INVESTOR PRESENTATION
MAY 2024
DISCLAIMER
Forward-Looking Statements:
This presentation by Ryan Specialty Holdings, Inc. (the "Company," "we," "us") contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve substantial risks and uncertainties and that reflect the Company's current expectations and projections with respect to, among other things, its plans, objectives, and business. These forward- looking statements may include words such as "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "may," "will," "should," "can have," "likely" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. All forward-looking statements are subject to risks and uncertainties, known and unknown, that may cause actual results to differ materially from those that the Company expected. For more detail on the risk factors that may affect the Company's results, see the section entitled ''Risk Factors'' in our most recent annual report on Form 10-K and quarterly reports on 10-Q filed with the SEC, and in other documents filed with, or furnished to, the SEC. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Given these factors, as well as other variables that may affect the Company's operating results, you are cautioned not to place undue reliance on these forward-looking statements, not to assume that past financial performance will be a reliable indicator of future performance, and not to use historical trends to anticipate results or trends in future periods. The forward-looking statements included in this presentation relate only to events as of the date hereof. We do not undertake, and expressly disclaim, any duty or obligation to update publicly any forward-looking statement after the date of this release, whether as a result of new information, future events, changes in assumptions or otherwise.
Market and Industry Data
This presentation includes information concerning economic conditions, the Company's industry, the Company's markets and the Company's competitive position that is based on a variety of sources, including information from independent industry analysts and publications, as well as the Company's own estimates and research. The Company's estimates are derived from publicly available information released by third party sources, as well as data from its internal research, and are based on such data and the Company's knowledge of its industry, which the Company believes to be reasonable. The independent industry publications used in this presentation were not prepared on the Company's behalf. This information involves many assumptions and limitations, and you are cautioned not to give undue weight to these estimates. The Company has not independently verified the accuracy or completeness of the data contained in these industry publications and other publicly available information. Accordingly, we make no representations as to the accuracy or completeness of that data nor do we undertake to update such data after the date of this presentation.
Non-GAAP Measures
This presentation contains the following financial measures: Organic Revenue Growth Rate (or "Organic Growth"), Adjusted EBITDAC, and Adjusted EBITDAC Margin, each of which are not recognized under generally accepted accounting principles ("GAAP") in the United States. The Company believes that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titlednon-GAAP measures used by other companies. Organic Growth, Adjusted EBITDAC, and Adjusted EBITDAC Margin each have limitations as an analytical tool, respectively, and you should not consider any of these measures either in isolation or as a substitute for other methods of analyzing the results as reported under GAAP. Please see the appendix for a reconciliation of such non-GAAP financial information to the most comparable GAAP measure.
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OUR FOUNDING THESIS
TREND | #1 | TREND | #2 | TREND | #3 | TREND | #4 |
Risks are becoming bigger | Retail brokers are getting | Retail broker panel | Delegated authority | ||||
and more complex | substantially bigger | consolidation is intensifying | is accelerating |
Retail broker
✓ | |
Broad panel | Superior |
solution |
CARRIERS | UNDERWRITERS |
Want more | Want to join |
intellectual | entrepreneurial |
capital | organizations |
There is elevated risk and
a need for
specialized solutions
Bigger retail brokers
require the assistance of bigger wholesale brokers
Retail brokers require
a superior solution
Intellectual capital and
entrepreneurs need
a new home
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WHO WE ARE
We are a rapidly growing provider of specialty products and solutions for insurance brokers, agents and carriers.
For retail insurance brokers, we assist in the placement of complex or otherwise hard-to-place risks.
For insurance carriers, we work with retail and wholesale insurance brokers to source, onboard, underwrite and service these same risks.
2010 | 2nd | $2.2bn |
founded | largest U.S. P&C wholesale | 3/31/24 LTM |
broker / managing underwriter1 | total revenue | |
20.6%13.7%
3/31/24 YTD | 3/31/24 YTD |
total revenue | organic revenue |
growth | growth2 |
1 According to premium volume; Source: Business Insurance, company filings | 4 |
2 Non-GAAP measure; Please see the appendix for a reconciliation of organic revenue growth to the most comparable GAAP measure. |
DRIVING VALUE BY SECURING COVERAGE FOR COMPLEX SPECIALTY RISKS
Traditional risks | Standard |
78% | Insurance Carrier |
of the commercial market | (Risk bearing) |
(Admitted market)1 |
Insureds Retail | Bespoke, complex, | ||
or larger risks | |||
Broker | 22% | ||
(Commission | of the commercial market | ||
and fee model) | |||
(E&S market) | Wholesale Broker | ||
Underwriting Manager | |||
(Commission and fee model) |
Specialty
Insurance Carrier
(Risk bearing)
5 | |||
Source: SNL, AM Best September 13, 2023 Market Segment Report; 1 ~22% of Ryan Specialty's business was in the admitted market for the year | ended 12/31/2023 | ||
78% OF OUR PREMIUMS ARE PLACED IN THE ATTRACTIVE E&S MARKET1
WHAT IS THE E&S MARKET?
