase price.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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These increases were partially offset by decreases in data costs of $4.7 million, professional consulting fees of $0.9 million and other operating cost of $0.7 million.
These increases were partially offset by decreases in data costs of $4.7 million, professional consulting fees of $0.9 million, and other operating cost of $0.7 million.
The increase in professional consulting costs is primarily due to the release of the previously established EVT Litigation Reserve once the final payment was made in the fourth quarter of 2021 (the original accrual for this matter was recorded as part of SGA). These increases were partially offset by decreases of other operating costs of $0.2 million.
This increase in professional consulting costs is primarily due to the release of the previously established EVT Litigation Reserve once the final payment was made in the fourth quarter of 2021 (the original accrual for this matter was recorded as part of SGA). These increases were partially offset by decreases of other operating costs of $0.2 million.
Financing Activities Net cash used in financing activities of $1,330.2 million for the year ended December 31, 2022 was primarily related to repurchases of common stock of $1,662.5 million, repayment of our $350.0 million 4.125% senior notes on September 12, 2022, and dividend payments of $195.2 million, partially offset by proceeds under our Bilateral Term Loan Credit Facility of $125.0 million, proceeds from our Bilateral Revolving Credit Facility of $275.0 million, proceeds, net of repayments of debt under our Syndicated Credit Facility of $380.0 million and proceeds from stock options exercised of $132.5 million.
Net cash used in financing activities of $1,330.2 million for the year ended December 31, 2022 was primarily related to repurchases of common stock of $1,662.5 million, repayment of our $350.0 million 4.125% senior notes on September 12, 2022, and dividend payments of $195.2 million, partially offset by proceeds under our Bilateral Term Loan Credit Facility of $125.0 million, proceeds from our Bilateral Revolving Credit Facility of $275.0 million, proceeds, net of repayments of debt under our Syndicated Credit Facility, of $380.0, million and proceeds from stock options exercised of $132.5 million.
Our claims revenues increased $50.7 million or 7.8%. 2022 2021 Percentage change Percentage change excluding recent acquisitions, businesses held for sale and disposition (in millions) Underwriting & rating $ 1,734.5 $ 1,555.1 11.5 % 5.9 % Claims 702.5 651.8 7.8 % 5.6 % Total Insurance $ 2,437.0 $ 2,206.9 10.4 % 5.8 % Our recent acquisitions (Data Driven Safety, LLC, Infutor Data Solutions, LLC, and Opta Information Intelligence Corp. within the underwriting & rating category of the Insurance segment, ACTINEO GmbH, Automated Insurance Solutions Ltd. and Pruvan Inc., within the claims category of the Insurance segment) contributed net revenues of $101.8 million, while the remaining Insurance revenues increased $128.3 million or 5.8%.
Our claims revenues increased $50.7 million or 7.8%. 2022 2021 Percentage change Percentage change excluding recent acquisitions, businesses held for sale and disposition (in millions) Underwriting $ 1,734.5 $ 1,555.1 11.5 % 5.9 % Claims 702.5 651.8 7.8 % 5.6 % Total Insurance $ 2,437.0 $ 2,206.9 10.4 % 5.8 % Our recent acquisitions (Data Driven Safety, LLC, Infutor Data Solutions, LLC, and Opta Information Intelligence Corp. within the underwriting category of the Insurance segment, ACTINEO GmbH, Automated Insurance Solutions Ltd. and Pruvan Inc., within the claims category of the Insurance Segment) contributed net revenues of $101.8 million, while the remaining Insurance revenues increased $128.3 million or 5.8%.
Our underwriting & rating revenues increased $91.8 million or 5.9% primarily due to an annual increase in prices derived from continued enhancements to the content of the solutions within our industry-standard insurance programs as well as selling expanded solutions to existing customers within commercial and personal lines. In addition, catastrophe modeling services contributed to the growth.
Our underwriting revenues increased $91.8 million or 5.9% primarily due to an annual increase in prices derived from continued enhancements to the content of the solutions within our industry-standard insurance programs as well as selling expanded solutions to existing customers within commercial and personal lines. In addition, catastrophe modeling services contributed to the growth.
Our recent acquisitions (Data Driven Safety, LLC, Infutor Data Solutions, LLC, and Opta Information Intelligence Corp. within the underwriting & rating category of the Insurance segment, ACTINEO GmbH, Automated Insurance Solutions Ltd. and Pruvan Inc., within the claims category of the Insurance segment) and dispositions (the Specialized Markets segment and the Financial Services segment) reduced net revenues by $93.8 million.
Our recent acquisitions (Data Driven Safety, LLC, Infutor Data Solutions, LLC, and Opta Information Intelligence Corp. within the underwriting category of the Insurance segment, ACTINEO GmbH, Automated Insurance Solutions Ltd. and Pruvan Inc., within the claims category of the Insurance segment) and dispositions (the Specialized Markets segment and the Financial Services segment) reduced net revenues by $93.8 million.
EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization of fixed and intangible assets. We calculate EBITDA margin as EBITDA divided by revenues. The respective nearest applicable GAAP financial measures are net income and net income margin.
EBITDA and EBITDA margin are non-GAAP financial measures. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization of fixed and intangible assets. We calculate EBITDA margin as EBITDA divided by revenues. The respective nearest applicable GAAP financial measures are net income and net income margin.
The catastrophes of 2020 included hurricane Laura and the Midwest derecho, as well as multiple wildfires in the Western states, while the most notable events of 2021 included the winter storm in February that left much of Texas without power and Hurricane Ida in August.
The catastrophes of 2020 included Hurricane Laura and the Midwest derecho, as well as multiple wildfires in the Western states. The most notable events of 2021 included the winter storm in February that left much of Texas without power and Hurricane Ida in August.
In Florida specifically, the high overall claim risk, as evidenced by Ian, combined with the litigious environment poses an even greater risk to insurers who have faced two consecutive years with significant net underwriting losses.
In Florida specifically, the high overall claim risk, as evidenced by Ian, combined with the litigious environment in the state poses an even greater risk to insurers who have faced two consecutive years with significant net underwriting losses.
Investing Activities Net cash provided by investing activities of $301.4 million for the year ended December 31, 2022 was primarily related to the $1,073.3 million in proceeds from the sale of 3E and our Financial Services segment, partially offset by acquisitions and purchase of non-controlling interest, including escrow funding associated with these acquisitions, of $451.2 million, capital expenditures of $274.7 million and investments in nonpublic companies of $46.0 million.
Net cash used in investing activities of $301.4 million for the year ended December 31, 2022 was primarily related to the $1,073.3 million in proceeds from the sale of 3E and our Financial Services segment, partially offset by acquisitions and purchase of non-controlling interest, including escrow funding associated with these acquisitions, of $451.2 million, capital expenditures of $274.7 million, and investments in nonpublic companies of $46.0 million.
Interest Expense Interest expense was $138.8 million for the year ended December 31, 2022 compared to $127.0 million for the year ended December 31, 2021 , an increase of $11.8 million or 9.3%.
