Verisk Analytics, Inc. (VRSK) Earnings Call Transcript & Summary

All right. Good morning, everybody. Thank you for being here. My name is Manav Patnaik. I'm Barclays' business and information services analyst. And we're pleased to continue our day here today. We have Elizabeth Mann from Verisk, who's the CFO. So thank you for being here, Elizabeth.

Thank you so much for having me here, and thanks for joining.

And maybe actually, where I wanted to start, Elizabeth, was you've taken on a new role for the last month, as the Interim Head, I guess, of Claims. So just curious, the new responsibilities, how deep have you dived in? And what you've learned from there?

Yes. Thanks a bunch for the question. Yes, one of our colleagues departed, and so I've taken on a role as an Interim Head of the Claims Solutions business. It's been a -- it's a fantastic and really interesting and exciting opportunity. We've got some great businesses in that claims space. And so, look, it's a month into it, but I've had a chance to really spend a lot of time with that team. We've done an off-site, and I'm spending time, particularly on the Property Estimating Solutions business, which is the largest business in that group; our anti-fraud business, which has a ton of opportunity; and then the Casualty and the International businesses. So it's a great opportunity to get kind of hands-on and learn much more deeply about the businesses that I have been covering and talking to you guys about.

And I guess the timing is good in the sense that you guys just announced the AccuLynx deal, which fits right into the PES business, the property estimating business that you were referring to. As you have, we've gotten a lot of questions on the deal and the deal rationale and the logic. So maybe let's just start off with, from your perspective, how do you explain what AccuLynx is and what that brings to Verisk?

Yes. Happy to spend time on this. This is one that, on its surface, I think, has gotten some questions. And it's gotten some questions of, "Oh, is Verisk moving into an adjacent area?" And the first point to really emphasize is that this is not an adjacent area. The AccuLynx business is very closely related and very strategically beneficial for our Property Estimating Solutions business. If I can just take a minute or 2 on that Property Estimating Solutions business, this is the business that provides estimation software for the value of property repairs related to insurance workflows. And so there is a software solution, a suite of software products for the contractor community that is doing the repairs. There are software tools for the third-party adjusters. And then, there is a separate software suite for the insurance carriers for them to collaborate on that workflow to estimate the price for a repair, agree on that quote and agree on that workflow. Those 2 -- those software suites are built on a common database because Verisk is a data company. That data is the pricing data related to materials and labor costs for the property repair. Very granular information by SKU, updated frequently and very specific to geographical regions within the U.S. because the carriers care so much about the pricing that goes in -- of the materials that goes into their claims workflow. So that's our Property Estimating Solutions business. As you can hear from that description, the revenue of that business, very rough numbers, but you can think of it as approximately 40% of the revenue coming from the carriers, approximately 40% of it coming from the contractor universe and approximately 20% of it coming from the third-party adjusters and other participants in that ecosystem. So even before the AccuLynx acquisition, you can see this business as an example, where by serving the insurance industry, we serve other stakeholders. It doesn't mean that the insurance carrier is the only customer for that product or those sets of products. So the AccuLynx acquisition, AccuLynx is a software that serves -- within that contractor universe, it serves the roofing contractors in specific with software that is specific to their business management of a roofing contractor company. So it is software that handles CRM, job management workflow, financial and ERP management and materials ordering. So that suite of software products that helps the roofing contractor run their business, has -- does not really overlap with the Property Estimating Solutions software that they also use, but there is significant integration and more opportunity for those software sets to work together seamlessly. And, in fact, the founder of AccuLynx, who was originally a roofer and built the software that he thought he most needed, commented that he worked -- he used the Xactimate product, the Verisk Property Estimating Solutions product, from day 1 and always wished that those sets of software would be more tightly integrated, and now, they will be.

Got it. Before we talk about the integration, maybe just high level, AccuLynx itself, can you just talk about the size, the growth rates, the margins and why that was attractive to you?

