Ryan Specialty announces $1bn deal and revenue jump
Price rises continue in E&S market, says broker
Ryan Specialty has agreed to buy builders risk specialist US Assure Insurance Services of Florida, which does business as InsuranceLink, for up to $1.48bn.
The announcement came as the specialty intermediary announced a nearly 20% increase in second-quarter revenue.
Ryan Specialty continues to see price hikes in the excess and surplus lines market, said Timothy W. Turner, president of Ryan Specialty.
“Property continues to see pricing moderation and stabilisation after years of large increases, and casualty is seeing price increases accelerating and broadening out across industry classes,” he said.
More liability risks are being placed in the E&S market amid the uncertainty in the market, said Turner.
Ryan Specialty will pay $1.08bn for US Assure and up to $400m more in performance-based consideration. The deal is expected to close on 1 September.
The underwriting manager, which was founded in 1977, offers coverage to small and medium-sized businesses involved in residential and commercial construction projects through an exclusive agreement with Zurich American Insurance. About 90% of its submissions are handled through its online portal.
“They’re micro premiums; a lot of people would say you can’t make a profit on that size premium,” said Patrick G. Ryan, CEO of Ryan Specialty, on a conference call with analysts. “The US Assure team several decades ago figured out how to do that and so it’s a very high-value proposition to the contractor.”
US Assure expects to deliver $122.5m in revenue this year.
Ryan Specialty reported $695.4m in revenue during the second quarter, an 18.8% increase over the same period last year and 14.2% on an organic basis, which excludes the effect of acquisitions and foreign currency fluctuations.
Among its main divisions, wholesale brokerage reported $444.1m in Q2 revenue, a 16.4% increase over the prior-year period, underwriting management reported $155.5m, up 27.8%, and binding authorities reported $80.6m, up 15.6%.
The company reported a profit of $118m, a 40.8% increase over the prior-year quarter.
Revenue was up 19.6% in the first six months to $1.25bn. Net income rose 32% in H1 to $158.7m.
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