Q4 2023 Ryan Specialty Holdings Inc Earnings Call
Operator: Good afternoon, and thank you for joining us today for Ryan Specialty Holdings' fourth quarter and full year 2023 earnings conference call. In addition to this call, the company filed a press release with the SEC earlier this afternoon, which has also been posted on its website at ryanspecialty.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements. Investors should not place undue reliance on any forward-looking statement.
Good afternoon, and thank you for joining us today for Ryan specialty Holdings' fourth quarter and full year 2023 earnings conference call.
Into this call the company filed a press release with the SEC earlier. This afternoon, which has also been posted on its website at Bryan specialty Dot com.
On today's call management's prepared remarks and answers to your questions may contain forward looking statements.
Investors should not place undue reliance on any forward looking statement.
Operator: These statements are based on management's current expectations and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today. Listeners are encouraged to review the more detailed discussion of these risk factors contained in the company's filings with the SEC. The company assumes no duty to update such forward-looking statements in the future, except as required by law. Additionally, certain non-GAAP financial measures will be discussed on this call and should not be considered in isolation or as a substitute for the financial information presented in accordance with GAAP.
These statements are based on management's current expectations and beliefs are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today.
MS are encouraged to review the more detailed discussion of these risk factors contained in the company's filings with the S E T.
The company assumes no duty to update such forward looking statements in the future except as required by law.
Additionally, certain non-GAAP financial measures will be discussed on this call and should not be considered in isolation or as a substitute for the financial information presented in accordance with GAAP.
Operator: Reconciliations of these non-GAAP financial measures to the most closely comparable measures prepared in accordance with GAAP are included in the earnings release, which is filed with the SEC and is available on the company's website. With that, I'd now like to turn the call over to Founder, Chairman, and Chief Executive Officer of Ryan Specialty, Pat Ryan. Mr. Ryan, please go ahead, sir.
Reconciliations of these non-GAAP financial measures of the most closely comparable measures prepared in accordance with GAAP are included in the earnings release, which was filed with the S E T and available on the company's website.
Speaker Change: With that I'd now like to turn the call over to founder Chairman and Chief Executive Officer, Ryan Specialty Pat Ryan Mr. Wang. Please go ahead Sir.
Pat Ryan: Good afternoon and thank you for joining us to discuss our fourth quarter results. With me on today's call is our president, Tim Turner, our CFO, Jeremiah Bickham, and our CEO of Underwriting Managers, Myles Wuller, also with us as our Director of Investor Relations, Nick Messick. 2023 was another outstanding year for Ryan Specialty. Our team continues to excel with their steadfast efforts to deliver top quality service to our clients, for a combination of industry leading talent, and dedication to our clients, we generated another year of strong results, while making long-term sustainable investments in our business to fortify our competitive position. For the full year, we surpassed revenues of $2 billion. 20.4% year over year, driven by organic growth of 15%, on top of the 16.4%. 2022.
Speaker Change: Good afternoon, and thank you for joining us to discuss our fourth quarter results with me on today's call is our president Tim Turner.
Speaker Change: Our CFO Jerome I pick them.
Speaker Change: And our CEO of underwriting managers miles willer.
Speaker Change: Also with US is our director of Investor Relations deck Messick 20, twenty-three was another outstanding year for Ryan specialty.
Speaker Change: Our team continues to excel with our steadfast efforts to do.
Speaker Change: Deliver top quality service to our clients.
Speaker Change: Through a combination of industry, leading talent and dedication to our class b generated another year of strong results.
Speaker Change: Making long term sustainable investments in our business to fortify our competitive position.
Speaker Change: For the full year, we surpassed revenues of 2 billion.
Speaker Change: Up 24% year over year, driven by organic growth of 15%.
Speaker Change: On top of the 16, 4% in 'twenty to 'twenty two.
Pat Ryan: We also had a meaningful contribution from recent M&A. We grew full-year adjusted EBITDAC by 20.7% to $625 million and expanded adjusted EBITDAC margins by 10 basis points to 30.1%. Adjusted earnings per share grew 20% to $1.38. We also successfully executed on our strategy to add to our total addressable market. Our overall strategy is aligned around serving the evolving and growing needs of our clients in order to provide a dynamic value proposition. Through a double-digit organic growth engine and our M&A strategy, we are steadily expanding our total addressable market within Specialty Insurance, particularly with targeted investment and Delegated Authority benefits and alternative risk, as well as deepening our considerable moat by enhancing our scale, scope, and intellectual capital. 2023 marked our second-best year for M&A, only topped in 2020 when we acquired all risk.
Speaker Change: We also had a meaningful contribution from recent M&A.
Speaker Change: We grew full year, adjusted EBITDA, 27% to $625 million and expanded adjusted EBITDA margins by 10 basis points to 31%.
Speaker Change: Adjusted earnings per share grew 20% to $1 38.
Speaker Change: Yeah.
Speaker Change: We also successfully executed on our strategy to add to our total addressable market.
Speaker Change: Our overall strategy is aligned around serving the evolving and growing needs of our clients in order to provide a dynamic value proposition.
Speaker Change: For a double digit organic growth engine and our M&A strategy, we are steadily expanding our total addressable market within specialty insurance, particularly.
Speaker Change: Particularly with targeted investments and delegated authority bed.
Speaker Change: If it's.
Speaker Change: Alternative risks.
Speaker Change: As well as deepening our considerable moat by enhancing our scale scope and intellectual capital.
Speaker Change: Twenty-three marked our second best year for M&A.
Speaker Change: Really top in 2020, one we acquired all risks.
Pat Ryan: We successfully completed and announced several acquisitions, with annual historic revenue totaling in excess of $140 million, adding and integrating new capabilities to each of our three specialties, broadening our geographic scope and capabilities of the Soldiers Insurance Service, deepened our scale in our key urban centers, and added high-quality talent to our professional lines, cyber liability, and property team. Ace, point six inaccuracy, provided foundational capabilities for our employee benefits distribution and underwriting platform and are rapidly developing new products and service offerings to help our clients with integrated health solutions. In late December, we signed a definitive agreement to acquire Castile Lender Riding Agents, which is anticipated to close in the first half of this year.
Speaker Change: We successfully completed and announced several acquisitions with annual historic revenue totaling in excess of $140 million, adding.
Speaker Change: Adding and integrating new capabilities to each of our three specialties.
Griffin underwriting surfaces broadened our geographic scope and capabilities.
Binding authority and brokerage specialties.
Speaker Change: So it was just insurance services deepened our scale in our key urban centers.
Speaker Change: And that is of high quality talent to our professional lines cyber liability and property teams.
Speaker Change: Ace 0.6, and Nokia risk provided foundational capabilities for our employee benefits distribution underwriting platform.
Speaker Change: In a rapidly developing new products and service offerings.
Speaker Change: To help our clients with integrated health solutions.
Speaker Change: In late December we signed a definitive agreement to acquire Castille underwriting agencies.
Speaker Change: As anticipated to close in the first half of this year.
Pat Ryan: We expect the Castile team to add approximately $44 million of annual revenue. Asheville adds top talent and differentiated intellectual capital to 13 unique MGUs and has an excellent track record of delivering strong underwriting profits. Capital Providers, or our geographic focus in the UK and Europe, significantly expands our international footprint, and we expect our management team and operations to be a catalyst for new delegated underwriting authority start-ups and accelerated international expansion. Further, we've developed new proprietary products and capabilities in underwriting management with multiple transportation facilities and lots verdant our high net worth MGU, offering coastal wind and wildfire coverage to a highly dislocated homeowners insurance In addition, several of our MGUs have expanded geographically to the UK, Canada, and Singapore, growing our global footprint and expanding our total addressable market.
Speaker Change: We expect the cast L team to add approximately 44 billion of annual revenue.
Speaker Change: I still large top talent and differentiated intellectual capital to 13 unique M. G use.
Speaker Change: And that has an excellent track record.
Speaker Change: <unk> strong underwriting profits towards capital providers.
Speaker Change: So geographic focus in the U K and Europe will significantly expand our international footprint.
Speaker Change: We expect our management team and operations to be a catalyst for new delegated underwriting authority startups and accelerated international expansion.
Speaker Change: We've developed a new proprietary products and capabilities and underwriting management, but multiple transportation facilities.
Speaker Change: Lots of verdant, a high net worth M. G U offering coastal wind wildfire coverage to a highly dislocated homeowners insurance market.
Speaker Change: Dish in several of our EMS use of expanded geographically in the U K, Canada and Singapore.
Speaker Change: Our global footprint and expanding our total addressable market in.
Pat Ryan: In particular, we're excited about Per Se International, our Wind and Solar Property MGU with their recent launch in the UK, stepping back. Our delegated authority specialties are well-positioned to execute on both organic and inorganic opportunities. Our offering to carriers is stronger than ever, built through the investment in top talent and a heavily resourced platform which includes actuarial and IT support as well as broad-based distribution. Our market position is further strengthened by our ability to retain our talent through our culture of empowerment, innovation, and client centricity, and share a like-minded view of risk in partnership with our carriers, as demonstrated by our excellent track record of underwriting results. We are confident that our investment in people and the platform will help ensure our ability to sustainably grow our value proposition over the longer term and perform well through economic cycles.
Speaker Change: In particular, we're excited about per Se international.
Speaker Change: Wind and solar property M. G U with the recent launch in the U K.
Speaker Change: Stepping back our delegated authority specialties are well positioned to execute on both organic and inorganic opportunities.
Speaker Change: Our offering to carriers is stronger than ever.
Speaker Change: Built through investment in top talent and are heavily resource platform, which includes actuarial and I T support as well as broad based distribution.
Speaker Change: Yeah.
Speaker Change: Our market position is further strengthened by our ability to retain our talent through our culture of empowerment innovation and client Centricity.
Speaker Change: We share a like minded view of risk in partnership with our carriers.