Interest Expense, net Interest expense was $138.8 million for the year ended December 31, 2022 compared to $127.0 million for the year ended December 31, 2021 , an increase of $11.8 million or 9.3%.
We have no obligation to update any forward-looking statements after the date hereof, except as required by applicable federal securities law. This discussion includes a comparison of our results of operations, liquidity and capital resources, financing and financing capacity and cash flow for the years ended December 31, 2022 and 2021 .
We have no obligation to update any forward-looking statements after the date hereof, except as required by applicable federal securities law. This discussion includes a comparison of our results of operations, liquidity and capital resources, financing and financing capacity and cash flow for the years ended December 31, 2023 and 2022 .
We offer predictive analytics and decision support solutions to customers in rating, underwriting, claims, catastrophe and weather risk, global risk analytics, and many other fields. In the U.S., and around the world, we help customers protect people, property, and financial assets. Refer to Item 1 . Business for further discussion.
We offer predictive analytics and decision support solutions to clients in rating, underwriting, claims, catastrophe and weather risk, global risk analytics, and many other fields. In the U.S., and around the world, we help clients protect people, property, and financial assets. Refer to Item 1 . Business for further discussion.
Refer to the Results of Operations by Segment within this section for more information regarding our revenues. 2022 2021 Percentage change Percentage change excluding recent acquisitions, businesses held for sale and disposition (in millions) Insurance $ 2,437.0 $ 2,206.9 10.4 % 5.8 % Energy and Specialized Markets 22.4 112.8 (80.1 )% — % Financial Services 37.6 142.8 (73.7 )% — % Total revenues $ 2,497.0 $ 2,462.5 1.4 % 5.8 % Cost of Revenues Cost of revenues was $824.6 million for the year ended December 31, 2022 compared to $853.7 million for the year ended December 31, 2021 , an decrease of $29.1 million or 3.4% .
Refer to the Results of Operations by Segment within this section for more information regarding our revenues. 2022 2021 Percentage change Percentage change excluding recent acquisitions, businesses held for sale and disposition (in millions) Insurance $ 2,437.0 $ 2,206.9 10.4 % 5.8 % Specialized Markets 22.4 112.8 (80.1 )% — % Financial Services 37.6 142.8 (73.7 )% — % Total revenues $ 2,497.0 $ 2,462.5 1.4 % 5.8 % Cost of Revenue Cost of revenues was $824.6 million for the year ended December 31, 2022 compared to $853.7 million for the year ended December 31, 2021 , a decrease of $29.1 million or 3.4%.
As a result of this factor, as well as the availability of funds under our Syndicated Credit Facility (as defined below) and the Bilateral Revolving Credit Facility (as defined below), we believe we will have sufficient cash to meet our working capital, human capital and capital expenditure needs, and to fuel our future growth plans.
As a result of this factor, as well as the availability of funds under our Syndicated Credit Facility (as defined below), we believe we will have sufficient cash to meet our working capital, human capital and capital expenditure needs, and to fuel our future growth plans.
Our customers use our solutions to make better decisions about risk and opportunities with greater efficiency and discipline. We refer to these products and services as “solutions” due to the integration among our services and the flexibility that enables our customers to purchase components or the comprehensive package.
Our clients use our solutions to make better decisions about risk and opportunities with greater efficiency and discipline. We refer to these products and services as “solutions” due to the integration among our services and the flexibility that enables our clients to purchase components or the comprehensive package.
See a description of our 2022 dispositions and businesses held for sale below and Note 11 . Dispositions and Discontinued Operations to our consolidated financial statements included in this annual report on Form 10-K for further discussions.
See a description of our 2023 dispositions and businesses held for sale below and Note 11 . Dispositions and Discontinued Operations to our consolidated financial statements included in this annual report on Form 10-K for further discussions.
The decrease is primarily related to the sale of our environmental health and safety business ("3E") and Financial Services segment, as well as an increase in tax payments of $310.8 million primarily due to the gain on the sale of 3E, partially offset by an impairment related to the Financial Services segment and the Energy business of $243.4 million and the prior year settlement of our EVT litigation reserve of $75.0 million.
The decrease is primarily related to the sale of 3E and Financial Services segment, as well as an increase in tax payments of $310.8 million primarily due to the gain on the sale of 3E, partially offset by an impairment related to the Financial Services segment and the Energy business of $243.4 million and the prior year settlement of our EVT litigation reserve of $75.0 million.
Growth in P&C insurers’ direct written premiums is cyclical, with total industry premium growth receding from a peak of 14.8% in 2002 to a trough of negative 3.1% in 2009 and subsequently recovering to 5.1% in 2019. In 2020, industry premium growth declined to 2.3% due to the COVID-19 pandemic.
Growth in P&C insurers’ direct written premiums has been cyclical, with total industry premium growth receding from a peak of 14.8% in 2002 to a trough of negative 3.1% in 2009 and subsequently recovering to 5.1% in 2019. In 2020, industry premium growth declined to 2.3% due to the COVID-19 pandemic.
Related to the unrecognized tax benefits, we also have recorded a liability for potential penalties and interest of $0.4 million. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements.
Related to the unrecognized tax benefits, we also have recorded a liability for potential penalties and interest of $0.2 million. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements.
Net cash used in investing activities of $592.0 million for the year ended December 31, 2021 was primarily related to acquisitions, including escrow funding associated with these acquisitions, of $299.0 million, capital expenditures of $268.4 million, and investments in nonpublic companies of $23.6 million.
Net cash used in investing activities of $592.0 million for the year ended December 31, 2021 was primarily related to acquisitions, including escrow funding, of $299.0 million, capital expenditures of $268.4 million, and investments in nonpublic companies of $23.6 million.
Approxi mately 81% of the revenues in our Insurance segment for the years ended December 31, 2022 and 2021 were derived from hosted subscriptions through agreements (generally one to five years) for our solutions. We also provide advisory/consulting services, which help our customers get more value out of our analytics and their subscriptions.
Approxi mately 80% and 81% of the revenues in our Insurance segment for the years ended December 31, 2023 and 2022 were derived from hosted subscriptions through agreements (generally one to five years) for our solutions, respectively. We also provide advisory/consulting services, which help our customers get more value out of our analytics and their subscriptions.
We use year-over-year revenue growth as a key performance metric. We assess revenue growth based on our ability to generate increased revenue through increased sales to existing customers, sales to new customers, sales of new or expanded solutions to existing and new customers, and strategic acquisitions of new businesses.
We use year-over-year revenue growth as a key performance metric. We assess revenue growth based on our ability to generate increased revenue through increased sales to existing customers, sales to new customers, sales of new or expanded solutions to existing and new customers, and strategic acquisitions of new businesses. We use year-over-year EBITDA growth as metrics to measure our performance.
Our selling, general and administrative expenses excludes depreciation and amortization. 32 Table of Contents Trends Affecting Our Business A significant change in P&C insurers’ profitability could affect the demand for our solutions. For insurers, the keys to profitability include increasing investment income, premium growth and disciplined and accurate underwriting of risks.