Yes. So in addition to being a strategic acquisition, it also happens to be a financially attractive business, which was important to me -- the strategic side is now maybe important with my claims hat on, but the financial attractiveness is first and foremost, what I care about as CFO. We quoted on that business approximately $150 million of revenue for 2025, growing at mid to high teens growth rate and with margins at 55% plus. So it's very striking to find a software business with that growth profile with a margin that actually happens to be in line with Verisk overall.

Got it. So back to the synergies then. I know you said this is not a cost synergy play, but anything to call out just on the cost once you start integrating the businesses.

Yes. I think -- look, there's always opportunity to be more efficient and to operate more efficiently. Potentially, from a go-to-market standpoint, there may be some opportunities. But we're particularly excited about the software integration opportunities and the cross-sell and other revenue synergies.

Okay. So let's touch on those revenue synergies then. Let's do the cross-sell because I think that's the easiest side to appreciate, just the overlap and the platforms, maybe just give us some color on that?

Yes. So for the AccuLynx, AccuLynx has about 5,000-ish customers, really mostly in the roofing contractor space. We took a look at the white space, a significant portion of those are Xactimate and Property Estimating Solutions customers, but a significant and meaningful proportion are not. And so that gives us an immediate cross-sell opportunity. On the flip side, the Xactimate and Xactware customers within the contracting universe, there is also a significant population of roofing contractors, who -- for whom there's an immediate opportunity to continue to work with the AccuLynx software. And better integration and more seamless workflows between the 2 platforms is a meaningful differentiator in the market.

Got it. And so does that mean the mid to high teens growth that they were doing that you mentioned can materially accelerate given this potential cross-sell?

We'll have to see. We'll definitely be working on it, accelerating it as much as possible.

Got it. I think on the call and in our discussions, you had also mentioned there's a potential data opportunity, which I don't think people fully appreciate. So maybe if you can give us some of the details around what you were referring to there.

Yes. And I want to be mindful. When I say data opportunity, responsible data use is a touchstone and a watch word here at Verisk. So we're not looking to take advantage of one stakeholder's data and sell it to somebody else. But our carrier universe, keep in mind, the roofing workflow and the roofing claims are a very high-value proportion of their property repair costs. Something like 35% of the costs of all property claims are associated with roofing. So any data that they can get to better optimize and improve the decisions and the pricing on that roofing cost can be meaningful to them. So that can be anything from more efficiencies of scale in the materials that are being ordered by the contractors that they work with, it can be optimizing -- developing -- identifying which contractors they have the best relationships with and deliver the best outcomes for them. And this is something that I see more now, you were asking about the claims role, as I talk more with customers, I get to see their interest in this. I will say they've expressed interest. Keep in mind, the deal hasn't closed yet. We are still going through regulatory approval, and so we are still operating as 2 separate companies. So we're not going deep on these opportunities yet or fleshing out business plans or anything like that. But the carriers have expressed significant amounts of interest. Even on metrics like they assess a great amount of detail of the statistics of what roofing jobs are repaired versus full replacement of roofs. And even a percentage point change in those metrics can create significant value for the carriers. So anything they can do to better benchmark contractor performance, materials costs -- to optimize material costs better, all of that can create a significant amount of value for the carriers.

Got it. And so the way I understand it is Xactimate today provides obviously a best estimate of that, but AccuLynx has the actual cost. So I guess, what I'm trying to get at is, how do you monetize that better? Or is that just a retention tool that you now have the more accurate data?

Both. You can potentially find monetization opportunities for that data, again, in the aggregate, not individual job related.

Got it. And would you say this data opportunity is also in the near-term category, like once you close, you can start doing it almost immediately? Or does this take time?

I think some of those data opportunities will take a bit of time. The cross-sell opportunities are immediate.

Okay. And then just maybe thinking beyond the near to medium term, I know in other meetings you've talked about the network and then maybe going into other workflows, so just talk a bit -- talk a little bit about that.