Speaker Change: Demonstrated by our excellent track record of underwriting results.
Speaker Change: We are confident that our investment in people and the platform will help ensure our ability to sustainably grow our value proposition over the longer term and perform well through economic cycles.
Pat Ryan: Turning to talent, we made strategic investments in talent in 2023 to further strengthen our capabilities in both current and developing lines of business on the back of onboarding our largest production class in history in 2022. Collectively, these investments and talent are well on track to meaningfully contribute to our future performance. As we've noted previously, they are a key part of our proven winning formula to maintain and strengthen our long-term growth prospects. We were pleased to finish the year once again.
Speaker Change: Turning to talent.
Speaker Change: Strategic investments in talent 20, twenty-three to further strengthen our capabilities in both current and developing lines of business.
Speaker Change: Of Onboarding, our largest production class in history in 2022.
Speaker Change: <unk> these investments in talent are well on track to meaningfully contribute to our future performance.
Speaker Change: As we've noted previously.
Speaker Change: They are a key part of our proven winning formula to maintain and strengthen our long term growth prospects we.
Speaker Change: We were pleased to finish the year once again with industry, leading producer retention.
Pat Ryan: Industry Leading Producer Retouch, while we have been successful at onboarding keytel, it's equally important to maintain a winning, empowering culture that ensures our top producers remain at our firm. We continue to succeed on that front. It is both the exceptional quality and quantity of talent that distinguishes Ryan Specialty from the rest of the industry.
Speaker Change: Well, we have been successful Onboarding key talent, it's equally important to maintain a winning empowering culture.
Speaker Change: Insurers are top producers remain out of our firm.
Speaker Change: We continue succeed on that front. It is both the exceptional quality and quantity of talent that distinguishes Ryan, especially from the rest of the industry.
Pat Ryan: We remain dedicated to recruiting, training, and developing large teams of talent, from college hires to experienced brokers and underwriters. As a result of our efforts, we accelerate the learning curve of these individuals, helping them to compete at the highest level. Our clients consistently emphasize that it's our differentiated talent that ensures they can trust us to solve their most challenging problems. Our commitment to onboarding and retaining the best and most innovative talent, and our emphasis on delivering value for our clients, has been vital to our mission since our founding. This is why we continue to generate industry-leading organic growth and why we believe we can successfully sustain these levels of growth over the long term. Allocation, M&A remains our top priority, and we enter the year with significant momentum and are cultivating a wealth of opportunity.
Speaker Change: We remain dedicated to recruiting training and developing large teams of talent.
Speaker Change: From college hires two experienced brokers and underwriters.
Speaker Change: As a result of our efforts we accelerate the learning curve of these individuals', which helps them compete at the highest level our clients consistently emphasize a differentiated talent and ensure that they can trust us to solve their most challenging problems.
Speaker Change: Our commitment to Onboarding and retaining the best and most innovative talent and our emphasis on delivering value for our clients.
Speaker Change: It's been vital to our mission since our founding.
Speaker Change: This is why we continue to generate industry, leading organic growth and why we believe we can successfully sustain these levels of growth over the long term.
Speaker Change: Turning to capital allocation M&A remains our top priority.
Speaker Change: We entered the year with significant momentum.
Speaker Change: We're cultivating a wealth of opportunities and as market conditions are improving we have an ambitious M&A outlook for 'twenty 'twenty four.
Pat Ryan: And as market conditions are improving, we have an ambitious M&A outlook for 2020. We continue to see substantial M&A opportunities that we expect will bolster our organic growth engine. Our M&A pipeline remains robust, and includes both tokens and potential large deals. As we've consistently noted, we will only move forward when all of our criteria for M&A are met. Each acquisition must be a strong cultural fit. Strategic on the, to desolate.
Speaker Change: We continue to see substantial M&A opportunities that we expect will bolster our organic growth engine.
Speaker Change: Our M&A pipeline remains robust and.
Speaker Change: And includes both tuck ins and potential large deals.
Speaker Change: As we've consistently noted we will only move forward with all of our criteria for M&A are met.
Each acquisition must be a strong cultural fit strategically.
Speaker Change: Strategic and accretive.
Speaker Change: Additionally.
Pat Ryan: Given our broad financial flexibility, We are pleased to initiate a quarterly dividend program to return capital and create additional value for our shareholders, assisted by our board to initiate a cash dividend program reflects confidence in our ability to continue to drive sustainable, profitable growth, generates strong cash flow over the long term, and execute on a robust M&A program, is also a testament of our ability to be excellent stewards of capital for our investors, as we believe we can both seamlessly execute on our robust M&A pipeline for years to come and distribute dividends to our service. We remain firmly committed to our successful long-term strategy. One, organically investing in our business to support sustainable and profitable growth. Two, executing on our discipline M&A strategy, with High Quality Acquisitions. Three, maintaining our strong balance sheet while returning excess cash, all of which create value for our shareholders. As we progress through 2024, there are four things you can continue to expect from Ryan Specialty. First.
Speaker Change: Given our broad financial flexibility we have.
Speaker Change: Were pleased to initiate a quarterly dividend program to return capital and create additional value for our shareholders.
Speaker Change: The decision by our board to initiate a cash dividend program reflects confidence in our ability to continue to drive sustainable profitable growth.
Speaker Change: Generate strong cash flow over the long term and.
Speaker Change: And execute on our robust M&A program.
Speaker Change: It is also a testament of our ability to be excellent stewards of capital for our investors as we believe we can vote seamlessly execute on a robust M&A pipeline for years to come and distribute dividends to our shareholders.
Speaker Change: We remain firmly committed to our successful long term strategy.
Speaker Change: One organically investing in our business to support sustainable and profitable growth too.
Speaker Change: Two.
Speaker Change: Executing on our disciplined M&A strategy with high quality acquisitions, and three maintaining our strong balance sheet, while returning excess cash all of which create value for our shareholders.
Speaker Change: As we progressed through 'twenty 'twenty four there are four things you can continue to expect from Ryan specially first we expect to generate another year of double digit organic growth.
Pat Ryan: We expect to generate another year of double-digit organic growth, driven by secular growth factors and the strategies we are pursuing, secular growth drivers like retail brokers becoming larger through solid organic growth and ongoing industry consolidation, retail brokers pursuing panel consolidation for both open market wholesale and delegated authority, in order to have fewer, more sophisticated counterparties with the necessary scale to meet their needs. We believe that we are one of a few specialty insurance firms that meet those criteria. The world continues to increase in risk and complexity. This is driving more risk and new exposures into the E&S market, which offers significantly more freedom of rate and form and is therefore able to provide solutions that otherwise are not available. We believe the E&S market will keep growing, and consistently outpace growth in the admitted market, over Saturday with any cyclical shift in certain lines with respect to submission flow and price.
Speaker Change: Driven by secular growth factors and the strategies we are pursuing.
Speaker Change: Secondly, the growth drivers like retail brokers, becoming larger through solid organic growth and ongoing industry consolidation.
Speaker Change: Retail brokers pursuing panel consolidation for both open market wholesale and delegated authority in order to fewer more sophisticated counterparties whether.
Speaker Change: The necessary scale to meet their needs.
Speaker Change: We believe that we're one of very few specialty insurance firms that meet those criteria.
Speaker Change: The world continuing to increase in risk and complexity. This is driving more risks and new exposures into the E&S marketplace, which offers significantly more freedom of rate and form.
Speaker Change: And therefore, we're able to provide solutions that otherwise are not available.
Speaker Change: We believe the E&S market will keep growing and consistently outpaced growth in the admitted market.
Speaker Change: Overshadowing any cyclical shifts in certain lines with respect to submission flow and pricing.
Pat Ryan: This is further aided by changes in distribution trends, with a growing number of wholesale-only E&S carriers in the marketplace. Adding to these secular growth drivers is our unique competitive position in high-growth businesses, thank you very much, all of which serve to bolster our organic growth. We remain confident that these ongoing trends are sustainable and will continue to support our growth for the foreseeable future.
Speaker Change: This is further aided by changes in distribution trends with a growing number of wholesale only E&S carriers in the marketplace add.
Speaker Change: Adding to these secular growth drivers is our unique competitive position in high growth businesses. The expansion of our total addressable market and our ability to innovate with new product development.
Speaker Change: All of which serve to bolster our organic growth engine.
Speaker Change: We remain confident that these ongoing trends are sustainable and will continue to support our growth for the foreseeable future.
Pat Ryan: We will continue to grow through M&A. As mentioned earlier, we are steadily expanding our total addressable market within specialty insurance, including delegated authority, alternative risks, and benefits, and deepening our considerable moat by enhancing our scale, scope, and intellectual capital. We will complete the integration of our 2023 acquisitions and onboard the great team from Castile. In addition, we will help these firms grow on our platform through our broad distribution network, access to our proprietary products, and our deep carrier relationships.
Speaker Change: Second we will continue to grow through M&A.
Speaker Change: As mentioned earlier, we are steadily expanding our total addressable market within specialty insurance, including a delegated authority alternative risks benefits and deepening our considerable moat by enhancing our scale scope and intellectual capital.
Speaker Change: We will complete the integration of our 2023 acquisitions and on board the great team from cashed out.
Speaker Change: Further we will help these firms grow on our platform through our broad distribution network access to our proprietary products and our deep carrier relationships.
Pat Ryan: Third, we will continue to thoughtfully invest in our business. Expect another year of strategic hiring of top industry talent across our specialties, and we'll make additional investments in our systems and operations to ensure we remain at the forefront of the industry. Lastly, we will continue to execute on our efficiency in it.
Speaker Change: Third we will continue to thoughtfully invest in our business.
Speaker Change: Specced, another year of strategic hiring of top industry talent across our specialties and will make additional investments in our systems and operations to ensure we remain at the forefront of the industry.