Our selling, general and administrative expenses exclude depreciation and amortization. 31 Table of Contents Trends Affecting Our Business A significant change in P&C insurers’ profitability could affect the demand for our solutions. For insurers, the keys to profitability include increasing investment income, premium growth and disciplined and accurate underwriting of risks.
Net Income Margin The net income margin for our consolidated results was 41.7% for the year ended December 31, 2022 compared to 24.7% for each of the year ended December 31, 2021 .
Net Income Margin The net income margin for our consolidated results was 41.7% for the year ended December 31, 2022 compared to 24.7% for the year ended December 31, 2021.
Amounts billed and collected in advance are recorded as deferred revenues on the balance sheet and are recognized as the services are performed and revenue recognition criteria are met. 44 Table of Contents Stock-Based Compensation Stock-based compensation cost, including stock options, restricted stock, and performance share units ("PSUs"), is measured at the grant date, based on the fair value of the awards granted, and is recognized as expense over the requisite service period.
Amounts billed and collected in advance are recorded as deferred revenues on the balance sheet and are recognized as the services are performed and revenue recognition criteria are met. 43 Table of Contents Stock-Based Compensation Stock-based compensation cost, including nonqualified stock options, restricted stock, TSR-based performance share units ("PSUs"), and ROIC-based PSUs, is measured at the grant date, based on the fair value of the awards granted, and is recognized as expense over the requisite service period.
A one percent change in discount rate and future rate of return on plan assets would have the following effects: Pension Postretirement 1% Decrease 1% Increase 1% Decrease 1% Increase Benefit (Credit) Cost Projected Benefit Obligation Benefit (Credit) Cost Projected Benefit Obligation Benefit (Credit) Cost Projected Benefit Obligation Benefit (Credit) Cost Projected Benefit Obligation Discount Rate $ (0.8 ) $ 28.2 $ 0.6 $ (24.4 ) $ - $ 0.3 $ - $ (0.3 ) Expected Rate of Return on Assets $ 4.4 $ - $ (4.4 ) $ - $ 0.1 $ - $ (0.1 ) $ - Income Taxes In projecting future taxable income, we develop assumptions including the amount of future state, federal and foreign pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies.
A one percent change in discount rate and future rate of return on plan assets would have the following effects: Pension Postretirement 1% Decrease 1% Increase 1% Decrease 1% Increase Benefit (Credit) Cost Projected Benefit Obligation Benefit (Credit) Cost Projected Benefit Obligation Benefit (Credit) Cost Projected Benefit Obligation Benefit (Credit) Cost Projected Benefit Obligation Discount Rate $ (0.5 ) $ 26.3 $ 0.4 $ (22.8 ) $ - $ 0.2 $ - $ (0.2 ) Expected Rate of Return on Assets $ 3.8 $ - $ (3.8 ) $ - $ 0.1 $ - $ (0.1 ) $ - Income Taxes In projecting future taxable income, we develop assumptions including the amount of future state, federal and foreign pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies.
Recent Accounting Pronouncements For a discussion of recent accounting pronouncements, refer to Note 2(s) to the audited consolidated financial statements included elsewhere in this annual report on Form 10-K. 46 Table of Contents
Recent Accounting Pronouncements For a discussion of recent accounting pronouncements, refer to Note 2(s) to the audited consolidated financial statements included in this annual report on Form 10-K. 45 Table of Contents
We are a leading data analytics provider serving customers in the insurance markets. Using advanced technologies to collect and analyze billions of records, we draw on unique data assets and deep domain expertise to provide innovations that may be integrated into customer workflows.
We are a leading data analytics provider serving clients in the insurance markets. Using advanced technologies to collect and analyze billions of records, we draw on unique data assets and deep domain expertise to provide innovations that may be integrated into client workflows.
For the years ended December 31, 2022 and 2021 , approximately 19% of our consolidated revenues were derived from providing transactional and advisory/consulting solutions. Principal Operating Costs and Expenses Personnel expenses are a major component of both our cost of revenues and selling, general and administrative expenses.
For the years ended December 31, 2023 and 2022 , approximately 20% and 19% of our consolidated revenues were derived from providing transactional and advisory/consulting solutions, respectively. Principal Operating Costs and Expenses Personnel expenses are a major component of both our cost of revenues and selling, general and administrative expenses.
These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined. 45 Table of Contents We estimate unrecognized tax positions o f $0.9 million that may be recognized by December 31, 2023, due to expiration of statutes of limitations and resolution of audits with taxing authorities, net of additional uncertain tax positions.
These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined. We estimate unrecognized tax positions o f $0.7 million that may be recognized by December 31, 2024, due to expiration of statutes of limitations and resolution of audits with taxing authorities, net of additional uncertain tax positions.
Personnel expenses, which represented approximately 59.2% and 56.3% of our total operating expenses (excluding gains/losses related to dispositions) for each of the years ended December 31, 2022 and 2021, respectively, include salaries, benefits, incentive compensation, equity compensation costs, sales commissions, employment taxes, recruiting costs, and outsourced temporary agency costs.
Personnel expenses, which represented approximately 57% and 59% of our total operating expenses (excluding gains/losses related to dispositions) for each of the years ended December 31, 2023 and 2022, respectively, include salaries, benefits, incentive compensation, equity compensation costs, sales commissions, employment taxes, recruiting costs, and outsourced temporary agency costs.
EBITDA Margin [1] The EBITDA m argin for our consolidated results w as 65.7% for the year ended December 31, 2022 compared to 47.3% for the ye ar ended December 31, 2021. The increase in EBITDA margin was primarily related to the net gain from our dispositions within our former Energy and Specialized Markets and Verisk Financial Services segments.
EBITDA Margin [1] The EBITDA margin for our consolidated results was 65.7% for the year ended December 31, 2022 compared to 47.3% for the year ended December 31, 2021. The increase in EBITDA margin was primarily related to the net gain from our dispositions within our former Energy and Specialized Markets and Verisk Financial Services segments.
(2) Unrecognized tax benefits of approximately $3.2 million have been recorded as liabilities in accordance with Accounting for Uncertainty in Income Taxes — an interpretation of ASC 740 , which have been omitted from the table above, and we are uncertain as to if or when such amounts may be settled, with the exception of those amounts subject to a statute of limitation.
(2) Unrecognized tax benefits of approximately $2.0 million have been recorded as liabilities in accordance with ASC 740 , Income Taxes which have been omitted from the table above, and we are uncertain as to if or when such amounts may be settled, with the exception of those amounts subject to a statute of limitation.
T hese increases were partially offset by decreases of other operating costs of $0.2 million. 35 Table of Contents Depreciation and Amortization of Fixed Assets Depreciation and amortization of fixed assets was $164.2 million for the year ended December 31, 2022 compared to $170.3 million for the year ended December 31, 2021 , a decrease of $6.1 million or 3.6% .
