CHICAGO & NEW YORK - Ryan Specialty (NYSE: RYAN), a global specialty insurance organization, has entered into a definitive agreement to acquire the Property and Casualty (P&C) managing general underwriters (MGUs) from Ethos Specialty Insurance, LLC, a subsidiary of Ascot Group Limited. The transaction, which is set to be finalized in September 2024, excludes the Ethos Transactional Liability MGU, which will remain with Ascot Group.
Ethos P&C, established in 2017 by Ascot Group, has developed a portfolio of eight programs that underwrite diverse insurance products through a panel of carriers. Their property division focuses on sectors such as manufacturing and warehousing, offering specialized coverages like excess property and wind deductible buydowns. In the casualty market, Ethos P&C provides insurance for New York contractors, construction wraps, real estate, and CleanTech general liability.
Patrick G. Ryan, Founder, Chairman & CEO of Ryan Specialty, praised Ethos P&C for its innovative approach and service in niche specialty lines, noting that the acquisition will enhance Ryan Specialty's offerings and depth. He expressed enthusiasm for the integration of Ethos P&C's experienced underwriters into the Ryan Specialty team.
Jonathan Zaffino, CEO and President of Ascot Group, highlighted Ethos Specialty's success in growth and profitability and anticipates that the transaction will support Ascot's strategic goals while creating new opportunities for the Ethos P&C team under the umbrella of Ryan Specialty.
The financial terms of the deal were not disclosed. Ethos P&C's operating revenue was reported to be approximately $11 million for the 12-month period ending June 30, 2024. Evercore acted as the exclusive financial advisor to Ascot Group for this transaction.
The acquisition is expected to align with Ryan Specialty's mission to deliver specialty insurance solutions and services, including underwriting, product development, and risk management, to brokers, agents, and carriers. The move is also in line with Ascot Group's commitment to underwriting excellence and superior claims service, backed by the Canada Pension Plan Investment Board, which is the owner of Ascot Group.
This article is based on a press release statement.
In other recent news, Ryan Specialty has been making strategic moves to enhance its market position. The company reported a significant increase in its Q2 2024 financial results, with total revenue growing by 18.8% year-over-year to $695 million. A key development in this period was the acquisition of US Assure, a notable player in the builder's risk insurance market, for $1.075 billion. This acquisition is expected to contribute instantly to Ryan Specialty's adjusted earnings per share (EPS) and expand its total addressable market.
In another development, Ryan Specialty has entered into a definitive agreement to acquire certain assets from Geo Underwriting Europe BV, a subsidiary of The Ardonagh Group. The acquisition, set to finalize in the third quarter of this year, will integrate Geo Europe's financial lines business into Ryan Specialty's Underwriting Managers division. Walter Craft, currently the Managing Director and Chief Underwriting Officer for Geo Europe, is expected to join the executive committee of Ryan Financial Lines.
In addition to these acquisitions, Ryan Specialty announced strategic partnerships with MagMutual and Private Client Select. The company also introduced a leadership succession, installing Tim Turner as CEO, Jeremiah Bickham as President, and Janice Hamilton as CFO. These recent developments suggest a period of robust growth and strategic initiatives for Ryan Specialty.
InvestingPro Insights
As Ryan Specialty (NYSE: RYAN) prepares to expand its portfolio through the acquisition of Ethos Specialty Insurance's P&C managing general underwriters, the company's financial health and market performance offer insights into its capacity to integrate and grow with this new venture. According to InvestingPro data, Ryan Specialty boasts a robust market capitalization of $16.9 billion, underlining its significant presence in the insurance sector.
The company's revenue growth has been impressive, with a reported increase of 19.87% over the last twelve months as of Q2 2024. This growth trajectory is indicative of Ryan Specialty's ability to scale its operations and potentially integrate Ethos P&C's suite of insurance products seamlessly. With an operating income margin of 20.24% in the same period, the firm demonstrates strong profitability and operational efficiency, which are crucial for the success of the acquisition.
InvestingPro Tips also shed light on Ryan Specialty's financial outlook. Analysts have revised their earnings upwards for the upcoming period, suggesting confidence in the company's future performance. Additionally, Ryan Specialty has been profitable over the last twelve months, reinforcing the company's financial stability as it embarks on this strategic acquisition.
For investors looking to delve deeper into Ryan Specialty's financial metrics and potential, there are over 6 additional InvestingPro Tips available at InvestingPro. These tips provide further analysis and could be instrumental in making informed investment decisions surrounding the company's latest strategic moves.
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