Speaker Change: Lastly.
Speaker Change: We will continue to execute on our efficiency initiatives.
Pat Ryan: Notably, we will execute on our Accelerate 2025 program, driving continued growth and innovation, delivering sustainable productivity improvements over the long term, and accelerating our margin improvement. As a reminder, we expect to generate annual savings of approximately $50 million in 2025, with some of the savings to be realized in 2024. With our flexible and differentiated business model, unparalleled expertise, innovation, and work ethic that our clients and trading partners value, we're well positioned for another strong year in 2024. In summary, I remain incredibly proud of our entire team who are delivering another year of outstanding results and adding value for our clients, trading partners, and ultimately, our shareholders. I'm pleased to turn it over to Tim. Tim.
Notably we will execute on our accelerate 2025 program driving continued growth and innovation delivering sustainable productivity improvements over the long term and like celebrating our margin improvement.
Speaker Change: As a reminder, we expect to generate annual savings of approximately $50 million in 'twenty 'twenty five but some of the savings to be realized in 2024.
Speaker Change: Our flexible and differentiated business model.
Speaker Change: Unparalleled expertise innovation and work ethic that our clients and trading partners value.
Speaker Change: We are well positioned for another strong year in 'twenty 'twenty four.
Speaker Change: In summary.
Speaker Change: I remain incredibly proud of our entire team for delivering another year of outstanding results and adding value for our clients trading partners and ultimately our shareholders.
Speaker Change: I'm pleased to turn it over to Tim Tim.
Tim Turner: Thank you very much, Pat. The fourth quarter capped off an excellent 2023 for Ryan Specialty as we generated another quarter of double-digit growth across all our specialties. Turning to the market, Ongoing industry trends persist or are accelerating, notably an increasingly complex climate and legal environment marked by nuclear verdicts, accelerating social inflation, rising uncertainty regarding reserve adequacy, and a pullback in risk appetite from the admitted market. These trends are driving more risks into the E&S marketplace, which is better able to handle a more uncertain environment as it offers significantly more freedom of rate and form, and the ability for insurers and underwriters to As a result, the E&S market is seeing a consistent flow of risk, as it is able to provide critical solutions that would otherwise not be available. This continues to create fantastic opportunities for our specialized and industry-leading teams to provide solutions on behalf of our clients. Diving into our specialties, our Wholesale Brokerage Specialty generated another quarter of strong growth. In property, elevated loss activity, including $50 billion of insured losses from severe convective storms, higher reinsurance costs, and retentions of risk.
Tim Turner: Thank you very much Pat the fourth quarter capped off an excellent 2023 for Ryan specialty as we generated another quarter of double digit growth across all of our specialties.
Tim Turner: Turning to the market.
Ongoing industry trends persist or accelerating notably and increasingly complex climate and legal environment marked by nuclear verdicts accelerating social inflation.
Tim Turner: Rising uncertainty regarding reserve adequacy, and a pullback in risk appetite from the admitted market.
Tim Turner: These trends are driving more risks into the E&S marketplace, which is a better which is better able to handle a more uncertain environment as it offers significantly more freedom of rate and form.
Tim Turner: And the ability for insurers and underwriters to adjust more quickly.
Tim Turner: As a result, the E&S market is seeing a consistent flow of risks.
Tim Turner: As it is able to provide critical solutions that would otherwise not be available.
Tim Turner: This continues to create fantastic opportunities for our specialized and industry, leading teams to provide solutions on behalf of our clients diving into our specialties, our wholesale brokerage specialty generated another quarter of strong growth in property elevated loss activity.
Tim Turner: <unk> 50 billion of insured losses from severe convective storms higher reinsurance costs and retentions of risk persistent inflation and ongoing focus on insurance to value make for a challenging market.
Tim Turner: Persistent inflation and ongoing focus on insurance to value make for a challenging market. However, these factors are continuing to drive the flow of new business into the E&S market. We continue to see the ENS market respond well, yet with continued discipline and tighter limit management, especially around coastal property, wildfire, and flood, along with increased concern for earthquake risk, given the heightened frequency and severity of property losses, particularly in coastal areas and more recently in the Midwest. We believe risks will remain in the E&S market.
Tim Turner: Factors are continuing to drive flow of new business into the E&S market.
Tim Turner: We continue to see the E&S market respond well, yet with continued discipline and tighter limit management, especially around coastal property wildfire and flood along with increased concern of earthquake risk.
Tim Turner: Given the heightened frequency and severity of property losses, particularly in coastal areas and more recently in the Midwest. We believe risks will remain in the E&S market.
Tim Turner: This will drive recurring opportunities for talented experts to deliver critical solutions to our trading partners in placing these complex risks. We believe property should continue to be a strong driver of growth for Ryan Specialty in 2024, driven by sustained flow into the channel and continued yet more stabilizing rate increases. Our casualty practice had another strong quarter, driven by flow into the E&S market in both primary and excess casualty, particularly for habitational risks, health care, transportation, sports and entertainment, and consumer products.
Tim Turner: This will drive recurring opportunities for talented experts to deliver critical solutions to our trading partners and placing these complex risks.
Tim Turner: We believe property should continue to be a strong driver of growth for Ryan specialty in 2024, driven by sustained flow into the channel and continued yet more stabilizing rate increases.
Tim Turner: Our casualty practice had another strong quarter driven by flow into the E&S market in both primary and excess casualty, particularly for habitation all risks health care transportation sports and entertainment and consumer products.
Tim Turner: Our transportation practice saw another quarter of strong flow; difficult loss trends driven by both economic and severe social inflation are driving carrier need for continued rate increases, a pullback in underwriter appetite, and market exits. These casualty classes are experiencing higher loss trends driven by economic and social inflation, reserving issues due to the long tail nature and latency in claims, plus higher reinsurance costs, with our world-class technical expertise and deep bench. We are perfectly positioned to execute and deliver value for our clients, particularly in a more unpredictable market. We are optimistic that casualty will be a strong contributor to our 2024 performance. Overall, it was a great year for our Wholesale Brokerage Specialty. The team remains committed to delivering innovative strategies and products to meet the ever-changing needs of the marketplace for our clients, and we are well-positioned to generate consistent, profitable growth.
Tim Turner: Our transportation practice saw another quarter of strong flow difficult loss trends driven by both economic and severe social inflation are driving carrier need for continued rate increases a pull back and underwriter appetite and market exits.
Tim Turner: These casualty classes are experiencing higher loss trends, driven by economic and social inflation reserving issues due to the long tailed nature and latency and claims plus higher reinsurance costs.
Tim Turner: With our world class technical expertise and deep bench.
Tim Turner: We are perfectly positioned to execute and deliver value for our clients, particularly in a more unpredictable market.
Tim Turner: We are optimistic that casualty will be a strong contributor to our 'twenty 'twenty four performance.
Tim Turner: Overall, it was a great year for our wholesale brokerage specialty the team remains committed to delivering innovative strategies and products to meet the ever changing needs of the marketplace for our clients and we are well positioned to generate consistent profitable growth.
Tim Turner: Now turning to our delegated authority specialties, which include both binding and underwriting management. Our Binding Authority Specialty had another excellent quarter, driven by key contributions from our high-caliber talent and new proprietary products, which make for a seamless experience for our clients on small but tough-to-place commercial P&C risks. We continue to see the consolidation of panels and binding authority as a long-term growth opportunity, and we remain well positioned to capitalize on that opportunity. Our Underwriting Management Specialty performed very well in the quarter, led by Property and Casualty and our Reinsurance MGU, Ryan Reed.
Tim Turner: Now turning to our delegated authority specialties, which include both binding and underwriting management.
Tim Turner: Our binding authority specialty had another excellent quarter driven by key contributions from our high caliber talent and new proprietary products, which make for a seamless experience for our clients on small, but tough to place commercial P&C risks.
Tim Turner: We continue to see the consolidation of panels and binding authority as a long term growth opportunity and we remain well positioned to capitalize on that opportunity.
Tim Turner: Our underwriting management specialty performed very well in the quarter led by property and casualty and our reinsurance M. G. You Ryan Reed.
Tim Turner: We are proud to deliver another year of increasing underwriting profitability for our carrier trading partners, despite multiple adverse market events. We also look forward to the addition of Castel, pending regulatory approval in the UK, which will add top decile talent, expand our international footprint, make us stronger in markets such as the UK and Europe, and position us well to accelerate our international expansion. As Pat mentioned, we made significant progress with respect to our acquisition strategy in 2023; focused execution on the right transactions will enable us to further grow alongside our clients' evolving needs and ensure our ability to sustainably grow our platform over the long term and perform over economic cycles. Turning to price, hard market conditions, including firm or accelerating pricing, have continued into early 2024 in the majority of our business lines. Exceptions remain in the public company, DNO, and cyber world.
Tim Turner: We are proud to deliver another year of increasing underwriting profitability for a carrier trading partners, despite multiple adverse market events.
Tim Turner: We also look forward to the addition of cast all pending regulatory approval in the U K, which will add top decile talent expand our international footprint make us stronger in markets, such as the UK and Europe and.
Tim Turner: And position us well to accelerate our international expansion.
Tim Turner: As Pat mentioned, we made significant progress with respect to our acquisition strategy in 2023.
Tim Turner: Focused execution on the right transactions will enable us to further grow alongside our clients' evolving needs and ensure our ability to sustainably grow our platform over the long term and perform over economic cycles.
Tim Turner: Turning to price.
Tim Turner: The hard market conditions, including firm or accelerating pricing have continued into early 2024, and the majority of our business lines.
Tim Turner: Exceptions remain in public company D&O and cyber.
