Ryan Specialty’s Q4 results driven by M&A, renewal retentions

Ryan Specialty Holdings Inc. said Thursday that its $663.5 million in fourth-quarter revenue, a 24.5% increase from the year-ago period in 2023, resulted from strong renewal retentions and a record year of mergers and acquisitions.

In its earnings report, the Chicago-based brokerage said it made seven acquisitions that will add over $265 million in annualized revenue.

“Our focus is on the strategic acquisition of specialized expertise, adding new products, capabilities, or geographies for our clients and trading partners, while being disciplined integrators,” Tim Turner, Ryan Specialty CEO, said during the fourth-quarter earnings call.

He said the largest acquisition was the September purchase of US Assure, which added to its “sophisticated set of builder’s risk products” to serve the small- to mid-size enterprise segment.

“This year’s M&A is next year’s organic growth,” said Patrick G. Ryan, founder and executive chairman of Ryan Specialty.

The firm reported organic revenue growth of 11% for the quarter and 12.8% for the year, both figures down from the prior year.

Organic growth was the primary driver of net commissions and fees in Ryan Specialty’s wholesale brokerage, binding authority and underwriting management units. The wholesale brokerage arm earned 57.7% of the net commissions and fees, followed by its underwriting management unit, 30.8%, and the underwriting management specialty, 11.5%.

Ryan Specialty said net income for the quarter, $42.6 million, was also down from the prior-year period and resulted from higher income tax expense and interest expense.

Adjusted net income increased 28.9% to $123.3 million, compared with $95.7 million in the prior-year period, the firm said.

Revenue for 2024 grew 21.1% to $2.5 billion, up from $2 billion in 2023, making it the sixth consecutive year of increasing total revenue by 20% or more, Ryan Specialty said.