Yes. It's a theme that we're really excited about. And going back to our first -- to our -- not our first Investor Day, but our Investor Day in 2023, where we laid out kind of the strategic evolution of Verisk. And we talked about it starting as an industry utility and evolving through a strategic solutions provider, but ultimately ending as a network company. There are so many businesses within Verisk that gain significant amount of value from the network involved, whether it's the contributory data sets shared among carriers. The AccuLynx example itself is one where there's a network benefit to having the carriers come together and the contractor universe and the repair workflows being on the same platform and benefiting from more information. It can be even as simple as the network benefit if you have a carrier working, say, with a preferred set of contractors and having everybody in that network benefit from economies of scale in materials pricing, for example.

Got it. Okay. So hopefully people appreciate the strategy a little bit more. So let's just round it up with the ultimate question that everyone asks. What's the accretion dilution math here? I know you've already raised the debt for it. So let's just assume it closes September 30, to keep it clean, like how should we think about when it starts showing up as accretive to Verisk financials?

Yes. What we said when we announced the deal, it will be modestly dilutive in the initial quarters. It will be accretive, we estimate, by the end of 2026. So think of it as approximately a year-ish of modest dilution and accretive thereafter.

Got it. Maybe let's stick to the deal theme. I think it got more attention than its size would give it because it happened around the same time as AccuLynx. But you bought another company called SuranceBay in the life insurance space. Life was small before. It's probably still small, but it's growing bigger. So just -- I think we get a lot of questions on what's Verisk doing in life. So maybe you can just help us appreciate that.

Yes. So Life Insurance business, let me just take you back to our original acquisition in the space. At the end of 2019, we acquired a business called FAST, which stood for Flexible Architecture and Simplified Technology. So yes. So this is a software -- a policy administration platform for life insurers. It's a true kind of multi-tenant SaaS platform. And for the life insurers managing a policy, if you think about the life cycle of those policies are far more -- at least P&C insurance policies are renewed every year. And so almost on an annual basis the carrier is forced to keep the terms fresh, and therefore, in a way, forced to keep the maintenance of the entire policy book fresh. Whereas in the Life Insurance space, you may have policies that were written in the 1980s and that are maintained at the time they were put in a file cabinet, let alone a hard drive. So the maintenance of those policies is being modernized, and we think FAST is by far one of the leading tools to help life insurance carriers manage those policies. We significantly accelerated the growth of that business. It had been mid-single digits growth. And through Verisk's name in the life insurance space, where there's, I think, 40% of over -- 40% of our P&C customers also underwrite life. So again, there was an immediate customer footprint that we could sell that business into and being sold under the Verisk umbrella, a large trusted public company trusted by the carriers, insurance -- sorry, investment-grade balance sheet had much more success than a small startup. And so we accelerated the growth from mid-single digits to double digits. And it continues to have great strength and strong growth into that industry. Our carriers are now asking for more things they can do on the platform. And going back to this theme of network businesses, the SuranceBay business that we acquired is a software tool that helps the carriers and helps the distribution network, the agent groups, manage the compliance workflow of life insurance agents. So it can assess licensing, renewals, training of the life insurance agent -- life and annuity agent workflow -- workforce, both for the carriers themselves in the life space and across those distribution companies.

Got it. Okay. So strategically, within life, at least, I think that makes sense. Maybe again, with your CFO hat, let's round this up with, financially, why was it attractive?

Yes. It is also an attractive software business growing, strong growth and additive to the Verisk portfolio.

Okay. Maybe let's stick with the theme on capital allocation. I think at the call, you said even after AccuLynx, you would still be doing some level of buybacks. So maybe just remind us of your leverage level post this raise, your targets, and how we should think about what to expect beyond these 2 deals?

