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Verisk Unveils Black Box 3 for Smart Underwriting Decisions


Shares of Verisk Analytics, Inc. VRSK have gained 15.4% in the past year against 0.4% fall of the industry it belongs to and 6.7% decline of the Zacks S&P 500 composite.

The company recently launched Black Box 3 (BB3) — a solution that it claims will enable insurers take underwriting decisions more accurately and efficiently, right at point of sale, for risks cited by travelers with pre-existing medical conditions. The new solution is currently available in parts of Australasia, Asia, Europe and Canada.

BB3 Comes With a Range of Improvements

Using a unique algorithm, Black Box generates a risk score based on what customers state in the declaration of their medical conditions. The score can be used to complement an existing underwriting strategy.

BB3 is the latest upgrade in Verisk’s Black Box series (launched in 2000) and the scores generated indicate the chances of cancellation of claim, medical expenses and repatriation risk.

It also comes with a new feature — Screening Lite, which controls the number of questions customers have to answer, based on the amount of risk associated with travel destinations and lead time — subject to insurer-determined criteria.

Our Take

BB3 is expected to help Verisk enhance its Insurance segment, which provides underwriting and ratings, and claims insurance data for the U.S. property and casualty ("P&C") insurance industry.

Performance of the segment was strong in the last reported quarter with revenues increasing 8% year over year on a reported basis and 5.5% organically and on an organic constant currency basis in the last reported quarter. The segment contributed the largest chunk (around 71.4%) to Verisk’s third-quarter 2018 revenues.

Zacks Rank & Stocks to Consider

Verisk currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A few better-ranked stocks in the broader Zacks Business Services sector are Republic Services RSG, Waste Connections WCN and Navigant Consulting NCI, each carrying a Zacks Rank #2 (Buy). Long-term expected EPS (three to five years) growth rate for Republic Services, Waste Connections and Navigant is 10.7%, 11.7% and 13.5%, respectively.

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