Tim Turner: As we've noted before, in any cycle, as certain lines are perceived to reach pricing adequacy, admitted markets tend to step back in on certain placements. That said, we still have yet to see this play out, and the standard market has not meaningfully impacted rates or flow in the aggregate. We continue to expect the flow of business into the non-emitted market to be a significant driver of Ryan Specialty's growth, more so than rate. With that, I will now turn the call over to our Chief Financial Officer, Jeremiah Bickham, who will give you more detail on the financial results of our fourth quarter. Thank you. Thank you, Tim.
Tim Turner: As we've noted before in any cycle as certain lines are perceived to reach pricing adequacy admitted markets tend to step back in and certain placements.
Tim Turner: That said, we still have yet to see this play out and the standard market is not meaningfully impacted rate or flow in the aggregate.
Tim Turner: We continue to expect the flow of business into the non admitted market to be a significant driver of Ryan specialties growth more so than rate.
Tim Turner: With that I will now turn the call over to our Chief Financial Officer, Jeremy <unk>, who.
Jeremy: Who will give you more detail on the financial results of our fourth quarter. Thank you.
Jeremiah Bickham: In Q4, we grew total revenue 22.5% period over period to $533 million, fueled by another strong quarter of organic growth at 16.0% and contributions from M&A, which added over 4 percentage points to our top line. Growth was driven by the ongoing tailwinds in much of the E&S market, strong renewal retention, and our ability to win substantial amounts of new business. Adjusted EBITDAC for the fourth quarter grew 24.6% period over period to $159 million.
Jeremy: Thank you Tim in Q4, we grew total revenue 22, 5% period over period to $533 million fueled by another strong quarter of organic growth at 16.0% and contributions from M&A, which added over four percentage points to our top line.
Tim Turner: Growth was driven by the ongoing tailwind in much of the E&S market strong renewal retention and our ability to win substantial amounts of new business.
Tim Turner: Adjusted EBITDAX for the fourth quarter grew 24, 6% period over period to $159 million and adjusted EBIT margin improved 50 basis points to 29, 8% driven by another quarter of strong revenue growth and higher fiduciary investment income, which was partially offset by continued investments.
Jeremiah Bickham: And the adjusted EBITDAC margin improved 50 basis points to 29.8%, driven by another quarter of strong revenue growth and higher fiduciary investment income, which was partially offset by continued investments in our business. Our full year 2023 results were excellent. For the year, we grew total revenue 20.4% to $2.1 billion, driven by organic growth of 15% and contributions from M&A, which added three percentage points to our top line. We grew full-year adjusted EBITDAC 20.7% to $625 million and expanded adjusted EBITDAC margins by 10 basis points to 30.1%. Adjusted EPS grew 20% to $1.38 per share. Turning to our Accelerate 2025 program, we had approximately $12 million in charges for the quarter and $48 million in charges for the year.
Tim Turner: In our business.
Tim Turner: Adjusted EPS grew 29, 6% to 35 per share.
Tim Turner: Our full year 2023 results were excellent for the year. We grew total revenue, 24% to $2 1 billion driven by organic growth of 15% and contributions from M&A, which added three percentage points to our top line.
Tim Turner: We grew full year adjusted EBIT of <unk>, 27% to $625 million and expanded adjusted EBIT margins by 10 basis points to 31%.
Tim Turner: Adjusted EPS grew 20% to $1 38 per share.
Tim Turner: Turning to our accelerate 2025 program, we had approximately $12 million in charges for the quarter and $48 million in charges for the year. We continue to expect cumulative special charges of approximately 90 million under this program and expect annual savings of approximately $50 million in 2025, we expect approximately half of these savings.
Jeremiah Bickham: We continue to expect cumulative special charges of approximately $90 million under this program and expect annual savings of approximately $50 million in 2025. We expect that approximately half of these savings will be realized in 2024. As Pat noted in his remarks, M&A remains the top priority in terms of allocating capital. That said, as a result of the financial flexibility that our business model provides, the board declared a one-time special cash dividend of $0.23 per share and initiated a regular quarterly dividend of $0.11 per share on our outstanding Class A common stock. Both the special and regular quarterly dividends will be payable on March 27th, 2024 to stockholders of record as of the close of business on March 13th, 2024.
Tim Turner: Will be realized in 2024.
Tim Turner: As Pat noted in his remarks M&A remains the top priority in terms of allocating capital.
Tim Turner: That said as a result of the financial flexibility that our business model provides the board declared a one time special cash dividend of 23 cents per share and initiated a regular quarterly dividend of 11 cents per share on our outstanding class a common stock.
Tim Turner: Both the special and regular quarterly dividend will be payable on March 27th 2024 to stockholders of record as of the close of business on March 13th 2024.
Jeremiah Bickham: More information on the attribution of the dividend can be found in our earnings release and will also be presented in our Q110Q. As we initiate our dividend and add this new facet of capital management to our arsenal, it is important to note that we will continue to execute on our robust M&A pipeline, maintain our strong balance sheet, and stay within our stated leverage corridors. We remain committed to being good stewards of capital, both through our M&A strategy and our dividend policy, in order to deliver long-term, sustainable shareholder value. As Pat mentioned, we remain firmly committed to our successful long-term strategy. One, organically investing in our business to support sustainable and profitable growth.
Tim Turner: More information on the attribution of the dividend can be found in our earnings release and will also be presented in our Q1 10-Q.
Tim Turner: As we initiate our dividend and add this new facet of capital management to our Arsenal. It is important to note that we will continue to execute on our robust M&A pipeline maintain our strong balance sheet and stay within our stated leverage corridors, we remain committed to being good stewards of capital both through our M&A strategy.
Tim Turner: <unk> and our dividend policy in order to deliver long term sustainable shareholder value. It's.
Tim Turner: As Pat mentioned, we remain firmly committed to our successful long term strategy, one organically investing in our business to support sustainable and profitable growth to executing on our disciplined M&A strategy with high quality acquisitions, and three maintaining our strong balance sheet, while returning excess cash all.
Jeremiah Bickham: Two, executing on our disciplined M&A strategy with high-quality acquisitions, and three, maintaining our strong balance sheet while returning excess cash, all of which create value for shareholders. Looking forward, we will continue making strategic investments in talent and recruiting. These investments in talent, particularly recruiting new colleagues, historically have offered the highest returns for our shareholders and are part of our proven approach to maintaining our long-term growth prospects. Based on our current forecast, we expect to record gap interest expense, which is net of interest income on our operating funds and includes the recent repricing of our term loan of approximately $120 million in 2024.
Tim Turner: All of which create value for shareholders.
Tim Turner: Looking forward, we will continue making strategic investments in talent and recruitment.
Tim Turner: These investments in talent, particularly recruiting new colleagues historically have offered the highest returns for our shareholders and are part of our proven approach to maintaining our long term growth prospects.
Tim Turner: Based on our current forecast, we expect to record GAAP interest expense, which is net of interest income on our operating funds and includes the recent repricing of our term loan of approximately $120 million in 2024.
Jeremiah Bickham: As Pat and Tim mentioned, we continue to be excited about our long-term growth opportunities and value proposition. As a result, we are guiding full year 2024 organic revenue growth to be between 12.0 and 13.5 percent. We believe our broad-based growth will be driven by our exceptional talent, including our outsized investments in 2022, and the benefits of prior year M&A as we lap 12 months of ownership, exactly as Pat has signaled in many of our prior calls. In addition, we are guiding the adjusted EBITDAC margin for the full year 2024 to be between 31.0 and 31.5%. We expect to recognize approximately half of the $50 million in annual run rate savings from Accelerate 2025 this year, with the majority of those savings falling to our bottom line.
Tim Turner: As patent Tim mentioned, we continue to be excited about our long term growth opportunities and value proposition. As a result, we are guiding full year 2020 for organic revenue growth to be between 12.0 and 13, 5%.
Tim Turner: We believe our broad base growth will be driven by our exceptional talent.
Tim Turner: Including our outsized investments in 2022, and the benefits of prior year M&A as we lap 12 months of ownership exactly as Pat has signaled in many of our prior calls.
Tim Turner: In addition, we are guiding adjusted EBIT margin for the full year 2024 to be between 31.0 and 31, 5% we.
Tim Turner: We expect to recognize approximately half of the $50 million in annual run rate savings from accelerate 2025. This year with the majority of those savings falling to our bottom line those savings will be paired with a return to underlying annual margin expansion in our business.
Tim Turner: In summary, we are very pleased with our 2023 performance and remain excited for both our near and long term prospects.
Tim Turner: Our dynamic and differentiated business model continues to position us well to best serve our clients and to deliver the innovative solutions that our clients have come to expect as a hallmark of Ryan specialty.
Jeremiah Bickham: Those savings will be paired with a return to underlying annual margin expansion in our business. In summary, we are very pleased with our 2023 performance and remain excited for both our near and long-term prospects. Our dynamic and differentiated business model continues to position us well to best serve our clients and to deliver the innovative solutions that our clients have come to expect as a hallmark of Ryan Specialty. With that, we thank you for your time and would like to open up the call for Q&A. Operator.
Speaker Change: With that we thank you for your time and we'd like to open up the call for Q&A operator.
Speaker Change: Thank you well now be conducting a question and answer session.
Speaker Change: Wed like to be placed in the question queue. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he'd like to remove your question from the queue for participants using speaker equipment, maybe necessary to pick up your handset before pressing star one.
Speaker Change: One moment, please while we poll for questions. Our first question today is coming from Elyse Greenspan from Wells Fargo. Your line is that life.
Operator: Thank you. We will now be conducting a question and answer session. If you would like to be placed in the question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the line.
Elyse Greenspan: Hi, Thanks, good evening.
Elyse Greenspan: My first question is on the organic growth outlook whites, you're setting.
Elyse Greenspan: 24, initially at 12 to 13, 5% if I go back 12 months ago, you had this 2023 of 10% to 13%.
Elyse Greenspan: For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1. One moment, please, while we poll for questions. Our first question today is coming from Elyse Greenspan from Wells Fargo. Your line is now live. Hi, thanks. Good evening.