Yes. So from a capital allocation standpoint, again, we view these 2 deals as very much examples of our capital allocation strategy and instances of the theme, not departures from it. Our target leverage range is and continues to be 2 to 3x debt to EBITDA. We had been almost under-levered before these deals. We kept falling below 2x with EBITDA growth. After the financing for these 2 deals, which again, we've already done, SuranceBay has closed, AccuLynx we've said will close by the end of the year, so the financing is in hand, and we are at 3x debt to EBITDA. So we're still within the range at the high end of the range. So we didn't breach our target leverage range. And so we have some long-term debt and some prepayable debt, giving us opportunity and optionality we can delever a bit from -- by debt paydown. We will also delever from EBITDA growth. And we will still have ample cash available to continue buying back shares, albeit at maybe a slightly lower level than we were before. But we can continue the share buyback program in the market even while we continue to service and pay down the debt.

And that capability to buy back shares was available this last couple of months as well as the shares pulled back?

Yes.

Okay. Let's move on. Thematically, in our whole space, we get the question on AI. And then specific to Verisk, and it's kind of come back because of AI is just the whole cyber risk and cyber insurance. So maybe let's just start with the cyber stuff. Like does Verisk have capabilities, involvement in the cyber world? Like, how positioned are you in there?

Yes. We do have capabilities. We cover mainly on the forms, rules and loss cost business. We cover cyber from a policy standpoint. It is frequently one of our top kind of emerging issues that the industry wants to discuss.

Okay. And is it -- have you ever sized it? Or is there any way to know how cyber is?

We have not sized it. I would say, as an industry, while there is a lot of talk and focus on it from a size standpoint, it is still modest within the industry. And though it has grown significantly in past years, some of that growth has tapered more recently.

Got it. Okay. And then just on the AI topic, I think everyone appreciates that your ISO database is rock-solid contributory mode. But maybe on all the analytics and software that you provide, on top of that you acquired AccuLynx, which is also software, the fears around vibe coding and killing all software. Maybe from your standpoint, like how confident are you in that not being disrupted, I guess?

Yes. We are fairly confident in our positioning. Vibe coding can help us just as it can help others be more efficient in the tools that we build. Look, we are excited about the creativity and the opportunity going around there with analytics. Even I think before the launch, say, of the first ChatGPT launch at the end of '23, we were talking about open ecosystem. So in a number of our businesses, we've been pulling in partners, we've been working together with partners. And so when others had interesting and creative ideas of things to do with analytics, we still think we have the leading place of the data on which that analytics can and should be best applied, as well as the trusted relationships with the industry participants, in this case, the large insurance carriers, and the trusted relationships with regulators, which is a significant factor in the insurance industry. So we think that we are very much at the table as those discussions evolve and the understanding and the governance of AI and how that should develop. We're very much participants on that. If others have great ideas on the technology side, we're excited to partner with them.

Got it. Okay. It felt like in your last earnings call every topic of debate for Verisk happened at the same time. So the other one was net written premiums, and the P&C insurers that reported around the same time were reporting deceleration materials. So maybe let's start off with what -- to level-set your percentage of revenues tied to that, how you price it, how much is really tied to it. Just some flavor there.

Yes. What we've said historically is approximately 20% to 25% of our revenues are on contracts which have an input from net written premium growth. That's for historical reasons on how the business developed out of the industry. Also, from a fluke of history, it is associated with net written premium growth from -- with a 2-year lag on it. So our 2025 pricing for those contracts with an input is related to 2023 net written premium growth. So that deceleration that we are undoubtedly seeing in 2025 is one that would impact those contracts in 2027. The next thing I would say, even for those contracts where premium growth is an input, it is only an input, it is not a formulaic driver. So there's a premium growth component, there's a Verisk pricing component, there's various other elements, including the carriers' business mix and premium mix as well as kind of cross-sell and other products. And if you rewind the tape 2 years ago, when premium growth and the entire inflationary environment was so high, I was getting the question all the time of why is your pricing growth not higher. And that was because some -- all of these other elements that I talked about kind of create a little bit of a reversion to the mean in our pricing and in our total revenue growth, which we like. We think that provides stability. And when I look back historically, the 6% to 8% medium-term revenue growth that you've seen Verisk give as a medium-term target, you've also seen that play out historically every single year since we went public back in 2009, including some eras we went back and looked historically, like '24 to 2016 -- sorry, 2014 to 2016, for example, was a 3-year cycle with an average premium growth of 3.5%, a fairly soft market in the insurance industry. And our insurance business delivered organic revenue growth just north of 7% in that cycle as well.

