Ryan Specialty Holdings Inc. said Thursday it has agreed to buy builders risk specialist US Assure Insurance Services of Florida Inc., which does business as InsuranceLink, for up to $1.48 billion.
The announcement came as the specialty intermediary announced a nearly 20% increase in second-quarter revenue.
Ryan Specialty will pay $1.08 billion for US Assure and up to $400 million more in performance-based consideration. The deal is expected to close on Sept. 1.
The Jacksonville, Florida-based underwriting manager, which was founded in 1977, offers coverage to small and medium-sized businesses involved in residential and commercial construction projects through an exclusive agreement with Zurich American Insurance. About 90% of its submissions are handled through its online portal.
“They’re micro premiums; a lot of people would say you can’t make a profit on that size premium,” said Patrick G. Ryan, CEO of Ryan Specialty, on a conference call with analysts. “The US Assure team several decades ago figured out how to do that and so it’s a very high-value proposition to the contractor.”
US Assure expects to report $122.5 million in revenue in 2024.
Ryan Specialty reported $695.4 million in revenue for the second quarter, an 18.8% increase over the same period last year and 14.2% on an organic basis, which excludes the effect of acquisitions and foreign currency fluctuations.
Among its main divisions, wholesale brokerage reported $444.1 million in revenue, a 16.4% increase over the prior-year period, underwriting management reported $155.5 million, up 27.8%, and binding authorities reported $80.6 million, up 15.6%.
The company reported a profit of $118 million, a 40.8% increase over the prior-year quarter.
Ryan Specialty continues to see price hikes in the excess and surplus lines market, said Timothy W. Turner, president of Ryan Specialty.
“Property continues to see pricing moderation and stabilization after years of large increases, and casualty is seeing price increases accelerating and broadening out across industry classes,” he said.
More liability risks are being placed in the E&S market amid the uncertainty in the market, said Mr. Turner, who was recently named Mr. Ryan’s successor as CEO.