Elyse Greenspan: So.
Elyse Greenspan: I know thats driven by several factors you outlined on the call, but it feels like you feel better about 'twenty four than you did.
Elyse Greenspan: At the at the start of 'twenty, 'twenty, three which would you agree with that statement.
Elyse Greenspan: My first question is on the organic growth outlook, right? So you're setting 2024 initially at 12 to 13.5%. If I go back, you know, 12 months ago, you would have set this 2023 at 10 to 13%. So, you know, I know that's driven by several factors you outlined on the call, but it feels like you feel better about 24 than you did at the start of 2023. Would you agree with that statement? Hi Elise.
Speaker Change: Hi, Lee we feel very good not only about where we finished 2023, but also 2024.
Elyse Greenspan: And we view, 12% to 13% as a very healthy amount of growth now when you are comparing it to 'twenty three and trying to understand if there's a trend.
Speaker Change: The biggest individual variable that explains the difference is really property. So we expect a really strong <unk>.
Speaker Change: Contribution from our property portfolio this year as well as our casualty portfolio. However, we're not counting on the same compounding premium rate increases that we saw last year in property this year.
Pat Ryan: We feel very good not only about where we finished in 2023 but also in 2024. And, you know, we view 12 to 13% as a very healthy amount of growth. Now, when you're comparing it to 23 and trying to understand if there's a trend, the biggest individual variable that explains the difference is really property.
Speaker Change: But as I said 12 to 13 still very healthy and then when you pair that with up to 150 basis points of margin improvement and the contributions from last year's M&A and potential new M&A this year.
Speaker Change: It's I think it's easy to see why we're very excited about our overall growth prospects in 2024.
Speaker Change: And then you guys you were talking about the castle deal and you said now that it helps with international expansion.
Pat Ryan: So we expect a really strong contribution from our property portfolio this year, as well as from our casualty portfolio. However, we're not counting on the same compounding premium rate increases that we saw last year in property this year. But, as I said, 12 to 13% is still very healthy.
Speaker Change: Just give a sense I mean that brings on 44 million, but how do we think about just the international opportunity that you guys see.
Speaker Change: And over what time period could that play out.
Pat Ryan: And then when you pair that with up to 150 basis points of margin improvement and the contributions from last year's M&A and potential new M&A this year, I think it's easy to see why we're very excited about our overall growth prospects in 2024. And then you guys were talking about the CASEL deal, and you said, you know, that it helps with international expansion. You just give a sense, I mean, that brings in $44 million, but how do we think about just the international opportunity that you guys see, and over what time period could that play out? Well, we look at the international market as very much being ripe for delegated authority expense. A lot of that comes from the consolidation of carriers over the last number of years, but also a need for innovation in the European market. We bring innovation, so we believe that planting the flag in Europe as we do to our already existing good business, Castile Talent, that. We'll get quick materialization of productivity improvements and bring innovative products to various European countries. And then how big is Ryan Reed today?
Speaker Change: Well, we look at the international market is.
Speaker Change: It's very much being ripe before.
Speaker Change: Our delegated authority expense.
Speaker Change: A lot of that comes from the consolidation of carriers over the last.
Speaker Change: Number of years.
Speaker Change: But also a need for innovation.
Speaker Change: And in the European market.
Speaker Change: We bring innovation so.
Speaker Change: We believe that planting the flag in.
Speaker Change: In Europe as we.
Speaker Change: To our already existing good business, the kind of style talent.
Speaker Change: But.
Speaker Change: Okay quick materialization of productivity.
Speaker Change: Productivity improvements.
Speaker Change: Bringing innovative products to.
Speaker Change: Various European countries.
Speaker Change: Okay.
Speaker Change: And then how big is how big is Brian we each day.
Speaker Change: I'll pick out that.
Speaker Change: Well, there, but yeah, we don't break it out yes, we don't disclose revs.
Speaker Change: Revenue or profitability at the individual mg level, but it's a great example of innovation a tam expanding de Novo a great partnership that we have with nationwide and it really rapidly growing part of our <unk> portfolio.
Speaker Change: Thank you.
Speaker Change: Thank you next question is coming from Mike Zaremski from BMO capital markets. Your line is now live.
Mike Zaremski: Hey, great.
Mike Zaremski: First question.
Mike Zaremski: I'm contingence and stops for the year I don't know if I I don't I don't think I have the <unk> number, but it looks like for the year.
Pat Ryan: I'll bake it out there. Well, they're big, but we don't break them up. Yeah, we don't disclose revenue or profitability at the individual MGU level, but it's a great example of innovation, a TAM expanding, DeNovo, a great partnership that we have with Nationwide, and a really rapidly growing part of our MGU portfolio. Thank you. Thank you. The next question is coming from Mike Zaremsky from BMO Capital Markets. Your line is now live. Thank you. First question, on the contingent and stops for the year.
Mike Zaremski: It's running a much higher percentage of revenues than.
Mike Zaremski: And last year.
Mike Zaremski: You know any any thoughts any guidance you want to offer us or just how to think about contingency shops, whether this is kind of like 23 with a normal year better than normal year or maybe that the airlines are growing and have a larger could you kind of.
Mike Zaremski: Contribution from contingency thanks.
Jeremiah Bickham: I don't know if I don't I don't think I have the 4Q number, but it looks like for the year it's it's running a much higher percentage of revenues than last year. You know, any thoughts, any guidance you want to offer us or just how to think about contingency subs, whether this is kind of a 23 with a normal year, better than the normal year, or maybe the airlines you're growing up with have a larger contribution from contingency subs. Thanks.
Mike Zaremski: Look.
Speaker Change: We appreciate the question so I think we.
Speaker Change: <unk> highlighted in our last quarter of that.
Speaker Change: We've seen an emergence of profit commissions from even back years.
Speaker Change: In the soft market parts of the cycle, which are a great complement to the results. We've driven so we've seen results from past years. We believe we've delivered a lot of profit to carriers over the last several years, which will continue to emerge as profit commissions over the coming years. So that is part of our go forward plan.
Speaker Change: <unk> process.
Jeremiah Bickham: Look, we appreciate the question. So I think we, we perhaps highlighted in our last quarter that we've seen an emergence of profit commissions from even back years in the soft market parts of the cycle, which are a great complement to the results we've driven. So we've seen results from past years; we believe we've delivered a lot of profit to carriers over the last several years, which will continue to emerge as profit commissions over the coming years. So that is part of our go forward planning process. Of course, those are not out of growth. We don't put contentious, Okay, maybe pivoting back to the organic growth guidance, you've given a lot of good breadcrumbs and just insights on the call so far, but if I just look at, just curious, if I look at the guidance range, it's tighter than you've given in previous years, which seems to kind of, point of view. Adam Klauber, Brian Meredith, Ryan Specialty, I think the simplest way to think about it, Mike, is just that there's less variability, less material variability within the individual variables.
Speaker Change: Of course, those out or how that growth numbers.
Speaker Change: We don't put out a contingent commission right.
Speaker Change: Okay, maybe pivoting back to the.
Speaker Change: The organic growth guidance, you've given a lot of good.
Speaker Change: Bread.
Speaker Change: Bread crumbs and just our insights on the call so far but if I just look at just curious if I look at the <unk>.
Speaker Change: Guidance range, it's tighter than you've given in previous years, which seems to kind of.
Speaker Change: 0.2.
Speaker Change: I have increased conviction.
Speaker Change: Over.
Speaker Change: Or just more predictability of your growth rate this year versus in previous years anything more you'd want to.
Speaker Change: Add about why you'll have more conviction.
Speaker Change: Other than you know you made a number of comments and you talked about property being a variable to that you're counting on less this year.
Speaker Change: I think the simplest way to think about it Mike is just there's.
Speaker Change: Less variability less material variability within the individual variables. So last year. For example, you had property, which it was hard to tell at the beginning of the year, where it was going to end up how long it was going to last how much rate there was going to be you had various headwinds across our professional.
Jeremiah Bickham: So last year, for example, you had property where it was hard to tell at the beginning of the year where it was going to end up, how long it was going to last, and what the rate was going to be. You had various headwinds across our professional lines and transaction liability. There are still a lot of moving pieces and a lot of things in play, but it's more of an aggregation of a bunch of, call it, normal variables that make us feel comfortable guiding towards a tighter range.
Speaker Change: All lines and transaction liability, there's still a lot of moving pieces and a lot of things in play but there is.
Speaker Change: It's more of a.
Speaker Change: Aggregation of a bunch of call it normal variables that make us feel comfortable guiding towards a tighter range that doesn't mean that that's what will go out with every year, but this year it fell.
Speaker Change: And all of the scenarios that we ran in our bottom up budgeting process, we got comfortable with the 150 basis point range.
Pat Ryan: That doesn't mean that that's what we'll go out with every year, but this year, it felt, in all the scenarios that we ran and our bottom-up budgeting process, we got comfortable with a 150 basis point range. Okay, and just lastly, you know, it sounds like I'm still optimistic about M&A. Could the pace of M&A in 24 be similar to that of the pace in... in 23? Well, as you know, It takes a long time to cultivate a lot of these great companies that we're able to buy. I would comment that, in terms of people that are ready or getting ready to sell, there's been a lot. So it's, you know, it's a matter of determining when they are available, and can we get together on reasonable terms. As we said, we have a very robust pipeline. We had quite a good year of nominees last year. But you can't predict when they will fall.
Speaker Change: Okay, and just lastly, it sounds like.
Speaker Change: I'm still optimistic on M&A, if you could the pace of M&A.
Speaker Change: In 24 be similar to that of the pace.
Speaker Change: In 'twenty three.
Speaker Change: Well as you know it takes a long time to cultivate a lot of these great companies that we were able to buy.
Speaker Change: I would.