And is there any way to quantify how much this cycle benefited more? I know you gave us one example, but generally, soft versus hard market, like is there a big difference in that contribution?

Not much. In that same data set, as we looked back historically, if we classified years into soft market versus hard market, we said -- the Verisk -- the average Verisk organic revenue growth, all just for the insurance business, in hard markets was about 7.3% and in soft markets it was about 6.8% growth. So you can see it's a modest headwind. They still kind of both average out to close to 7%. So there's a potential for some headwind, but well within the range of organic growth that we have delivered and expect to continue to deliver.

Got it. And hopefully, we're not seeing this, but to the extent net written premiums go negative, is that when they could be materially more different? So like you said, it's just an input, and that's also manageable.

It's possible. So the last time historically premium growth was negative was back in '07-'08. There was actually premium contraction. And we did continue to grow in that time period. But more importantly, I think, yes, there's premium growth. Some of the premium cycle depends -- is a function of the extent to which carriers are competing with each other for business versus -- and being more aggressive to grow long-term revenue. And so they may be reducing premium growth to be more competitive with each other. So that's also a sign of business focus for the carriers. We continue to focus on the value that we're delivering to the carriers. Sometimes it's cost savings for them, as they need to reduce manual work and digitize. Sometimes it is opportunity for them. Better underwriting outcomes drive significant and important financials for our carrier customers or more claims fraud identified or just more straight-through processing and more efficient processing of claims. So all those things create value for the insurance carriers and value which may be more important in soft cycles than in hard cycles. So in some ways, yes, the premium pool is important. Yes, there may be a bit of a correlation there. But we're also focused on another stat, which is the percent of carrier's premium that they spend on technology, which is approximately 7% in 2024 of the total premium pool, that technology spend is only continuing to grow. And in a way, that's the market that we think we are tied to and a part of and can help increase -- improve the outcome of carriers in multiple different ways.

Got it. You referred to this, the 2-year lag, fluke of luck, whatever the phrase, it's obviously beneficial. You get time to offset those things. We always get the question, and I know you told this to me before, and it's just hard to explain. Why is it a 2-year lag? And do you think that ever changes?

I guess it would take a while for it to change. So the fluke of history, if you like, for the 2-year lag, when -- so here's the history lesson, Verisk was created in the '70s as a consortium of the U.S. P&C carriers to be able to share data to better underwrite and price risk. That's the foundation of our forms, rules and loss cost business, as well as to make it more efficient for them to submit their forms for approval across the regulatory patchwork -- there's -- insurance in the U.S. is regulated at all 50 states, so they need to submit their forms across those different states. That's the foundation of our forms, rules and loss cost business. Our anti-fraud business on the claims side was founded at the same time to help them share claims and identify fraudulent actors across claims for which the contributory -- they need to see across the full industry claims. Obviously, a fraudulent actor isn't going to hit the same carrier time after time. So that's the foundation of the contributory data set. The 2-year pricing lag, that was then -- that data set was then forced to separate out from what was originally industry ownership. And so it was at that time in the '90s when the pricing model was set as an independent company that -- the conclusion was made that the Verisk would grow as the carrier's business grew, and so our price increase would have an input from that carrier's premium growth. At the time it was done, let's say, now at the end of 2025, because the industry is so precise, the 2024 premiums are not -- premium submissions are not yet fully final. And so we look back to 2023. That's the reason for the 2-year lag. I asked when I first came in as CFO, we're living in a very modern era, does it really have to be a 2-year pricing lag? And they said that's how it is. Now, I will say that those businesses combined are about 40% of our revenue. You heard me say it's only 20% to 25% of the revenue that has that contractual component, that's because the larger carriers, and many in the industry, are looking for a simpler pricing model and are just moving to multiyear subscriptions with agreed price increases. So its -- while that revenue model may remain and may never change, it is becoming a smaller and smaller part of our business.

