Verisk Raises Prices on the Loss-Cost Data Actuaries Use

Every advisory rate filing that leans on an ISO loss cost starts with a number Verisk sets, not the carrier's own experience. In its second quarter of 2026, Verisk's underwriting segment grew revenue to $569 million, up 5.6% on an organic constant-currency basis, and the company attributed the increase mainly to annual price increases on forms, rules and loss cost services (Verisk, July 2026).

What an ISO Loss Cost Actually Is, and Why a Filing Depends on It

Verisk's Insurance Services Office, better known as ISO, is the rating advisory organization that most US property and casualty carriers lean on for the baseline machinery of a rate filing: policy forms, rating rules, classification plans, and loss costs, the projected claim cost per exposure unit before a carrier adds its own expense and profit load. An insurer that contracts with an advisory organization can adopt ISO's filed forms, rules and loss costs wholesale rather than developing them from scratch, filing only the state-specific items ISO leaves blank plus a loss cost multiplier that converts the advisory loss cost into the carrier's own rate by layering in expenses and profit. That structure is what makes the arrangement a dependency rather than a convenience. NCCI performs the equivalent function for workers' compensation in most states, but ISO's line-of-business reach across auto, homeowners, commercial property and general liability makes it the default statistical and rating backbone for the carriers that never built parallel in-house capability. Every dollar of the $569 million is a toll charged on that backbone, and the toll just went up again.

The Quarter: A Pricing Story Wearing a Subscription-Growth Headline

Total revenue reached $806 million, up 4.3% as reported and 5.8% on an organic constant-currency basis. Underwriting revenue, the segment carrying forms, rules and loss costs alongside catastrophe and risk solutions, rose 3.5% reported and 5.6% organic constant currency to $569 million, while claims revenue climbed 6.3% reported and 6.1% organic constant currency to $237 million (Verisk, July 2026). Subscription revenue, which made up 83% of the total, grew 8% organic constant currency, and management named the same three subscription businesses driving it every recent quarter: forms, rules and loss costs; catastrophe and risk solutions; and anti-fraud analytics. Chief financial officer Elizabeth Mann tied the growth directly to the vendor's own product investment: "Investment in Core Lines Reimagine continues to drive strong price realization through subscription renewals as clients experience the additional value" (Verisk Q2 2026 earnings call, July 2026).

Profitability told a split story. Adjusted EBITDA reached $464 million, up 4.2% reported and 7.4% organic constant currency, holding a 57.5% margin, and adjusted diluted EPS rose 5.3% to $1.98. GAAP net income fell 9.8% to $229 million and GAAP diluted EPS dropped 3.3% to $1.75, pressured by a higher effective tax rate and elevated interest expense rather than any softness in the underlying subscription book. Operating cash flow jumped 49.7% to $366 million and free cash flow rose 57.9% to $298 million, funding $1.9 billion of first-half share repurchases with $800 million of authorization left. Full-year guidance held at $3.19 to $3.24 billion in revenue and $7.45 to $7.75 in adjusted EPS, an unchanged outlook that reads as confidence the renewal pricing holds through year-end.

Metric	Q2 2026	Reported growth	Organic constant currency
Total revenue	$806M	4.3%	5.8%
Underwriting revenue	$569M	3.5%	5.6%
Claims revenue	$237M	6.3%	6.1%
Subscription revenue (83% of total)	—	—	8%
Adjusted EBITDA	$464M	4.2%	7.4%

The organic underwriting growth rate is the number worth sitting with: 5.6%, against a US Consumer Price Index that ran 3.5% year over year through June 2026 (Bureau of Labor Statistics, June 2026). Verisk's advisory-data pricing is running roughly 210 basis points ahead of general inflation, on a product line where the customer has limited ability to substitute. That gap does not appear anywhere in the earnings release; it only shows up when a pricing actuary lines the two figures up.

Multiyear Contracts and the Mechanics of the Data Moat

The Q2 pricing did not arrive as a surprise renegotiation. On the first-quarter call, Verisk described forms, rules and loss cost contracts running on multiyear terms averaging roughly four to five years, with price escalation and expanded scope built into each renewal cycle rather than negotiated fresh every year (Verisk Q1 2026 earnings call, April 2026). A carrier that signs one of those agreements is locking in years of compounding increases before the next filing cycle even starts, which is a materially different commitment than a software subscription a buyer can drop at the next renewal date.

Asked directly on that call about carriers using AI to rebuild equivalent datasets internally, Saurabh Khemka, Verisk's president of underwriting solutions, laid out the structural case for why that substitution rarely happens: proprietary and self-sourced data, proprietary normalization across carrier submissions, deep risk-segmentation expertise built over decades, and status as a "trusted provider" of what he called filed analytics, meaning outputs a carrier can deploy immediately because they have already cleared regulatory review. Khemka added that Verisk's scale lets it "offer our turnkey solution to our customers" when carriers face regulators, collapsing a state-by-state filing burden into one relationship a small or mid-size carrier's own actuarial staff would otherwise have to replicate department by department. That is the mechanism behind the pricing power in the Q2 numbers: not a temporary bargaining edge, but a structural one built from decades of aggregated claim and premium data, regulatory relationships, and filed content no single new entrant can replicate on a five-year contract cycle, let alone a fiscal quarter.