These increases were partially offset by decreases of other operating costs of $0.2 million. Depreciation and Amortization of Fixed Assets Depreciation and amortization of fixed assets was $164.2 million for the year ended December 31, 2022 compared to $170.3 million for the year ended December 31, 2021, a decrease of $6.1 million or 3.6%.
The Syndicated Credit Facility may be used for general corporate purposes, including working capital needs and capital expenditures, acquisitions, dividends and the share repurchase program (the "Repurchase Program"). As of December 31, 2022, we were in compliance with all financial and other debt covenants under the Syndicated Credit Facility.
The Syndicated Credit Facility may be used for general corporate purposes, including working capital needs and capital expenditures, acquisitions, dividend payments, and the Repurchase Program. As of December 31, 2023, we were in compliance with all financial and other debt covenants under the Syndicated Credit Facility.
The decrease in the effective tax rate in 2022 compared to 2021 was primarily due to a tax rate benefit in connection with the sale of our environmental health and safety business for which a benefit was recognized for the difference between book and tax basis of our investment.
The decrease in the effective tax rate in 2022 compared to 2021 was primarily due to a tax rate benefit in connection with the sale of 3E for which a benefit was recognized for the difference between book and tax basis of our investment.
Our recent acquisitions and dispositions represented a net increase of $13.0 million in cost of revenues, which was primarily related to salaries and employee benefits.
Our recent acquisitions and dispositions represented a net increase of $26.2 million in cost of revenues, which was primarily related to salaries and employee benefits.
Our no-code modular technology stack and advanced analytics (such as using electronic health records to model mortality and detecting of tobacco use through voice analysis) enable the digital transformation of our customers' core infrastructure and automate their decision-making processes across the policy lifecycle. 33 Table of Contents Description of Acquisitions We acquir ed thirteen businesses since January 1, 2020.
Our no-code modular technology stack and advanced analytics (such as using electronic health records to model mortality and detecting of tobacco use through voice analysis) enable the digital transformation of our customers' core infrastructure and automate their decision-making processes across the policy lifecycle. 32 Table of Contents Description of Acquisitions We acquired 13 businesses since January 1, 2021.
Despite increasing interest rates in 2022, the annualized yield on investments (not attributable to cash transfers from outside the P/C industry) is 2.5% as of nine-months 2022, down from the 2.6% yield for year-end 2021. Both recent results are lower than the historical 15-year average of 3.4%, showing that yields have yet to follow the trend in interest rates.
Despite high interest rates in 2023, the annualized yield on investments (not attributable to cash transfers from outside the P/C industry) was 3.0% as of nine-months 2023, down from the 3.3% yield for year-end 2022. Both recent results are lower than the historical 15-year average of 3.4%, showing that yields have yet to follow the trend in interest rates.
The increase in net income margin was primarily related to the net gain from the sale of our environmental health and safety business and the Financial Services segment in addition to an impairment of our Financial Services segment in 2021.
The increase in net income margin was primarily related to the net gain from the sale of 3E and the Financial Services segment in addition to an impairment of our Financial Services segment in 2021.
The unamortized discount and debt issuance costs were recorded as "Long-term debt" in the accompanying consolidated balance sheets, and will be amortized to "Interest expense" in the accompanying consolidated statements of operations within this Form 10-K over the life of the respective senior note.
Interest on the senior notes is payable semi-annually each year. The unamortized discount and debt issuance costs were recorded as "Long-term debt" in the accompanying consolidated balance sheets, and will be amortized to "Interest expense" in the accompanying consolidated statements of operations within this Form 10-K over the life of the respective senior note.
For our pension and postretirement plans, the total actuarial losses as of December 31, 2022 that have not been recognized in annual expense are $147.8 million and $3.2 million, respectively, and we expect to recognize a net periodic pension and postretirement expenses of $5.3 million and $0.1 million, respectively, in 2023 related to the amortization of actuarial losses.
For our pension and postretirement plans, the total actuarial losses as of December 31, 2023 that have not been recognized in annual expense are $118.3 million and $3.6 million, respectively, and we expect to recognize a net periodic pension and postretirement expenses of $3.6 million and $0.3 million, respectively, in 2024 related to the amortization of actuarial losses.
For the years ended December 31, 2022, 2021, and 2020 , we repurchased $1,662.5 million, $475.0 million and $348.8 million, respectively, of our common stock. For the years ended December 31, 2022, 2021, and 2020 , we also paid dividends of $195.2 million, $188.2 million, and $175.8 million, respectively.
For the years ended December 31, 2023, 2022, and 2021 , we repurchased $2,762.3 million, $1,662.5 million, and $475.0 million, respectively, of our common stock. For the years ended December 31, 2023, 2022, and 2021 , we also paid dividends of $196.8 million, $195.2 million, and $188.2 million, respectively.
Goodwill and intangible assets with indefinite lives are subject to impairment testing annually as of June 30, or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable, using the guidance and criteria described in the accounting standard for Goodwill and Other Intangible Assets .
Goodwill and intangible assets with indefinite lives are subject to impairment testing annually as of June 30, or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable.
Our recent acquisitions and dispositions accounted for a net increase of $12.3 million in cost of revenues, which was primarily related to salaries and employee benefits.
Our recent acquisitions and dispositions accounted for a net decrease of $16.5 million in cost of revenues, which was primarily related to salaries and employee benefits.
Accordingly, all results of the Energy business have been removed from continuing operations and presented as discontinued operations in our consolidated statements of operations and as held for sale assets and liabilities on our balance sheet for all periods presented.
Accordingly, all results of the Energy business have been removed from continuing operations and presented as discontinued operations in our consolidated statements of operations for all periods presented. Additionally, all assets and liabilities of the Energy business were classified as assets and liabilities held for sale within our consolidated balance sheet as of December 31, 2022.
As of December 31, 2022, we have gross federal, state, and foreign income tax net operating loss carryforw ards of $85.3 milli on, which will expire at various dates from 2023 through 2042.
As of December 31, 2023, we have gross federal, state, and foreign income tax net operating loss carryforw ards of $69.0 milli on, which will expire at various dates from 2024 through 2043.
A reconciliation from net income to EBITDA is in the table below: Year Ended December 31, 2021 2020 Net Income $ 666.3 $ 712.7 Less: Income from discontinued operations, net of tax expense of $29.7 and $20.1, respectively 59.2 58.9 Income from continuing operations 607.1 653.8 Depreciation and amortization of fixed assets 170.3 159.2 Amortization of intangible assets 79.9 73.4 Interest expense 127.0 138.3 Provision for income taxes 179.4 164.6 EBITDA $ 1,163.7 $ 1,189.3 Revenue $ 2,462.5 $ 2,269.4 EBITDA Margin 47.3 % 52.4 % 39 Table of Contents Results of Continuing Operations by Segment As previously described in our “Results of Continuing Operations by Segment for year ended December 31, 2022 compared to year ended December 31, 2021, we have excluded Energy and Specialized Markets segment and Financial Services segment from the results of operations by segment due to the sale of these two segments.