Market for highly specialized
insurance risks
Freedom of rate and form
Tailor coverage to the needs
of insureds
Facilitates coverage which wouldn't be
possible otherwise
WHAT IS DRIVING THE E&S MARKET?
Increasing catastrophe losses and risk of climate change
Increasing jury verdicts and social inflation
Proliferation of cyber threats as more business is done online
Emergence of novel health risks
1 For the year ended 12/31/2023
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TOTAL ADDRESSABLE MARKET IS POISED FOR FURTHER GAINS
E&S PREMIUMS & TOTAL NORTH AMERICA COMMERCIAL P&C PREMIUMS
RYAN Total Addressable Market
($bn)
Commercial Lines Premium
E&S Premium
$450
E&S CAGR1
Underlying E&S Market
$292
$258$41
$356 $98 10.2%
$66
+ | Specialized Admitted Market P&C |
+ | International P&C |
$149
$12
$137
$33 $235 $32
$224 $203
$251
Admitted Market
$351 CAGR1
$2904.4%
+ | Group Benefits |
+ | Alternative Risk |
+ | Reinsurance Underwriting |
2000 | 2005 | 2010 | 2015 | 2020 | 2022 | |
E&S % | 8% | 13% | 14% | 14% | 19% | 22% |
of Total | ||||||
Extensive Market Opportunity
Source: SNL, AM Best September 13, 2023 Market Segment Report. 1 For the period 2000 to 2022.
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A CLEAR VALUE PROPOSITION
Retail Brokers | Employees | Carriers |
◼ Wholesale brokers are a "force | ◼ Independent wholesalers are a destination | ◼ Carriers rely on wholesale brokers and |
multiplier" for retail brokers: | of choice - the most talented professionals | MGAs / MGUs for product expertise and |
◼ Specialized expertise | want to work with: | distribution capabilities: |
◼ More efficient results for their | ◼ All retail brokers, only possible | ◼ Access to >20,000 retail brokers |
through independence | ||
clients | ◼ Gain the ability to quickly enter | |
◼ Access to industry-leading talent on a | ◼ Platform that provides the highest | new markets on a variable cost |
earnings potential | basis | |
variable cost basis | ||
◼ Entrepreneurial culture | ||
Retailers have used wholesalers for | Ryan Specialty had 98% | Quality submissions and underwriting |
over 85% of E&S placements | expertise are paramount to | |
producer retention in 2023 | ||
over the last 5 years1 | preserving underwriting performance | |
1 Per AM Best September 13, 2023 Market Segment Report
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WHOLESALE BROKERS & MGUS OFFER A UNIQUE VALUE TO OUR CLIENTS
Product | |
Expertise | |
MGUs | |
Provide | Industry |
Lasting | Expertise |
Solutions | |
Wholesale | |
Value | |
Proposition | |
Strength of | Depth & |
Relationships | |
Breadth of | |
Drive Client | |
Platform | |
Outcomes |
Speed &
Efficiency
2022 U.S. E&S Distribution of Premiums1
% of | ||
Channel | premiums | RYAN capabilities |
Wholesale agent / broker | 42% | |
without binding authority | ||
Wholesale agent / broker | 14% | |
with binding authority | ||
Program manager and/or | ||
Managing General | 18% | |
Underwriters | ||
Retail agent / broker | 16% | |
Direct procurement / Other | 10% | |
Ryan Specialty can access 74% of ~$98bn market
1 Per AM Best September 13, 2023 Market Segment Report. Figures may not add due to rounding.
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COMPREHENSIVE, FULL SERVICE PRODUCT OFFERING
Wholesale | Binding | Underwriting |
Brokerage | ||
Authority | Management | |
64% | 14% | 22% |
Brand
Operating
model
Value
proposition
- Distributes a wide range of products from insurance carriers to retail brokers
- Focused, specialized servicing of retail agent's most challenging risks
- Places larger-volume, smaller premium policies efficiently with insurance carriers
- Timely and secure access to insurance carriers through in-house binding arrangements
- Designs, underwrites, binds and administers policies on behalf of carriers
- Provides carriers with effective market expertise in distinct and complex niches
Illustrative coverages
Construction liability Directors and officers Real Estate / Habitational Environmental liability Coastal wind coverage
Manufacturing | Cyber |
Start-ups | Renewable energy |
Distressed property | Professional liability |
Subsidized housing | Transactional liability |
Long-haul trucking | Product liability |
Note: Specialty mix represents 3/31/24 LTM Net Commissions and Fees
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Disclaimer
Ryan Specialty Holdings Inc. published this content on 16 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 May 2024 19:06:04 UTC.