BOSTON - Verisk's Extreme Event Solutions group, a leading data analytics and technology firm, has estimated that insured losses from Hurricane Helene in the U.S. will range between $6 billion and $11 billion. This figure excludes losses covered by the National Flood Insurance Program (NFIP).
Hurricane Helene, which made landfall near Perry, Florida, on the night of September 26 as a Category 4 hurricane, is now recorded as the strongest hurricane to hit Florida's Big Bend region since records began in 1851. The hurricane brought with it a record-breaking wind field and storm surge, causing extensive damage along the Gulf coast and into Georgia, where substantial tree damage led to further destruction.
Record rainfall in southern Appalachia, particularly in western North Carolina, resulted in significant flooding, contributing to the insured loss estimates. Asheville was among the hardest hit, with nearly 14 inches of rain over three days.
The Big Bend region, where Helene made landfall, and southwestern Georgia have building codes with wind design specifications between 120 and 130 mph. However, a significant portion of the buildings affected by Helene were constructed before the adoption of the International Codes, i.e., prior to the year 2000, which may have implications for the extent of wind damage.
In Florida, approximately 35% of homeowners have NFIP policies, the highest proportion in the U.S. These policies do not typically cover living expenses, and many homeowners in the impacted areas may not have flood insurance at all, as it is not generally required outside of Special Flood Hazard Areas (SFHAs).
Verisk is currently monitoring Hurricane Milton, which is expected to approach the west coast of the Florida Peninsula and make landfall on October 9.
The company's estimates do not account for a range of factors, including NFIP losses, litigation costs, storm surge or inland flood losses on wind-only policies, and other non-modeled losses.
Verisk plays a strategic role in the global insurance industry, providing data analytics and technology to help clients manage risks, including those related to climate change and extreme events. The company operates in over 20 countries and is recognized for its inclusive and supportive workplace culture.
This report is based on a press release statement from Verisk.
In other recent news, Verisk, a data analytics and technology provider, has expanded its digital trading platform, Whitespace, to the U.S. market. The platform, which has already seen extensive use in the London market, aims to streamline the placement of (re)insurance business and improve operational efficiency. This development coincides with Verisk's reported year-over-year revenue increase of 6.2% to $717 million in its Q2 2024 results, primarily driven by an 8.3% increase in subscription revenue.
Analysts have also been closely following Verisk's performance. Evercore ISI maintained an In Line rating on the company, setting a new price target at $279, while Baird reaffirmed its positive stance on Verisk, maintaining an Outperform rating and a price target of $285. Deutsche Bank (ETR:DBKGn) maintained a Hold rating on Verisk shares with a price target of $282, expressing confidence in the company's growth and margin targets. However, BMO (TSX:BMO) Capital Markets adjusted its price target from $278 to $263, while Jefferies reduced its stock price target to $256, both maintaining a Hold rating.
These are recent developments in Verisk's operations and financial performance. The company has also initiated a $150 million accelerated share repurchase program, demonstrating its commitment to returning capital to shareholders.
InvestingPro Insights
As Verisk Analytics (NASDAQ:VRSK) continues to play a crucial role in the insurance industry with its data analytics and risk assessment capabilities, investors may find value in examining the company's financial health and market position.
According to InvestingPro data, Verisk boasts a market capitalization of $38.74 billion, reflecting its significant presence in the data analytics sector. The company's revenue for the last twelve months as of Q2 2024 stood at $2.78 billion, with a solid revenue growth of 8.12% over the same period. This growth aligns well with Verisk's expanding role in providing critical insights for extreme weather events like Hurricane Helene.
Verisk's financial strength is further underscored by its impressive gross profit margin of 67.91% for the last twelve months as of Q2 2024. This high margin suggests that the company maintains efficient operations and strong pricing power in its niche market of risk assessment and analytics.
InvestingPro Tips highlight that Verisk "has raised its dividend for 5 consecutive years," indicating a commitment to returning value to shareholders. This could be particularly appealing to investors seeking companies with a track record of consistent dividend growth. Additionally, the tip noting that Verisk "operates with a moderate level of debt" suggests financial prudence, which is crucial for long-term stability in the face of economic uncertainties and increasing climate-related risks.
For investors interested in a deeper dive into Verisk's financials and market position, InvestingPro offers 12 additional tips, providing a comprehensive view of the company's strengths and potential areas of concern. These insights can be valuable for making informed investment decisions in the context of Verisk's role in assessing and managing extreme weather events like Hurricane Helene.
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