A reconciliation from net income to EBITDA is in the table below: Year Ended December 31, 2022 2021 Net Income $ 954.3 $ 666.3 Less: (Loss) income from discontinued operations, net of tax expense of $131.5 and $(29.7), respectively (87.8 ) 59.2 Income from continuing operations 1,042.1 607.1 Depreciation and amortization of fixed assets 164.2 170.3 Amortization of intangible assets 74.4 79.9 Interest expense 138.8 127.0 Provision for income taxes 220.3 179.4 EBITDA $ 1,639.8 $ 1,163.7 Revenue $ 2,497.0 $ 2,462.5 EBITDA Margin 65.7 % 47.3 % 38 Table of Contents Results of Continuing Operations by Segment As previously described in our “Results of Continuing Operations by Segment, for year ended December 31, 2023 compared to year ended December 31, 2022, we have excluded Energy and Specialized Markets segment and Financial Services segment from the results of operations by segment due to the sale of these two segments.
Investment (Loss)Income and Others, Net Investment (loss) income and others, net was a gain of $2.1 million for the year ended December 31, 2021 compared to a gain of $0.4 million for the year ended December 31, 2020. The increase was primarily due to impact of foreign currencies.
Investment Income (Loss) and Others, Net Investment income (loss) and others, net was a gain of $11.0 million for the year ended December 31, 2023 compared to a loss of $4.7 million for the year ended December 31, 2022 . The increase was primarily due to impact of foreign currencies.
During the measurement period, which is not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.
During the measurement period, which is not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill.
Selling, General and Administrative Expenses Selling, general and administrative expenses ("SGA") were $381.5 million for the year ended December 31, 2022 compared to $313.2 million for the year ended December 31, 2021 , an increase of $68.3 million or 21.8%.
Selling, General and Administrative Expenses Selling, general and administrative expenses ("SGA") were $391.8 million for the year ended December 31, 2023 compared to $381.5 million for the year ended December 31, 2022 , an increase of $10.3 million or 2.7% .
The fair value of stock options is measured using a Black-Scholes option-pricing model, which requires the use of several estimates, including expected term, expected risk-free interest rate, expected volatility, and expected dividend yield. The fair value of the restricted stock is determined using the closing price of our common stock on the grant date.
The fair value of stock options is measured using a Black-Scholes option-pricing model, which requires the use of several estimates, including expected term, expected risk-free interest rate, expected volatility, and expected dividend yield. The stock options have an exercise price equal to the adjusted closing price of our common stock on the grant date with a ten-year contractual term.
The increase in EBITDA margin was primarily driven by the net gain from the sale of our environmental health and safety business and the Financial Services segment, which positively impacted our margin by 14.2%. [1] Note: Consolidated EBITDA margin, a non-GAAP measure, is calculated as a percentage of consolidated revenue.
The net gain from the sale of 3E and the Financial Services segment, which positively impacted our margin by 14.2%. [1] Note: Consolidated EBITDA margin, a non-GAAP measure, is calculated as a percentage of consolidated revenue.
Investment (Loss) Income and Others, Net Investment (loss) income and others, net was a gain of $1.8 million for the year ended December 31, 2021 compared to a gain of $0.3 million for the year ended December 31, 2020. The gain was primarily due to impact of foreign currencies.
Investment Income (Loss) and Others, Net Investment income (loss) and others, net was a gain of $11.0 million for the year ended December 31, 2023 compared to a loss of $5.3 million for the year ended December 31, 2022 . The increase was primarily due to impact of foreign currencies.
This transaction did not qualify as a discontinued operation. As a result of these sale transactions, we have excluded the Energy and Specialized Markets and Financial Services segments from our management's discussion and analysis of the results of operations by segment. See a description of our 2022 dispositions and businesses held for sale below and Note 11 .
We did not classify this transaction as a discontinued operation. As a result of these sale transactions, we have excluded the Energy and Specialized Markets and Financial Services segments from our management's discussion and analysis of the results of operations by segment.
This increase was primarily driven by the additional amortization of intangible assets incurred in connection with our recent acquisitions of $11.2 million, partially offset by intangible assets that were fully amortized of $4.5 million and our recent dispositions of $0.2 million. 38 Table of Contents Other Operating Income(Loss) Other operating income was a loss of $134.0 million for the year ended December 31, 2021 compared to a gain of $19.4 million for the year ended December 31, 2020.
The decrease was primarily driven by recent dispositions of $20.1 million, and intangible assets that were fully amortized of $8.6 million, partially offset by additional amortization of intangible assets incurred in connection with our recent acquisitions of $23.2 million. 37 Table of Contents Other Operating (Income) Loss Other operating (income) loss was a gain of $354.2 million for the year ended December 31, 2022 compared to a loss of $134.0 million for the year ended December 31, 2021 .
These acquisitions affect the comparability of our consolidated results of operations between periods. See a description of our 2022 acquisitions below and Note 10 . Acquisitions to our consolidated financial statements included in this annual report on Form 10-K for further discussions. On March 1, 2022, we acquired 100 percent of the stock of Opta Information Intelligence Corp.
These acquisitions affect the comparability of our consolidated results of operations between periods. See a description of our 2023 acquisitions below and Note 10 . Acquisitions to our consolidated financial statements included in this annual report on Form 10-K for further discussions.
Our recent acquisitions and dispositions accounted for an increase of $13.7 million in SGA primarily related to salaries and employee benefits. Our acquisition-related costs (earn-outs) accounted for a decrease of $3.6 million (See Note 10 . Acquisitions to our consolidated financial statements included in this annual report on Form 10-K).
Our acquisition-related costs (earn-outs) accounted for a decrease of $3.6 million (See Note 10 . Acquisitions to our consolidated financial statements included in this annual report on Form 10-K).
The outputs from the actuarial models are assessed against the prior year’s discount rate and quoted rates for long-term bond indices. For our pension plans at December 31, 2022, we determined this rate to be 5.49%, an increase of 2.74% from the 2.75% rate used at December 31, 2021.
The outputs from the actuarial models are assessed against the prior year’s discount rate and quoted rates for long-term bond indices. For our pension plans at December 31, 2023, we determined this rate to be 5.37% and 5.49% at December 31, 2023 and 2022, respectively. Our postretirement rate was 4.75% and 5.25% at December 31, 2023 and 2022, respectively.
