Ryan Specialty reports revenue rise, cuts 2025 organic growth forecast

Ryan Specialty reported $855.2 million in second-quarter revenue Thursday, a 23% increase over the prior-year period, driven by recent acquisitions and organic growth despite a declining property rate environment.

But the Chicago-based specialty intermediary lowered its full-year organic growth guidance, as organic revenue fell short of expectations in the quarter because of the rapid softening in property rates, which it sees continuing through year-end.

Organic revenue growth guidance for the year was adjusted to 9% to 11% from its previous expectation of 11% to 13%. Second-quarter organic revenue growth was 7.1%, compared with 14.2% in the prior-year period.

“Although organic revenue growth fell short of expectations, I’m pleased with our results, which reflect our continued ability to navigate through this rapidly evolving insurance market and complex macro environment,” Founder and Executive Chairman Patrick G. Ryan said during the earnings call.

The company generated solid new business and high renewal retention, particularly in the casualty market, Mr. Ryan said.

Mergers and acquisitions added 13 percentage points to the company’s top line in the quarter, he said. The company completed three acquisitions in the past few months — USQ Risk, 360 Degree Underwriting and JM Wilson — which contributed to the top line.

Net income increased to $124.7 million, up 5.6% from last year’s second quarter.

Property submission flow remains very strong and retention levels are high, but rate reductions accelerated in June, Ryan Specialty CEO Tim Turner said during the call.

“Last quarter, we saw 10 to 20% reductions on average. This quarter, 20% to 30%,” Mr. Turner said, adding, “We believe that these rate depressions are temporary.”

“We remain relentless in our goal to yet again deliver double-digit organic growth for the full year,” he said.

Ryan Specialty offset these headwinds with “very strong casualty performance” in the quarter, and professional liability saw double-digit growth in all lines, he said.

“We saw strength in a number of areas, most notably transportation, habitational risks, public entities, sports and entertainment, health care, social and human services and consumer product liability,” Mr. Turner said.

In Ryan Specialty’s three divisions, wholesale brokerage reported net commissions and fees of $477.17 million in the quarter, up 7%; underwriting management reported $269.17 million, up 73%; and binding authority reported $94.52 million, up 17%.

The company’s M&A pipeline “continues to be robust, including both tuck-ins and large deals,” Mr. Turner said.

Ryan Specialty also announced the expansion of its strategic alliance with Nationwide Mutual. Markel Insurance announced Wednesday it was shuttering its global reinsurance operation and agreed to sell the renewal rights to Nationwide.

Ryan Specialty will handle the underwriting and management of the business, which totals $1.2 billion in premium, for Nationwide.

“Ryan Re will be getting a diversified portfolio with complimentary lines and new relationships,” Mr. Ryan said.