Ryan Specialty Group Holdings Inc. reported nearly 30% organic revenue growth in the second quarter and expects strong full-year organic growth, the company's senior executives said in their initial earnings talk as a public company on Wednesday.
The Chicago-based specialty broker and underwriting group, which completed a listed offering in July, also expects to reload its acquisition strategy after the successful listing, said Patrick G. Ryan, founder, chairman and CEO, in the interview.
Mr. . Ryan, who founded the company in 2010 after retiring from Aon PLC, said it has benefited from an increase in business flowing into the surplus and surplus markets as traditional insurance companies more often take on tougher risks as losses increase.
Ryan Specialty reported second-quarter revenue of $ 390 million, an increase of 58.3% over the same period last year. The sharp increase partly reflected Ryan Specialty & # 39 ;s acquisition of rival All Risks Ltd. in September 2020.
The company reported organic growth ̵1; excluding acquisitions, currency effects and other factors – of 28.5% in the quarter, compared to 18.5% organic growth during the same period last year.
The organic growth "was driven by a combination of new customer gains, expanded relationships with existing customers and a higher growth rate in our total addressable market as the risks continue to flow out of the permitted market and into the E&S market", says Jeremiah Bickham, Chief Financial Officer. "Furthermore, several risk classes have realized premium increases from year to year."
Ryan Specialty expects to report year-round organic growth of 18% to 20%, Bickham said.
Prices continue to rise in many lines, such as cyber responsibility, health care and transport, and there is only "very, very modest speed reduction that we see on one or two lines," said Timothy W. Turner, president of Ryan Specialty.
Second quarter net income increased by 27.1% to $ 63.4 million.
Among its three main areas of business, the company's wholesale brokerage network increased commissions and fees by 48.7% to $ 256 million; binding authority net commissions and fees increased 69.8% to $ 53.6 million; and the insurance administration's net commissions and fees increased by 89.4% to $ 80.3 million.
The specialty sector is seeing increased consolidation and Ryan Specialty expects to make more acquisitions, Ryan said.
"We had to hold back, obviously, during the IPO, but we have had discussions with people and we are very convinced that the pipeline is strong, of high quality," he says.