March 31, June 30, September 30, December 31, 2022 (in millions, except for per share data) Statement of operations data: Revenues $ 643.6 $ 612.9 $ 610.1 $ 630.4 Cost of revenue 228.7 195.5 195.2 205.2 Operating income 622.8 247.6 253.6 282.5 Income from continuing operations 487.0 173.5 165.8 215.8 Net Income attributable to Verisk 505.7 197.6 189.4 61.2 Basic earnings per share: Income from continuing operations $ 3.03 $ 1.10 $ 1.06 $ 1.38 Net income attributable to Verisk $ 3.15 $ 1.25 $ 1.21 $ 0.39 Diluted earnings per share: Income from continuing operations $ 3.01 $ 1.09 $ 1.05 $ 1.37 Net income attributable to Verisk $ 3.13 $ 1.24 $ 1.20 $ 0.39 March 31, June 30, September 30, December 31, 2021 (in millions, except for per share data) Statement of operations data: Revenues $ 597.2 $ 613.1 $ 621.9 $ 630.3 Cost of revenue 212.5 212.6 212.4 216.2 Operating income 227.2 246.9 266.2 171.1 Income from continuing operations 147.0 159.2 182.6 118.3 Net income attributable to Verisk 168.6 153.9 201.8 141.9 Basic earnings per share: Income from continuing operations $ 0.90 $ 0.98 $ 1.13 $ 0.73 Net income attributable to Verisk $ 1.04 $ 0.95 $ 1.25 $ 0.88 Diluted earnings per share: Income from continuing operations $ 0.89 $ 0.98 $ 1.12 $ 0.73 Net income attributable to Verisk $ 1.03 $ 0.94 $ 1.24 $ 0.87 41 Table of Contents Liquidity and Capital Resources As of December 31, 2022 and 2021, we had cash and cash equ ivalents and available-for-sale securities of $296.7 million and $285.3 million, respectively, inclusive of cash included within assets held for sale.
March 31, June 30, September 30, December 31, 2023 (in millions, except for per share data) Statement of operations data: Revenues $ 651.6 $ 675.0 $ 677.6 $ 677.2 Cost of revenue 216.2 216.9 217.2 226.2 Operating income 294.1 306.0 281.1 250.5 Income from continuing operations 194.4 204.3 187.4 182.3 Net Income attributable to Verisk 56.3 196.9 187.4 174.0 Basic earnings per share: Income from continuing operations $ 1.28 $ 1.41 $ 1.29 $ 1.26 Net income attributable to Verisk $ 0.37 $ 1.36 $ 1.29 $ 1.20 Diluted earnings per share: Income from continuing operations $ 1.27 $ 1.41 $ 1.29 $ 1.25 Net income attributable to Verisk $ 0.37 $ 1.35 $ 1.29 $ 1.20 March 31, June 30, September 30, December 31, 2022 (in millions, except for per share data) Statement of operations data: Revenues $ 643.6 $ 612.9 $ 610.1 $ 630.4 Cost of revenue 228.7 195.5 195.2 205.2 Operating income 622.8 247.6 253.6 282.5 Income from continuing operations 487.0 173.5 165.8 215.8 Net income attributable to Verisk 505.7 197.6 189.4 61.2 Basic earnings per share: Income from continuing operations $ 3.03 $ 1.10 $ 1.06 $ 1.38 Net income attributable to Verisk $ 3.15 $ 1.25 $ 1.21 $ 0.39 Diluted earnings per share: Income from continuing operations $ 3.01 $ 1.09 $ 1.05 $ 1.37 Net income attributable to Verisk $ 3.13 $ 1.24 $ 1.20 $ 0.39 40 Table of Contents Liquidity and Capital Resources As of December 31, 2023 and 2022, we had cash and cash equ ivalents and available-for-sale securities totaling $303.9 million and $296.7 million, respectively, inclusive of cash included within assets held for sale.
Such net operating loss carryforwards expire as follows: Years Ending (In millions) 2023 - 2030 $ 20.8 2031 - 2035 11.7 2036 - 2042 52.8 Total $ 85.3 The net deferred income tax lia bility of $114.0 million consists primarily of timing differences involving amortization.
Such net operating loss carryforwards expire as follows: Years Ending (in millions) 2024 - 2031 $ 20.5 2032 - 2036 11.5 2037 - 2043 37.0 Total $ 69.0 The net deferred income tax lia bility of $179.3 million consists primarily of timing differences involving amortization.
Description of Dispositions and Discontinued Operations See a description of our 2022 dispositions and businesses held for sale below and Note 11 . Dispositions and Discontinued Operations to our consolidated financial statements included in this annual report on Form 10-K for further discussions. As described above, we completed the sale of our Energy business on February 1, 2023.
Description of Discontinued Operations See a description of our 2023 disposition below and within Note 11 . Dispositions and Discontinued Operations to our consolidated financial statements included in this annual report on Form 10-K for further discussions.
In connection with the held for sale classification of the Energy business, we recognized an impairment of $303.7 million, partially offset by a deferred tax benefit of $75.9 million on the remeasurement of the disposal group held for sale, which has been included in discontinued operations in our consolidated statement of operations for the year ended December 31, 2022.
In connection with the held for sale classification, we recognized an impairment of $303.7 million on the remeasurement of the disposal group held for sale, which has been included in discontinued operations in our consolidated statement of operations.
Upon classification of the Energy business as held for sale, its cumulative foreign currency translation adjustment within shareholders' equity was included with its carrying value, which primarily resulted in the impairment.
Upon classification of the Energy business as held for sale, its cumulative foreign currency translation adjustment within shareholders’ equity was included with its carrying value, which primarily resulted in the impairment. When we closed on and completed the sale of our Energy business on February 1, 2023, we recognized a loss of $128.4 million.
Insurance Revenues Revenues were $2,206.9 million for the year ended December 31, 2021 compared to $2,008.7 million for the year ended December 31, 2020, an increase of $198.2 million or 9.9%. Our underwriting & rating revenues increased $142.1 million or 10.1%.
Insurance Revenues Revenues were $2,437.0 million for the year ended December 31, 2022 compared to $2,206.9 million for the year ended December 31, 2021, an increase of $230.1 million or 10.4%. Our underwriting revenues increased $179.4 million or 11.5%.
We revise these assumptions based on an annual evaluation of long-term trends and market conditions that may have an impact on the cost of providing retirement benefits.
The principal assumptions concern the discount rate used to measure the projected benefit obligation and the expected return on plan assets. We revise these assumptions based on an annual evaluation of long-term trends and market conditions that may have an impact on the cost of providing retirement benefits.
We believe our solutions for analyzing risk positively impact our customers’ revenues and help them better manage their costs. 30 Table of Contents Recent Developments On October 28, 2022, we entered into an equity purchase agreement to sell our Energy business to Planet Jersey Buyer Ltd, an entity that was formed on behalf of, and is controlled by, The Veritas Capital Fund VIII, L.P. and its affiliated funds and entities (“Veritas Capital”), for a purchase price of $3,100.0 million (subject to customary purchase price adjustments for, among other things, the cash, working capital and indebtedness of the Energy business as of the closing) and up to $200 million of additional contingent cash consideration based on Veritas Capital’s future return on its investment paid through a Class C Partnership interest.
On February 1, 2023, we completed the sale of our Energy business to Planet Jersey Buyer Ltd, an entity that was formed on behalf of, and is controlled by, The Veritas Capital Fund VIII, L.P. and its affiliated funds and entities (“Veritas Capital”), for a net cash sale price of $3,066.4 million paid at closing (reflecting a base purchase price of $3,100.0 million, subject to customary purchase price adjustments for, among other things, the cash, working capital, and indebtedness of the companies as of the closing) and up to $200.0 million of additional contingent cash consideration based on Veritas Capital’s future return on its investment paid through a Class C Partnership interest.