Got it. Just one clarification. Does the P&C net written premium pricing -- this morning, there was a lot of headlines, I guess, there's a conference going on in Monte Carlo and this prop cat pricing is going to be down double digits. Do you have any exposure to that element of pricing? Or how does that work?

Not direct exposure from it. So our models do not charge based on reinsurance premium growth or decline. There may be secondary effects, like the choice as to whether carriers cede more via reinsurance or ultimately send more to the ILS market. So there could be knock-on effects from that dynamic.

Got it. Let's talk about the second half guidance. You gave us a few different items on why we shouldn't get carried away with our models. But maybe first just a broad question before we go through the list. When you set the second half guidance, just are you -- is it an under-promise, over-deliver philosophy? Are you just trying to call it as it is? I think there's a lot of debate around that still, but just if you can clear that up for us.

Yes. Thanks for the question, Manav. I try to call it like it is, and I have consistently over my time here.

Okay. So then maybe with those different items, is there 1 or 2 that stand out on why you kind of -- why it's implying deceleration, I guess?

Yes. It was -- look, we call that -- they're all -- they're each fairly modest items. But in the aggregate, it does have an impact, it's a bit of a headwind, certainly relative to the first half. And so while none of them is that material in the extreme, remember, for Verisk, that range of 6% to 8%, which has been so consistent over time, means that I spend time with you and with our investors on modest 25 basis points here or there is something that we really end up digging into and talking about. So each of those factors, maybe none of them is material in and of itself, but in the aggregate, that's -- we kind of talked about them.

Okay. One of the obvious questions, and we'll get more of it as we get to the fourth quarter, you had a tough comp from the hurricane activity last quarter. What are the assumptions of hurricane activity embedded for the second half, I guess?

Yes. Good question. So last quarter, meaning last year, so in the fourth quarter of '24, there were 2 hurricanes that benefited us, Hurricane Helene and Hurricane Milton, affected Florida and had a very modest benefit to growth. So that is a headwind that we're comping in the fourth quarter of this year. We always say we plan and forecast for "a normalized" or an average year of storm activity. 2024 was elevated with the 2 hurricanes. 2023 was elevated with very -- it didn't have specific named hurricanes in '23, but had very high levels of severe convective storm and other weather activity. So we typically budget and plan for "an average year." Actually, as it plays out, 2025 is shaping up to be a light weather year, so even less. You haven't seen major named hurricanes, which is a good thing. But even the moderate sort of severe convective storm, thunder, hail activity has been quite light across the U.S.

Got it. And just to clarify, is that light within that average assumption you usually take? Or are you saying it's a little bit below what you would have expected?

I would say it's below average.

Okay. All right. Got it. Talking about Florida and just thinking a little bit more on the medium-term risks, all the insurers leaving Florida, the headwinds there, are we past that for you guys?

I think Florida is starting to normalize. You had both regulatory reforms that made it a more conducive environment for insurance carriers. And then yes, you had some weather impacts. You had -- you saw some bankruptcies really in the -- or liquidations in the aftermath of Hurricane Ian a couple of years ago, but you've now seen new capital formation in the state, so we always keep an eye there. But it seems to be a fairly stable environment. I think a watch area for us is California given the wildfire impacts earlier in the year. So that's an area where we -- where I think the industry overall is monitoring.