Speaker Change: Comment that in.
Speaker Change: In terms of people that are.
Speaker Change: Ready or getting ready to sell.
Speaker Change: There's been an uptick.
Speaker Change: So.
Speaker Change: It's a matter of.
Speaker Change: Determining when they are available.
Speaker Change: Can we get together on reasonable terms.
Speaker Change: As we said we have a very robust pipeline.
Speaker Change: We had quite a good year in M&A last year.
Speaker Change: We cant predict when they fall.
Pat Ryan: It's got so many variables, but just rest assured that there's more opportunity in 24, and there was entering 24 and there was entering 23. Thank you. Thank you. Next question is coming from Myra Shields from KBW. Your line is now live. Great, thanks so much.
Speaker Change: It's got so many variables.
Speaker Change: But just.
Speaker Change: Rest assured that there's more opportunity in 'twenty four.
Speaker Change: And there was entering 'twenty four and there was entering 'twenty three.
Speaker Change: Thank you.
Speaker Change: Thank you next question is coming from Meyer Shields from <unk>. Your line is now live.
Meyer Shields: Great. Thanks, so much.
Myra Shields: I have one question, sort of stemming from the TIFSA LDO, and I don't want to extrapolate too much from it. But should we think of them as being behind the scenes? mounting interest in underwriters divesting MGUs. Just to make sure I heard the question correctly, you said, are there, should we assume that there's a mounting interest in carriers divesting MGUs? Yes, or I don't know whether this is just a one-off deal. It obviously takes time for deals to close.
Meyer Shields: One question sort of stemming from the test cell deal.
Meyer Shields: And I don't want to extrapolate too much from one point, but simply think of there being behind the scenes.
Meyer Shields: Mounting interest and underwriters divesting them to you.
Meyer Shields: Just to make sure I heard the question did you said are there should we assume that there is mounting interest in carriers divesting Mg use.
Meyer Shields: Yes.
Meyer Shields: I don't know whether this is just a one off deal obviously it takes.
Myra Shields: But I don't know if there's a broader theme that we should be thinking about in the context of potential M&A. Well, this is just our opinion, carriers, as well as back, saying that they need tangible net worth in their business, and they've had banks have a strategy to own brokers with lots of intangible value. They have certainly been carriers in that same situation, but I don't know if you can call it a trend.
Meyer Shields: Take time for deals to close but I don't know if there's a broader theme that we should be thinking about in the context of potential M&A.
Speaker Change: Well this is just our opinion.
Meyer Shields: <unk>.
Meyer Shields: Carriers.
Meyer Shields: Well as bags.
Meyer Shields: Seeing that there.
Meyer Shields: They need tangible net worth in their businesses.
Meyer Shields: They've had.
Meyer Shields: So that strategy is owned brokers.
Meyer Shields: Lots of intangible value.
Meyer Shields: Certainly the carriers in that same situation there is.
Meyer Shields: I don't know if you can call it a trend.
Pat Ryan: But let's say that, in fact, more carriers are realizing that getting the tangible book is superior to managing the Delegated Authority opportunity. I don't want to call it a trend, but it certainly is happening now. No, that's very helpful.
Meyer Shields: But let's say that in fact more carriers are realizing that getting the tangible book.
Meyer Shields: Superior too.
Meyer Shields: Managing the.
Meyer Shields: Delegated authority opportunity.
Meyer Shields: I don't want to call it a trend, but it certainly is happening now.
Speaker Change: No thats very helpful.
Myra Shields: Thank you. The second question is, broadly speaking, with regard to recruiting. I was hoping for an update on what we could think of as sort of the war for talent or just the battle for talent, whether pricing for good brokerage talent is intensifying or abating compared to six or 12 months ago. Hi, Meyer.
Meyer Shields: The second question is just broadly speaking with regard to recruiting.
Meyer Shields: I was hoping for an update on what we think of as sort of the <unk>.
Meyer Shields: War for talent are just a battle for talent whether pricing.
Meyer Shields: Sure.
Meyer Shields: Good brokerage talent is intensifying or abating compared to six or 12 months ago.
Meyer Shields: Yes.
Speaker Change: Hi Meyer.
Tim Turner: I would certainly say this: from day one and throughout our history, we've been very, very focused on attracting the highest caliber, decile talent in broking and underwriting, and we've never let up. It's been a big part of our success. There is a limited supply of high-caliber underwriters and brokers. We know who they are, and we've been very successful at bringing them in and attracting them to Ryan Specialty, and will continue to do that. It's been a big part of our success across the country, and the environment for recruiting has never been better. Okay, perfect. And we can throw in one last one.
Meyer Shields: I would certainly say this from day, one and through our history. We've been very very focused on attracting the highest caliber decile talent and broking and underwriting and we've never laid out it's been a big part of our success.
Meyer Shields: It's a limited supply of high caliber underwriters and brokers.
Meyer Shields: We know who they are.
Meyer Shields: And we've been very successful at bringing them in and attracting them to Ryan specialty.
Meyer Shields: We will continue to do that it's been a big part of our success across the country and the environment for recruiting has never been better.
Meyer Shields: Yeah.
Speaker Change: Okay, perfect and if I can throw in one last one I know that public.
Tim Turner: I know that public company DNO remains something of a headwind. Is that changing at all? Are the headwinds fading?
Speaker Change: Public company D&O remains something of a headwind is that changing at all or the Edwin fading.
Meyer Shields: Yes.
Tim Turner: The headwinds continue, but I think we're through the pain phase. The books have rolled over and converted, and we're back to being in a pretty strong position across all pro-exec lines, including DNO and ENO. Public DNO, it remains a challenge.
Meyer Shields: The headwinds.
Meyer Shields: <unk>, but I think we're through the pain phase the books have rolled over and converted.
Meyer Shields: And we're back to being in a pretty strong position across all pro exact lines, including D&O and email.
Meyer Shields: Public DNO it remains a challenge it's a softer part of pro exact today, but I think the actual movement of the business and the transition of that business, we've been through most of it and I expect.
Tim Turner: It's a softer part of pro-exec today, but I think the actual movement of the business and the transition of that business, we've been through most of it. And I expect that line to really stabilize and continue to grow. There are firming niches in pro-exec, like health care, social, and human services. We're getting a real big tailwind in those classes. Okay, excellent. Thank you so much for all the
Meyer Shields: That line to really stabilize and continue to grow there is firming issues and pro exact like health care, social and human services, we're getting up a real big tailwind in those classes.
Speaker Change: Okay, well. Thank you so much for all the answers.
Myra Shields: Thank you. The next question is coming from Rob Cox from Goldman Sachs. Your line is now live.
Meyer Shields: Thank you next question is coming from Rob Cox from Goldman Sachs. Your line is now live.
Rob Cox: Hey, thanks. Hey, one of the areas that's been particularly strong relative to some of the public peers we look at is binding authority. And I know you guys don't exactly give the organic there, and the business mix is a bit different from those peers, but maybe you could elaborate on what's been the driver of what's been exceptional growth there. Sure, Rob. Small commercial, not to be misconstrued as easy, those are tough property and casualty accounts. They're just small.
Rob Cox: Hey, thanks.
Rob Cox: So one of the areas, it's been particularly strong relative to some of the public peers. We look at is binding authority.
Rob Cox: And I know you guys don't exactly give the order.
Rob Cox: They're in the business mix is a bit different from those peers, but maybe you could elaborate on what's been the driver.
Rob Cox: Of what's been exceptional growth there.
Speaker Change: Sure, Rob small commercial not to be misconstrued as.
Rob Cox: Easy those are tough property and casualty accounts are just small.
Tim Turner: We've been keen on building this binding authority up underneath the RT chassis, if you will. So in all the different offices, our hub and spoke approach to the business, the brokerage platforms of RT have these burgeoning binding authority platforms. And they're gaining momentum. The customer base who trusts us with their brokerage property casualty business is moving more binding authority business to us. RFPs for the consolidation of binding authority business continue to be a strong tailwind for us, and our electronic trading platform, our technology approach to the business, is working extremely well, and we're getting a lot more momentum in the speed and the efficiency at which we can grow small commercial. So we're very, very bullish on the long runway ahead for growing our binding authority business. Thanks.
Rob Cox: We've been keen on building this binding authority up underneath the RT chassis. If you will so on all the different offices, our hub and spoke approach to the business. Our brokerage platforms of RT have these burgeoning binding authority platforms and they are gaining momentum the customer base.
Rob Cox: Who trust us with their brokerage property casualty business is moving more binding authority business to us rfps for the consolidation of binding authority business continue to be a strong tailwind for us.
Rob Cox: And our electronic trading platform our technology.
Rob Cox: <unk> to the business is working extremely well and we're getting a lot more momentum and the speed and the efficiency at which we can grow small commercial so we're very very bullish on the long runway I had in growing our binding authority business.
Meyer Shields: Thanks.
Jeremiah Bickham: And as a follow-up on the margin guide, so that the 25 million in 2024 seems like it'll add 100 basis points of the 100 to 150 basis points expansion or so that you guys have identified. Could you help us think about the puts and takes of the margin excluding the restructuring impact? Yes. So Rob, you're absolutely right.
Meyer Shields: As a follow up on the margin guide.
Speaker Change: So the 25 million in 2024, it seems like it all at once.
Speaker Change: <unk> hundred basis points of the 100 to 150 basis points expansion or so.
Speaker Change: You guys have identified could you help us think about the puts and takes of the margin excluding the restructuring impact.
Speaker Change: Yes, so Rob you're absolutely right.
Jeremiah Bickham: The so-called 25 round savings from Accelerate that's flowing through this year do most of the heavy lifting to get us into the beginning of our range, the 31%. But remember that's being paired with a resume, a return to underlying annual scaling, and where we ultimately shake out will depend on how organic growth materializes for the year, what other growth investments arise, and then also what that does. So right now, our plan contemplates overcoming a headwind in fiduciary investment income. But if the Fed cuts deeper and faster, that will obviously have an impact.