Expenditures related to developing and enhancing our solutions are predominately related to internal-use software and are capitalized in accordance with ASC 350-40, “ Accounting for Costs of Computer Software Developed or Obtained for Internal Use. ” We also capitalize amounts in accordance with ASC 985-20, “ Software to be Sold, Leased or Otherwise Marketed .” We have historically used a portion of our cash for repurchases of our common stock from our stockholders.
We also capitalize amounts in accordance with ASC 985-20, Software to be Sold, Leased or Otherwise Marketed . We have historically used a portion of our cash for repurchases of our common stock from our stockholders.
We have a $1,000.0 million Syndicated Credit Facility with Bank of America N.A., HSBC Bank USA, N.A., JP Morgan Chase Bank, N.A., Wells Fargo Bank, National Association, Citibank, N.A., Credit Suisse AG, Cayman Islands Branch, Morgan Stanley Bank, N.A., First Commercial Bank, Ltd., Los Angeles Branch, TD Bank, N.A., and the Northern Trust Company.
We have a $1,000.0 million Syndicated Credit Facility with Bank of America N.A., HSBC Bank USA, N.A., JP Morgan Chase Bank, N.A., Wells Fargo Bank, National Association, Citibank, N.A., Morgan Stanley Bank, N.A., TD Bank, N.A., Goldman Sachs Bank USA, and the Northern Trust Company that was amended on April 5, 2023.
The increase was primarily attributed to $11.8 million assets placed into service to support data capacity expansion and revenue growth and $0.4 million related to recent acquisitions, partially offset by recent dispositions of $1.2 million.
The increase was primarily driven by $44.6 million of depreciation and amortization expense attributed to an increase in assets placed into service to support revenue growth and recent acquisitions of $0.2 million, partially offset by $2.2 million related to recent dispositions.
The financial covenants thereunder require that, at the end of any fiscal quarter, we have a consolidated funded debt leverage ratio of less than 3.5 to 1.0. At our election, the maximum consolidated funded debt leverage ratio could be permitted to increase one time each to 4.0 to 1.0 and 4.25 to 1.0.
The financial covenants require that, at the end of any fiscal quarter, we have a consolidated funded debt leverage ratio of less than 3.75 to 1.0 .
Net cash used in financing activities of $445.2 million for the year ended December 31, 2020 was primarily related to proceeds, net of repayments of debt from our Syndicated Credit Facility of $445.0 million, repurchases of common stock of $348.8 million, and dividend payments of $175.8 million, partially offset by proceeds from the issuance of long-term debt and net of original discount, of $494.8 million, and proceeds from stock options exercised of $88.0 million. 43 Table of Contents Contractual Obligations The following table summarizes our contractual obligations at December 31, 2022 and the future periods in which such obligations are expected to be settled in cash: Payments Due by Period Total Less than 1 year 2-3 years 4-5 years More than 5 years (in millions) Contractual obligations Long-term debt, current portion of long-term debt and interest $ 4,915.1 $ 1,492.5 $ 1,076.8 $ 124.3 $ 2,221.5 Operating leases 263.4 34.6 57.0 52.8 119.0 Pension and postretirement plans (1) 12.8 1.6 3.0 2.5 5.7 Finance lease obligations 4.3 3.1 1.1 0.1 — Total (2) $ 5,195.6 $ 1,531.8 $ 1,137.9 $ 179.7 $ 2,346.2 (1) Our funding policy is to contribute at least equal to the minimum legal funding requirement.
Net cash used in financing activities of $498.9 million for the year ended December 31, 2021 was primarily related to repurchases of common stock of $475.0 million, repayment of our $450.0 million 5.800% senior notes on May 3, 2021, and dividend payments of $188.2 million, partially offset by proceeds, net of repayments, from our Syndicated Credit Facility, of $560.0 million and proceeds from stock options exercised of $84.3 million. 42 Table of Contents Contractual Obligations The following table summarizes our contractual obligations at December 31, 2023 and the future periods in which such obligations are expected to be settled in cash: Payments Due by Period Total Less than 1 year 2-3 years 4-5 years More than 5 years (in millions) Contractual obligations Long-term debt, current portion of long-term debt, and interest $ 4,191.0 $ 126.9 $ 1,098.3 $ 181.8 $ 2,784.0 Operating leases 268.4 33.3 66.7 64.1 104.3 Pension and postretirement plans (1) 12.4 1.7 2.9 2.6 5.2 Finance lease obligations 37.1 15.6 17.2 4.3 — Total (2) $ 4,508.9 $ 177.5 $ 1,185.1 $ 252.8 $ 2,893.5 (1) Our funding policy is to contribute at least equal to the minimum legal funding requirement.
Our recent acquisitions and dispositions accounted for an increase of $15.1 million primarily related to salaries and employee benefits. Our acquisition-related costs (earn-outs) accounted for a decrease of $2.0 million.
Our recent acquisitions and dispositions accounted for an increase of $24.5 million primarily related to salaries and employee benefits, partially offset by acquisition-related earn-out costs of $16.5 million.
Financing and Financing Capacity We had total debt, excluding finance lease obligations, unamortized discounts and premium, and debt issuance costs of $3,740.0 million and $3,310.0 million at December 31, 2022 and 2021 , respectively.
Financing and Financing Capacity We had total debt, e xcluding finance lease obligations, unamortized discounts and premium, and debt issuance costs, of $2,850.0 million and $3,740.0 million at December 31, 2023 and 2022, respectively. The debt at December 31, 2023 primarily consists of senior notes issued in 2023, 2020, 2019, and 2015.
The fair value of PSUs is determined on the grant date using the Monte Carlo Simulation model. Option grants and restricted stock awards are generally expensed ratably over the four-year vesting period. PSUs are generally expensed ratably over the three-year vesting period.
Option grants and restricted stock awards are generally expensed ratably over the four-year vesting period. PSUs are generally expensed ratably over the three-year vesting period.
The Energy business qualified as held for sale in the fourth quarter of 2022 and was classified as a discontinued operation per the guidance in ASC 205-20, Discontinued Operations , as we determined, qualitatively and quantitatively, that this transaction represents a strategic shift that has or will have a major effect on our operations and financial results.
The Energy business, which was part of our Energy and Specialized Markets segment, was classified as discontinued operations per ASC 205-20 as we determined, qualitatively and quantitatively, that this transaction represented a strategic shift that had a major effect on our operations and financial results.
