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Verisk's Geomni and DroneBase Ink Strategic Partnership

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Verisk Analytics, Inc.’s (VRSK - Free Report) Geomni business unit recently announced that it has entered into a strategic alliance with DroneBase — one of the world’s largest global drone operations company.

The alliance will see addition of DroneBase’s pilot network and API to Geomni’s fleet of fixed-wing aircraft to help expand property inspections globally.

When a Geomni Unmanned Aerial Vehicle (UAV) inspection begins, DroneBase’s API gets notified and the local pilot trained to capture the aerial imagery for insurance purpose is deployed. The collected aerial imagery — converted into usable property data by Geomni — gets delivered to insurance applications, such as Xactimate. Xactimate is Xactware’s (another Verisk business) estimating platform. Thus, insurers can access aerial data and insights nationwide for quick recovery of insurance claims.

Apart from insurance claims, the combined entity can be utilized for commercial applications such as parking lot imagery capture and mapping.

So far this year, shares of Verisk have gained 25.5%, outperforming the 15.3% rise of the industry it belongs to.

 

Our Take

We believe the collaboration is likely to boost Verisk’s Insurance segment which offers underwriting & rating, claims analytics, catastrophe modeling, repair cost estimating, and aerial imagery and remote sensing solutions.

Performance of the segment was strong in the last reported quarter with revenues improving 12.3% year over year on a reported basis and 8.4% on an organic constant currency basis. The segment contributed the largest chunk (around 71%) to Verisk’s total revenues in second-quarter 2018.

Within this segment, claims revenues improved 16.7% year over year on a reported basis and 13.2% on an organic constant-currency basis. The uptick was driven by revenues from repair cost estimating solutions, claims analytics and aerial imagery solutions.

Zacks Rank & Stocks to Consider

Currently, Verisk carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Business Services sector include Broadridge Financial Solutions (BR - Free Report) , Paychex (PAYX - Free Report) and Convergys , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term expected earnings per share growth rate for Broadridge Financial Solutions, Paychex and Convergys is 10%, 8.2% and 7.5%, respectively.

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