Speaker Change: The.
Speaker Change: The call it 25 round savings from accelerate that's flowing through this year does do most of the heavy lifting to get us into the beginning of our range to 31%.
Speaker Change: But remember that's being paired with our resuming our return to underlying annual scaling.
Rob Cox: And where we ultimately shake out will depend on how organic growth materializes for the year, what other growth investments arise and then also that does so right now our plan contemplates overcoming a headwind and fiduciary investment income, but if the fed cuts deeper and faster that will obviously have an impact.
Jeremiah Bickham: And then, alternatively, if rates hold throughout the year, that could be a tailwind for margin. But, big picture, though, I mean, the progress of Accelerate 2025 and the impact that it's having on our margin this year, the impact that it will have on our margin in future years, and the fact that we're resuming annual underlying scaling is incredibly exciting for us. And then pairing that big jump in earnings power with our exceptional top-line growth is even more exciting, and we're far from done on both of those fronts. Thanks, that's very helpful.
Rob Cox: And then alternatively, if rates hold throughout the year that could be a tailwind for margin.
Speaker Change: But big picture, though I mean, the progress of accelerate 2025, and the impact that it's having on our margin. This year the impact that it will have on our margin in future years, and the fact that we're resuming annual underlying scaling is incredibly exciting for us and then pairing that big jump in earnings power with.
Speaker Change: Our exceptional top line growth is even more exciting and we're far from done on both of those fronts.
Bill Karachi: Thank you. The next question is coming from Bill Karachi from Wolf Research. Your line is now live. Thank you. Good afternoon.
Speaker Change: Thanks, that's helpful.
Speaker Change: Thank you. Your next question is coming from Bill Karachi from Wolfe Research. Your line is now live.
Bill Karachi: Thank you good afternoon following up on your delegated underwriting authority comments can you take us inside some of the discussions that youre, having with clients regarding your capabilities.
Bill Karachi: Following up on your delegated underwriting authority comments, can you take us inside some of the discussions that you're having with clients regarding your capabilities in an environment where there's significant performance disparity across MGAs and MGUs? How is your performance track record contributing to these discussions? And you know, maybe what's your success rate in competing for the business with, you know, top to sell talent? Seems like it should be quite strong, but any color around, you know, sort of the discussions would be extremely helpful.
Bill Karachi: Where there are significant performance disparity across I'm, Jason M to use how is your performance track record contributing to the discussions and maybe what's your success rate in competing for the business with top decile tell it seems like it should be quite strong but any color.
Bill Karachi: Round, you know sort of the discussions would be extremely helpful.
Tim Turner: Yeah, look, I appreciate the question. We're definitely proud of our 23 performance and the momentum going into 24. So strong growth, product expansion, and most importantly, as you highlight, another year of increasing profitability for carriers. So, kind of like your industry, our track record in individual product classes is important for attracting new capital. And it's equally important to show that past performance when it comes to launching new products. So we had a lot of success increasing underwriting capital under management last year. Last year, we grew premium in products with the greater majority of our top 25 partners. A strategy that I feel we've led the way on that had success continuing until last year was that we were able to achieve several portfolio-wide arrangements where key capital partners are supporting a broad-based selection of our products. We believe the same is possible as we go into 24. Big, big picture, the penetration of delegated authority is increasing across the marketplace, but it's still early doors, and we remain a relatively small percentage of total premium while a lot of these major global carriers, and we aspire to perpetuate this performance into 24. That's helpful; thank you.
Speaker Change: Yes look I appreciate the question, we're definitely proud of our 23 performance and the momentum going into 'twenty four.
Speaker Change: <unk> strong growth product expansion and most importantly, as you highlighted another year of increasing profitability to carriers.
Speaker Change: Kind of like your industry, our track record and individual product classes as important to attracting new capital and it's equally important in showing.
Speaker Change: Got past performance when it comes to launching new products. So we've had a lot of success.
Speaker Change: Increasing underwriting capital under management last year last year, we grew premium products with the greater majority of our top 25 partners.
Bill Karachi: Our strategy that I feel we've led the way on that had success continuing until last year was.
Bill Karachi: We're able to achieve several portfolio wide arrangements, where key capital partners are supporting a broad based selection of our products.
Bill Karachi: We believe the same is possible as we go into 'twenty four.
Bill Karachi: Big Big picture, we see there.
Bill Karachi: Penetration of delegated authority is increasing across the marketplace, but it's still early doors and we remain a relatively small percentage of total premium all at a lot of these major global carriers.
Bill Karachi: We aspire to perpetuate this performance into 'twenty four.
Speaker Change: That's helpful. Thank you separately the risk of E&S business migrating back to the admitted markets is very much in focus and I. Appreciate your comments in the prepared remarks, but.
Bill Karachi: Separately, the risk of E&S business migrating back to the admitted markets is very much in focus, and I appreciate your comments and the prepared remarks, but are there any tangible examples you could point to or that you would point to as posing outside risk? Well, the migration of business back into the standard market is very, very modest. In most high-hazard classes of business and property casualty, it's double-digit growth. You know, the dumping and the shutting continues, especially in classes of business like transportation and healthcare. Loss leaders in the reinsurance world, you know, that business continues to grow double-digitally in our space. So we don't really see a lot of migration back into the standard market at all that's measurable. A little bit of business kind of heading back into the London market, but hardly measurable. The London market is a little bit more aggressive, but we use that market as well. But again, nothing measurable that we can see.
Speaker Change: Are there any tangible examples you could point to or that you would point to is posing outsize risk.
Bill Karachi: Well the migration of business back into the standard market.
Bill Karachi: <unk> is very very modest.
Bill Karachi: In most high hazard classes of business and property casualty, it's double digit growth.
Bill Karachi: Dumping in the shedding continues especially in classes of business.
Bill Karachi: Transportation and.
Bill Karachi: And health care.
Bill Karachi: Loss leaders in the reinsurance world.
Bill Karachi: That business continues to grow double digit in our space. So we don't really see.
Bill Karachi: A lot of migration back into.
Bill Karachi: The standard market at all Thats measurable little a little bit of business.
Bill Karachi: Heading back into the London market, but hardly measurable the London market is is.
Bill Karachi: Is that a little bit more aggressive.
Bill Karachi: But we use that market as well.
Bill Karachi: But again nothing nothing measurable that we can see.
Tim Turner: And if I may squeeze in one last one, how are expectations of Fed rate cuts affecting your discussions with potential targets? Do you sense a greater inclination to wait in anticipation of selling into a more attractive environment? I'm just curious whether the discussions are sort of being influenced by the current rate environment. Well, I think it's...
Bill Karachi: Okay.
Speaker Change: Thank you and if I may squeeze in one last one how are expectations of fed rate cuts influencing your discussions with potential targets do you sense, a greater inclination to wait in anticipation of selling into a more attractive environment.
Bill Karachi: Just curious whether the discussions are sort of being influenced by the how they are being influenced by the current rate environment.
Bill Karachi: Well I think it's it depends on the quality of the business that you're targeting we target very high quality businesses.
Pat Ryan: It depends on the quality of the business and targeting. We target very high quality businesses, people, know that they're high quality, and they're not anxious to take a haircut on that because of the market conditions. You saw just recently the announcement on..., on Truist Insurance Holdings. That's been announced at a pretty high price per share because it's a high quality business, and our business is that, deservedly, have earned a lower multiple, and not necessarily because they're bad businesses at all, but there could be some disruptions that temporarily lowered their..., our performance. And so there are good companies out there that we could, we believe, bring in at lower multiples than the past, but then need a little bit of productivity improvement, we call it, but we're quite good at that. So as we look at the opportunities out there, likely, there are some quite good companies that need a little, let's say, a new home and some productivity help and some distribution help. And we think we can get some quite good ones. That's very helpful, Pat.
Bill Karachi: People.
Bill Karachi: No that they're high quality.
Bill Karachi: They're not.
Bill Karachi: Access to take.
Bill Karachi: A haircut on that because of the market conditions.
Bill Karachi: You saw it just recently announced.
Bill Karachi: Tourist insurance holdings.
Bill Karachi: That's been announced.
Bill Karachi: Pretty high multiples, because it's a high quality business.
Bill Karachi: Our businesses.
Bill Karachi: Deservedly.
Bill Karachi:
Bill Karachi: Of earned a lower multiple.
Bill Karachi: Not necessarily because they are bad businesses at all but there could be some disruptions.
Bill Karachi: Temporarily lowered our.
Bill Karachi: Performance.
Bill Karachi: And so there are good companies out there but.
Bill Karachi: We could.
Bill Karachi: We believe.
Bill Karachi: Yeah.
Bill Karachi: At lower multiples than the past.
Bill Karachi: But then there's a little bit of <unk>.
Bill Karachi: Productivity improvement we call it but we're quite good at that.
Bill Karachi: As we look at the opportunities out there.
Bill Karachi: Likely there are some quite good companies that did a little less.
Bill Karachi: I'll say a new home.
Bill Karachi: Productivity, helping some distribution help.
Bill Karachi: We think we can get some quite good attractive companies at reasonable multiples.
Bill Karachi: Thanks, everyone, for taking my questions. Thank you. As a reminder, that's star number one to be placed in the question queue. Our next question is coming from Mike Ward from Citi; your line is now live. Thanks, guys.
Speaker Change: That's very helpful. Pat Thanks, everyone for taking my questions.
Speaker Change: Thank you as a reminder, that star one to be placed in the question queue. Our next question is coming from Mike Ward from Citi. Your line is now live.
Mike Ward: Um, maybe just, um, just following up on Rob's question and, and I, um, how much of a headwind are you embedding? Are you assuming a rate cut? We are.