A reconciliation from net income to EBITDA is in the table below: Year Ended December 31, 2022 2021 Net Income $ 954.3 $ 666.3 Less: (Loss) income from discontinued operations, net of tax (benefit) expense of $(131.5) and $29.7, respectively (87.8 ) 59.2 Income from continuing operations 1,042.1 607.1 Depreciation and amortization of fixed assets 164.2 170.3 Amortization of intangible assets 74.4 79.9 Interest expense 138.8 127.0 Provision for income taxes 220.3 179.4 EBITDA $ 1,639.8 $ 1,163.7 Revenue $ 2,497.0 $ 2,462.5 EBITDA Margin 65.7 % 47.3 % 36 Table of Contents Results of Continuing Operations by Segment Our Energy and Specialized Market segment was comprised of two businesses, our Energy business and Specialized Market business.
A reconciliation from net income to EBITDA is in the table below: Year Ended December 31, 2023 2022 Net Income $ 614.4 $ 954.3 Less: Loss from discontinued operations, net of tax (benefit) expense of $(12.6) and $131.5, respectively (154.0 ) (87.8 ) Income from continuing operations 768.4 1,042.1 Depreciation and amortization of fixed assets 206.8 164.2 Amortization of intangible assets 74.6 74.4 Interest expense 115.5 138.8 Provision for income taxes 258.8 220.3 EBITDA $ 1,424.1 $ 1,639.8 Revenue $ 2,681.4 $ 2,497.0 EBITDA Margin 53.1 % 65.7 % 35 Table of Contents Results of Continuing Operations by Segment Insurance Revenues Revenues were $2,681.4 million for the year ended December 31, 2023 compared to $2,437.0 million for the year ended December 31, 2022 , an increase of $244.4 million or 10.0% .
Our postretirement rate was 5.25% at December 31, 2022 an increase of 3.00% from the 2.25% rate used at December 31, 2021. The expected return on plan assets is determined by taking into consideration our analysis of our actual historical investment returns to a broader long-term forecast adjusted based on our target investment allocation, and the current economic environment.
The expected return on plan assets is determined by taking into consideration our analysis of our actual historical investment returns to a broader long-term forecast adjusted based on our target investment allocation, and the current economic environment. Our pension asset investment guidelines target an investment portfolio allocation of 60.0% debt securities and 40.0% equity securities.
Our underwriting & rating revenues increased $101.7 million or 7.2% primarily due to an annual increase in prices derived from continued enhancements to the content of the solutions within our industry-standard insurance programs as well as selling expanded solutions to existing customers within commercial and personal lines. In addition, catastrophe modeling services contributed to the growth.
Our underwriting revenues increased $146.6 million or 8.5% primarily due to an annual increase in prices derived from continued enhancements to the content of the solutions within our forms, rules and loss cost services as well as selling expanded solutions to new and existing customers within underwriting solutions.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Movements in the U.S. dollar to British pounds and other foreign currency exchange rates did not have a material effect on our revenue for the year ended December 31, 2022. A hypothetical ten percent change in average exchange rates versus the U.S. dollar would not have resulted in a material change to our earnings. Item 8.
Movements in the U.S. dollar to British pounds and other foreign currency exchange rates did not have a material effect on our revenue for the year ended December 31, 2023. A hypothetical ten percent change in average exchange rates versus the U.S. dollar would not have resulted in a material change to our earnings. Item 8.
Foreign Currency Risk Our foreign-based businesses and results of operations are exposed to movements in the U.S. dollar to British pounds and other foreign currency exchange rates. A portion of our revenue is denominated in British pounds and other foreign currencies.
The Bilateral Credit Facilities have not been renewed. Foreign Currency Risk Our foreign-based businesses and results of operations are exposed to movements in the U.S. dollar to British pounds and other foreign currency exchange rates. A portion of our revenue is denominated in British pounds and other foreign currencies.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk We are exposed to market risk from fluctuations in interest rates. As of December 31, 2022, we had borrowings outstanding under our Credit Facilities of $1,390.0 m illion.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk We are exposed to market risk from fluctuations in interest rates. As of December 31, 2023, we had no borrowings outstanding under our Credit Facility.
A change in interest rates on variable rate debt impacts our pre-tax income and cash flows but does not impact the fair value of the instruments. Subsequent to December 31, 2022, we have made repayments of $1,390.0 million on our Credit Facilities.
A change in interest rates on variable rate debt impacts our pre-tax income and cash flows but does not impact the fair value of the instruments.
The Bilateral Credit Facilities carry an interest rate of 135 basis points plus the one-month BSBY and may be used for general corporate purposes, including working capital needs and capital expenditures, acquisitions, dividend payments and the Repurchase Program. The Bilateral Credit Facilities are now subject to the replacement of LIBOR.
The Bilateral Credit Facilities carried an interest rate of 135 basis points plus the one-month BSBY and was used for general corporate purposes, including working capital needs and capital expenditures, acquisitions, dividend payments, and the Repurchase Program. We have had no outstanding borrowings under our Bilateral Credit Facilities during 2023 through the maturity dates.
As a result of this activity, we now have the ability to draw up to $1,395.6 million from our Credit Facilities. On September 9, 2022, we amended the $125.0 million Bilateral Term Loan Facility and established the $275.0 million Bilateral Revolving Credit Facility with maturity dates of September 9, 2023 and October 2, 2023, respectively.
We also maintained a $125.0 million Bilateral Term Loan Facility and a $275.0 million Bilateral Revolving Credit Facility (together the "Bilateral Credit Facilities") that matured on September 9, 2023 and October 2, 2023 , respectively.
Removed
The borrowings under the Syndicated Credit Facility bear interest at variable rates based on LIBOR plus 1.0% to 1.625% depending on the public debt rating defined in the credit agreement. The current margin is 1.25% for $990.0 million under the Syndicated Credit Facility as a result of the current public debt rating.
Added
On April 5, 2023 , we entered into the Fifth Amendment (the "Amendment") to the committed senior unsecured Syndicated Revolving Credit Facility with Bank of America, N.A. as administrative agent. The Amendment does not change the current borrowing capacity of $1,000.0 million, but does extend the maturity date to April 5, 2028 .
Removed
Interest on the Bilateral Credit Facilities is based on BSBY and we have the choice of the Secured Overnight Financing Rate ("SOFR") or the BSBY as part of the Bilateral Credit Facilities agreement.
Added
Interest on borrowings under the Amendment is payable at an interest rate of SOFR plus 100.0 to 162.5 basis points, depending upon our public debt rating. A commitment fee on any unused commitment is payable periodically and may range from 8.0 to 17.5 basis points based upon our public debt rating.
Removed
As our only current contract that is subject to the LIBOR rate is the existing Syndicated Credit Facility, the impact will be dependent on what the outstanding borrowing amount is on the Syndicated Credit Facility and the relevant interest rate that will be contractually applicable.
Removed
Should we amend or extend our Syndicated Credit Facility to reflect SOFR or BSBY, based on recent borrowings and applicable SOFR, we do not anticipate such an amendment to have a material impact on the business.
Removed
Based on our overall interest rate exposure as of December 31, 2022, a one percent change in interest rate would result in a change in annual pre-tax interest exp ense of approximately $13.9 million bas ed on our current borrowing levels outstanding on December 31, 2022.

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