Ryan Specialty Holdings Inc. Thursday reported $690.2 million in first-quarter revenue, a 25% increase from the prior-year period, driven by strong organic growth and significant contributions from recent acquisitions.
Top executives said during the first-quarter earnings call that the Chicago-based specialty intermediary is well positioned to navigate global trade uncertainty due to its diversified business and the resilience of the specialty and excess and surplus markets, where many products are compulsory.
Acquisitions contributed 13 percentage points to the company’s revenue growth in the quarter — “the largest contribution from M&A in over three years, offset by a slight decline in fiduciary investment income,” Patrick G. Ryan, founder and executive chairman of Ryan Specialty, said during the earnings call.
The recently announced acquisition of USQRisk Holdings LLC, which closed Thursday, adds approximately $11 million of incremental annualized revenue, Ryan Specialty CEO Tim Turner said during the call.
“Our pipeline continues to be robust, including small, mid-sized and large deals,” Mr. Turner said.
Ryan Specialty reported first-quarter organic revenue growth of 12.9%, compared with 13.7% in the prior-year period.
Among its three divisions, wholesale brokerage reported net commissions and fees of $360.79 million, up 11.5%; underwriting management reported $213.39 million, up 69.6%; and binding authority reported $101.95 million, up 15%.
The company reported a net loss of $4.4 million, compared with net income of $40.7 million in last year’s first quarter. This was due to higher income tax expense related to the legal entity reorganization following Ryan Specialty’s acquisition of property managing general underwriter Velocity Risk Underwriters LLC.
Each of Ryan Specialty’s specialty businesses saw double-digit top line growth, Mr. Turner said.
Wholesale brokerage delivered modest growth in property despite a very challenging environment, he said.
“Property pricing declines continued along the same trend that we experienced in the fourth quarter. However, despite the softer pricing, we overcame these trends,” Mr. Turner said.
The casualty practice saw strong new business and high renewal retention in the quarter. “We saw strong growth for habitational risks, transportation, construction and health care,” he said.
In transportation, difficult loss trends driven by economic and social inflation are “driving carriers to increase rates, pull back appetite and, in some cases, exit markets completely,” Mr. Turner said.
Casualty will be “a strong driver of growth,” moving forward, he said.
Recent acquisitions added more than 50 percentage points of growth to the top line of the brokerage’s underwriting management specialty, he said.