Yes. I was going to ask with California is -- I don't know if you had ever historically sized how much Florida was as a headwind. And is that a good proxy to think about what California could do?

Good question. We hadn't specifically sized it. But I think you could think of them as roughly similar.

Got it. And maybe you can just remind us, I know in your long-term framework, you talked about that there's the growth and then the industry headwinds you group together. What is that range? And what are some of the other factors you would throw into there besides something like Florida and California?

Yes. We talked about the building blocks to our 6% to 8% growth. We said 3% to 4% pricing, 1.5% to 2% on cross-sell and upsell and on new products. And then -- we said about 50 to 150 basis points of new customers, but kind of offset by 50 to 150 basis points of consolidation/attrition. So over time, and we've seen this consistently historically, and continued to grow and deliver growth despite that headwind, you do have an impact when a carrier exits a certain state, they may not need the data that they were using before from us for that state. So that can be a modest headwind to growth. Eventually, those policies land somewhere, and hopefully, that somewhere will be with another Verisk customer so that you see kind of that trade-off between the attrition and the new customers, or in Florida, the example, you had some liquidations, but eventually over time you have new capital formation coming in.

Got it. And in terms of industry consolidation, I don't know if you have a unique view on it, but there is always a kind of reinsurance M&A that probably continues. But in the big P&C guys, it was basically ACE, Chubb a while back, like do you foresee any other headwinds from consolidation?

We're watching it. We don't have a view. So there could be some consolidation. ACE, Chubb was the biggest example. That was back in 2016. And we do talk about that M&A as a potential headwind when 2 large customers consolidate. The example with ACE, Chubb, when they did merge, in the first year post -- kind of post acquisition or post the time the contract renewed, there was a modest headwind to our revenue just from that one customer merger. But after that first year, our business continued to grow with them. And the bigger scale, as we've seen sort of inevitably, then leads to more interest in data and analytics.

Got it. Maybe in the last 3 minutes, just to talk about the Core Lines Reimagined initiative. So let's just say you have the deceleration because of the net written premium, you have AccuLynx coming in, which will help, and then should we expect Core Lines, the transformation, to add some more non-pricing growth, I guess?

Yes. We're very excited about this, and we think it's already been kind of playing out in our strong subscription growth. The Core Lines Reimagined name is a reinvestment in one of those original products that was built out of contributory data from the industry. The product itself goes back to the 1970s. But we've been reinvesting in it quite significantly so that you're doing 2020s kinds of things with the data that is being contributed. And so we've gone from the forms, it's literally the policy language that the carriers can build off of and implement for their policies and seek regulatory approval of. Those forms, that policy language and the associated data of the loss cost has gone from, well, originally, print circular delivery to PDF delivery, to now much more of a data-first approach. The policy language itself is broken down into kind of modular elements in that language, so ways that can -- that are creating the foundation to be worked with from AI tools. And so the carrier can work with them and interact with them. Initially, we can save the underwriters themselves significant amounts of time in being able to analyze the language across forms and flow through the impact, say, of a regulatory change, maybe a state law changes. And so that affects policies in that state. They can go through and figure out what insurance lines are affected by that legal change, and see it all together in one place in an immediate clickable way. That, our customers have told us, saves significant amount of kind of high-value human time. And it's also probably laying the seeds for much more digital and AI-enabled working with that policy form and data.

Got it. And then maybe just last question, your upcoming Investor Day in March, is that a factor of all these new acquisitions, the Core Lines ending? Or is it just an -- just what we should expect?

We were out there in March of 2023. We gave 3-year medium-term targets. We wanted to give very specific transparency so that you can measure our delivery against it. We think we've largely delivered against that. And so now it's time for an update. So all those things that you're talking about are some of the things we'll talk about, but the driver is the timing.

Got it. All right. Great. Well, thank you so much, Elizabeth. And thank you, everyone, for being here.

Thanks so much. Great to see you. And come in March.

Thank you. Appreciate it.