Mike Ward: Thanks, guys.
Mike Ward: Maybe just.
Mike Ward: Just following up on robs question NII.
Mike Ward: How much of a headwind are you embedding.
Mike Ward: Are you assuming rate cuts.
Jeremiah Bickham: We look at the forward curve to set our budgets, and it's changed, you know, the assumption of... I think it was five cuts a month ago; it's three cuts that are embedded in the forward curve now, so we're taking into account a range of outcomes. And all of the scenarios in our models are a headwind, and like I said, we're very happy that our plan has us overcoming them. Okay, thanks. Um, and then just kind of curious what you're expecting in terms of property rate increases with respect to organic growth guidance, and I guess a similar question for casualty. Well, we'll start with property.
Mike Ward: We are we look at the forward curve to set our budgets and it's changed the assumption of.
Mike Ward: I think it was five cut some months ago. It's three cuts that are embedded in the forward curve now so we're taking into account.
Mike Ward: Range of outcomes and all of the.
Mike Ward: Scenarios in our models are a headwind and like I said, we're very happy that our plan has us overcoming them.
Speaker Change: Okay. Thanks.
Speaker Change: And then just kind of curious what youre expecting in terms of property rate increases.
Speaker Change: With respect to organic growth guidance and I guess similar question for casualty.
Speaker Change: Well, we'll start with property first of all the flow into the channel continues to be double digit. So we continue to see a lot of business being moved into the non admitted market and we're seeing double digit rate increases on cat property.
Tim Turner: First of all, the flow into the channel continues to be double digits. So we continue to see a lot of business being moved into the non-admitted market, and we're seeing double-digit rate increases on cat property. So whether it's coastal wind, wildfire, flood, convective storm business, predominantly what we see, there's double-digit rate increases continuing. Very little rate deceleration, very modest.
Speaker Change: So whether its coastal wind wildfire flood convective storm business predominantly.
Speaker Change: Predominantly what we see there is double digit rate increase continuing.
Speaker Change: Very little.
Speaker Change: Right deceleration.
Speaker Change: Very modest and.
Tim Turner: And casualty, again, double-digit growth. Flow into the channel, the stamping offices, the larger states have validated that once again. That ebbs and flows depending on the narrow niches of high-hazard business that we play in, but your usual strong classes of business, like transportation, habitational, and large venue risk. Higher education, sports and entertainment, health care, social, and human service business continues to flow into our channel. So we're very well set up, as you know, with heavy brokerage, talent, a deep bench, and our underwriting platforms that are woven into these practice group verticals. We expect 24 to be very strong.
Speaker Change: In casualty again double digit growth flow into the channel stamping offices, the larger states have validated that once again.
Speaker Change: That kind of ebbs and flows depending on the.
Speaker Change: Narrow niches of high hazard business that we play in but your usual.
Speaker Change: Strong classes of business like transportation habitation will.
Speaker Change: Large venue risks higher education.
Speaker Change: <unk> and entertainment.
Speaker Change: Health care, social and human service business continues to flow into our channel. So we're very well set up as you know.
Speaker Change: With heavy brokerage talent deep bench and our underwriting platforms that are woven into these practice group verticals, we expect 2004 to be very strong.
Mike Ward: Awesome. Thank you. The next question is coming from Ryan Tunis from Autonomous Research on behalf of Lionel Gallant.
Speaker Change: Awesome. Thank you.
Speaker Change: Thank you next question is coming from Ryan Tunis from Autonomous Research. Your line is now live.
Ryan Tunis: Hey, thanks. I guess I'm just following up on that. And that last question, you said that you are seeing solid rates and property, not much deceleration, but um, I recall all those cat-exposed property lines renew mid year. So how much do you guys really have that much visibility on what's going to happen from a pricing standpoint and property in the 2024 disjuncture? We don't, but what we can see so far is that the rates continue to increase.
Ryan Tunis: Hey, Thanks, I guess just following up on that.
Ryan Tunis: On that last question you said that you are seeing.
Ryan Tunis: Solid rate and property not much deceleration, but.
Ryan Tunis:
Ryan Tunis: If I recall all of those cat exposed property lines for new mid year. So how much you guys really have that much visibility.
Ryan Tunis: On what's going to happen from a pricing standpoint in the property in 2024 at this juncture.
Speaker Change: We don't.
Ryan Tunis: But what we can see so far is that the rates.
Ryan Tunis: Could continue to increase their spend again.
Tim Turner: There's been, again, a very slight, hardly even measurable deceleration in certain classes of business. But again, we're talking specifically about ENS, you know, high-hazard cat property, and not, you know, middle, certainly not middle market or mainstream property business that does, in fact, have rate deceleration. So again, the overall high-hazard part of our property continues to be very, very strong.
Ryan Tunis: <unk> slight hardly even measurable deceleration on certain classes of business.
Ryan Tunis: But again, we're talking specifically about E&S high hazard cat property and not certainly not middle market, our mainstream property business.
Ryan Tunis: It does in fact have rate deceleration. So again, the overall high hazard part of our profit.
Ryan Tunis: <unk> continues to be very very strong.
Ryan Tunis: I mean, you're still bullish, I guess, on property submissions. Can you just help me understand where incremental submissions come from? So 2022 happened, we had a huge hurricane, and it seems like just about everything coastal went into the non-emitted market.
Ryan Tunis: And then.
Ryan Tunis: I mean, you're still bullish I guess on property submission can you just help me understand where incrementals submissions come from <unk> to 2022 happened we had a huge hurricane.
Ryan Tunis: Just about everything coastal wind and non admitted market I'm not disagreeing that it is going to stay there.
Tim Turner: I'm not disagreeing that it's going to stay there, but where does the incremental submission flow come from? Well, first of all, treaty reinsurance plays a big role here, and limited capacity being produced by large risk-bearing companies, whether it's here or Europe or Lloyds, London, shrinking lines, much smaller net line capacity available for the CAT business. So it requires a higher number of participants to deliver on the limits that are required. So our non-admitted capacity, even in smaller tranches, is needed. There's a much higher demand for it in accomplishing these limits that are needed. We don't see a let-up in that. There's no one putting up big lines in cat property. It's much, much more the other way around.
Ryan Tunis: But where is the information the incrementals submission flow come from.
Speaker Change: Well first of all Treaty reinsurance plays a big role here and there.
Speaker Change: Limited capacity being produced by large risk bearing companies, whether it's here or Europe, or where Lloyd's London.
Speaker Change: Shrinking lines.
Speaker Change: Much much smaller net line capacity available for the cat business. So it requires.
Speaker Change: A higher number of participants to deliver on the limits that are required so are not admitted capacity and even in smaller tranches.
Ryan Tunis: Needed in a much much higher demand for that and accomplishing these limits that are needed.
Ryan Tunis: Don't see a letup in that there's no one putting up big lines in cat property, it's much much more the other way so the new opportunities are really restructuring these towers and requiring again that expertise.
Tim Turner: So the new opportunities are really restructuring these towers and requiring, again, that expertise and more carriers to participate to accomplish the goals. And I guess just one last one, with the contingency of the profit commission. I'm not sure how that's accounted for, but is there a noise that you see there from, I don't know, maybe you got paid for something in casualty, 15 to 19, and now it's developing more adversely
Ryan Tunis: And more carriers to participate to accomplish the goals.
Speaker Change: I guess, just one last one would.
Speaker Change: Would be contingent to the profit commissions.
Speaker Change: I'm not sure how that's accounted for but is there.
Speaker Change: Is there noise that you see there from I don't know maybe you got paid for something in casualty 15 to 19 and knowledge developing more adversely than it does that is there a claw back mechanism for that or.
Ryan Tunis: Like, is there a clawback mechanism for that? Or is that not really done? So Ryan, on this technical accounting side, there is no clawback on anything we book. We only book it when it's fully earned and collected. We don't want any downside to what you're seeing. I think broadly speaking, on average, it takes three or four years on average for a profit commission to be earned, recognized, measured, and paid.
Speaker Change: Is that not really dynamic.
Speaker Change: So Ryan.
Speaker Change: This technical accounting side, there is no claw back on anything we book, we only book it when it's fully earned and collected we want we don't want any downside to what youre seeing.
Speaker Change: I think broadly speaking there on average it takes.
Speaker Change: Three or four years on average for a profit commission to be.
Speaker Change: Earn recognized measured in paid so.
Jeremiah Bickham: So, as I think I said in the opening, we're pleased to see PCs materialize from some of the soft market years of four or five years ago. And we're optimistic about underwriting performance that will materialize in PCs in the coming several years. But again, at the heart of your question, there are no clawbacks in what you're seeing on our book. Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to management for any further closing comments. Okay, well, thank you. We appreciate you taking the time to join us today and, certainly, for your continued support of our firm, and we look forward to updating you on our progress next quarter, and probably we'll be talking to several of you between now and then. Thanks for your interest and support. Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation.
Speaker Change: I think I said in the opening.
Speaker Change: Pleased to see Pcs materialize from some of the.
Speaker Change: The soft market years of four or five years ago and we're optimistic.
Speaker Change: Our underwriting performance.
Speaker Change: Materialize in Pcs in the coming several years, but again at the heart of your question. There are no clawbacks and what Youre seeing on our books.
Speaker Change: Thanks.
Speaker Change: Yes.
Speaker Change: Thank you we've reached end of our question and answer session I would like to turn the floor back over to management for any further or closing comments.
Speaker Change: Okay well. Thank you. We appreciate you taking the time to join us today.
Speaker Change: And certainly for your continued support of our firm.
Speaker Change: And we look forward to updating you on our progress next quarter.
Speaker Change: We will be talking to several of you between them.
Speaker Change: Thanks for your interest and support.
Speaker Change: Thank you that does conclude today's teleconference and webcast you may disconnect. Your line at this time and have a wonderful day, we thank you for your participation today.