The Build-Versus-Buy Math for Carriers Without a Data Science Bench

For a national carrier with a large actuarial and data science staff, an ISO subscription is one line item among many, and the annual increase is a rounding error against total expense ratio. For a regional or specialty carrier, particularly one writing lines where ISO loss costs anchor the base rate, the math is different. Building an internal loss-cost function requires years of aggregated experience across enough policies to be credible, a statistical staff to maintain it, and the regulatory relationships to get it filed and accepted, none of which shows up on next year's budget as a line item that can simply be cut. That fixed cost is why the build option rarely pencils out below a certain scale, and why the buy decision, once made, is closer to permanent than a typical vendor contract.

The practical exposure sits in the expense ratio, not the loss ratio. An advisory-data subscription escalating at roughly 5.6% annually, against renewal cycles running four to five years, compounds into a meaningfully larger data line by the contract's back half even before scope expansion is counted. A carrier with a thin actuarial bench has no credible in-house alternative to absorb that increase; the multiyear structure means the next real negotiating opportunity may be years away. The distinction worth drawing here is between two categories of vendor tool that get lumped together in coverage of the space. ISO forms, rules and loss costs are baseline ratemaking inputs, the number a carrier's own rate is built on top of. A newer category of tool, exemplified by Akur8's Discover product launched after its January 2026 acquisition of Matrisk, ingests public rate and rule filings to let a carrier benchmark its own pricing against competitors' accepted language and rate movements. Discover helps a carrier use ISO-anchored filings more intelligently once they exist; it does not replace the loss cost itself. Build-versus-buy applies to the foundation, not the filing-intelligence layer sitting on top of it, and conflating the two overstates how much competitive pressure exists on Verisk's core pricing power.

Claims Analytics Growing Alongside Pricing Data Widens the Same Moat

The 6.3% growth in claims revenue is not a separate story from the underwriting pricing narrative; it is the same dependence extending into reserving. actuary.info's coverage of Verisk's claims stack has tracked XactAI's licensee count growing nearly tenfold since March to roughly 7,000 users, embedding AI-assisted estimating inside the Xactimate workflow that underlies a large share of US property claim files. A carrier that depends on ISO for its baseline rate and on Xactimate-adjacent tooling for its claim estimates is exposed to the same vendor on both sides of the loss ratio: the projected cost that goes into the rate, and the actual cost that comes out of the claim file. Neither dependency is new individually, but the two growing in the same quarter, 5.6% organic growth in the pricing-data business and 6.1% organic growth in the claims-data business, describes a single company deepening its position across the full actuarial pipeline a P&C carrier runs, from rate filing to reserve indication.

That combination matters for reserving actuaries specifically. If a growing share of property claim estimates are shaped by AI-assisted workflows sitting inside a Verisk-adjacent product, and the loss cost trend those claims eventually feed into ISO's own advisory rate development is drawn from the same aggregated industry experience, an actuary testing reserve adequacy against industry benchmarks is comparing figures that share more upstream instrumentation than the benchmark methodology assumes independent.

McKenzie Intelligence Shows the Second Half of Verisk's Pricing Strategy

The forms, rules and loss cost line raises prices on an entrenched position; Verisk's acquisition strategy shows how it extends into positions it does not yet hold. On July 29, 2026, Verisk announced it had acquired McKenzie Intelligence Services, a UK-based geospatial intelligence firm specializing in real-time catastrophe and political-violence event data, joining Verisk's Catastrophe and Risk Solutions division alongside Verisk Maplecroft (Verisk, July 2026). Financial terms were not disclosed, and the company said the deal would not materially affect results, a signal the purchase is a capability play rather than a near-term revenue driver. actuary.info's earlier coverage detailed how the McKenzie acquisition extends Verisk's post-event geospatial data into strikes, riots, civil commotion and political-violence risk, a category where Verisk had no comparable filed-content advantage to lean on.

Read the two moves together and the strategy has two distinct tracks. Where Verisk already holds the entrenched, regulator-accepted position, forms, rules and loss costs built over decades of aggregated experience, it raises price on renewal, confident that the switching cost is prohibitive within a four-to-five-year contract term. Where it does not yet hold that position, real-time catastrophe event intelligence, it acquires rather than builds, buying instant credibility and a dataset it could not replicate organically on any near-term timeline. Both tracks point the same direction: fewer carriers with a genuine alternative source for the data their pricing and claims functions run on, whichever side of the ledger that data sits on.

What the Escalation Means for the Next Filing Cycle

None of this changes what an ISO loss cost is worth to a carrier that lacks the scale to build an equivalent; it changes what that carrier should budget for it. An advisory-data line escalating faster than CPI, inside a multiyear contract structure that limits the next renegotiation to once every four or five years, behaves less like a software subscription and more like a fixed input cost that compounds quietly until the contract comes up again. A pricing actuary building next year's expense assumptions, or an appointed actuary testing reserve adequacy against industry benchmarks partly built from the same aggregated data, gains more from pricing in that escalation now than from waiting for the next renewal letter to arrive.