Chicago-based specialty wholesale brokerage Ryan Specialty Group has filed with the Securities and Exchange Commission (SEC) a proposed initial public offering (IPO) of up to $ 100 million.
The number of shares to be offered and the price range of the proposed offering have not yet been determined.
Upon completion of the proposed IPO, Ryan Specialty Group Holdings will be the sole managing member of Ryan Specialty Group, LLC and will exclusively operate and control all of its business and affairs.
Founded by Patrick G. Ryan in 2010, RSG is a provider of specialty products for insurance brokers, agents and carriers. It provides distribution, underwriting, product development, administration and risk management services by acting as a wholesale broker and underwriter manager.
Ryan Specialty Group Holdings intends to list its shares on the New York Stock Exchange under the symbol “RYAN”.
RSG is the second-largest wholesale property and casualty insurance broker in the United States and the third-largest general property and casualty management and underwriting agency in the United States. Its distribution network includes more than 650 producers who have access to more than 15,500 retail insurance companies and more than 200 surplus and surplus line carriers.
Since 2010, RSG has made 40 acquisitions in various specialties and geographies. In September 2020, RSG acquired All Risks Specialty, the fourth largest wholesale distributor. RSG says the acquisition of All Risks has advanced many of its strategic priorities and improved its competitive position. The company is currently merging the binding authority service model and premium scale of All Risks Specialty with its own technology platform, The Connector, through which retail customers can receive quotes and link policies online.
For the three months ended March 31, 2021 and 2020 and the fiscal years ended December 31, 2020 and 2019, RSG generated:
|â€¢||Revenues of $ 311.5 million, $ 208.2 million, $ 1,018.3 million and $ 765.1 million, respectively;|
|â€¢||Total revenue growth of 49.6%, 39.1%, 33.1% and 25.3%, respectively; and|
|â€¢||Organic revenue growth rate of 18.4%, 30.1%, 20.4% and 17.5%, respectively.|
In its SEC filing, RSG notes that more than 70% of the total premiums it places go to the excess and excess line market, which has grown faster than the admitted market. He believes the higher growth rate of the E&S market is due to the “shift towards complex risks”, which he says will “isolate the E&S market from broader economic trends”. He expects this rise in complex risks to continue, citing cyber threats, health risks and the digital economy.
The company believes it has various competitive advantages, including ‘robust’ access to capital, the absence of channel conflict with its retail insurance broker clients and its platform that can generate revenue synergies and costs.
â€œWe believe that as the complexity of the E&S market continues to intensify, wholesale brokers who do not have sufficient scale or the financial and intellectual capital to invest in the specialized capabilities required will find it difficult to compete effectively. . This will promote the trend of consolidating market share among wholesale insurance brokers who have these capabilities, â€the company wrote.
RSG believes it can grow as a broker of choice in an industry where retail brokers and carriers consolidate and limit the wholesalers they do business with. In addition, its Connector technology allows it to better serve retail insurance brokers by efficiently placing their accounts at low premiums.
RSG said it has identified some markets as potential short-term growth opportunities: cyber, unowned car rentals and living space in New York City.
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