Q2 2025 Ryan Specialty Holdings Inc Earnings Call
Pat Ryan: Good afternoon, and thank you for joining us today for RYAN SPECIALTY HOLDINGS' second quarter 2025 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 to 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 statements. 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.
Good afternoon and thank you for joining us today. For Ryan's specialty holding second quarter 2025 earnings conference call.
In addition to this call the company filed, a press release for the SEC earlier this afternoon.
Which has also been posted to 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 statements. These statements are based on Management's, current expectations, and beliefs, and a 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.
Pat Ryan: 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. 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 available on the company's website. With that, I'd now like to turn the call over to the founder and executive chairman of RYAN SPECIALTY, Pat Ryan.
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. 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 available on the company's website.
With that. I'd now like to turn the call over to the founder and executive chairman of Ryan's specialty Pat Ryan.
Miles Wuller: Good afternoon, and thank you for joining us to discuss second quarter results. With me on today's call is our CEO, Tim Turner, our President, Jeremiah Bickham, our CFO, Janice Hamilton, our CEO of Underwriting Managers, Miles Wuller, and our Head of Investor Relations, Nick Muszek. Our second quarter was solid and demonstrates the resiliency of our platform, particularly when we're considering the property headwind. For the quarter, we grew total revenue 23%, driven by organic revenue growth of 7.1%, and M&A, which added 13 percentage points to the top line. Adjusted EBITDA grew 24.5% to 308 million. Adjusted EBITDA margin expanded 50 basis points to 36.1%, and adjusted earnings per share grew 13.8% to 66 cents. Although organic revenue growth fell short of our expectations, I'm pleased with our results, which reflect our continued ability to navigate through this rapidly evolving insurance market and complex macro environment.
Good afternoon, thank you for joining us to discuss our second quarter results.
With me on today's call is our CEO, Tim Turner.
Our president Jeremiah picom. Our CFO Jens Hamilton.
Our CEO of Underwriting Managers, Miles Wuller, was...
and our head of investor relations, Nick Musk.
Our second quarter was solid.
And it demonstrates the resiliency of our platform, particularly when we consider the property headwind.
Or the quarter, we grew total revenue. 23%
Driven by organic Revenue growth of 7.1%.
And M&A, which added 13% of points to the top line.
Just a deep decline of 24.5% to $308 million.
Just margin expanded 50 basis points to 36.1%.
And adjusted earnings per share grew 13.8%.
66 cents.
Although organic Revenue growth fell short of our expectations.
I'm pleased with our results.
It's reflect our continued ability to navigate.
Miles Wuller: This is a testament to the depth and breadth of our team and the diversity of our products and lines of business. Across the firm, we generated solid new business and high renewal retention. We continue to deliver for our clients in a very firm casualty market and had strong casualty growth across all three of our specialties. We have long said that we capture broad tailwinds, especially in the E&S market, while also capitalizing on specific areas of accelerated growth as they arise. This is evident across many products and lines of business, notably high-hazard casualty as well as transportation. We experienced headwinds with a significant decline in property pricing and the bleed-in of uncertainty from the trade war and other macro factors impacting construction.
This is a testament to the depth and breadth of our team and the diversity of our products and lines of business.
Across the firm, we generated, solid new business and high renewal retention.
We continue to deliver for our clients in the very firm casually Market.
And that strong casual growth across all three of our specialties.
We have long said that we capture broad tailwinds in the specialty and excess market, while also capitalizing on specific areas of accelerated growth as they arise.
This is evident across many products and lines of business.
Notably High Hazard. Casually
As well as transportation.
To experience headwinds from a significant decline in property pricing and the bleed end of uncertainty from the trade war.
And other macro factors impacting construction.
Miles Wuller: As discussed last quarter, the second quarter is our largest property quarter, and the second quarter of 2024 was the last very strong quarter for property before rates began to decline, which set us up for our most challenging year-over-year comparison. We had excellent contributions to our top line and recent acquisitions. In the quarter, we closed on both US Q risk and 360-degree underwriting. Earlier this month, we closed on JM Wilson, a binding authority firm noted for its expertise in transportation. We are very excited to welcome these new teammates into the RYAN SPECIALTY family. Our robust M&A activity over the past two years and since our founding continues to advance our long-term strategy through significantly expanding our total addressable market, adding expertise, augmenting our capabilities to serve our clients across market segments, and broadening our international footprint.
As discussed last quarter.
The second quarter is our largest property quarter, and the second quarter of 2024 was the last very strong quarter for property before rates began to decline.
But set us up for our most challenging year-over-year comparison.
We had excellent contributions to our top line from recent acquisitions.
In the quarter, we closed on both USQ risk.
And 360 degree underwriting.
And earlier this month clothes on JM Wilson.
A binding authority firm noted for its expertise in transportation.
We are very excited to welcome these new teammates into the Ryan, specialy family.
A robust m&a activity over the past 2 years. And since our founding continues to advance our long-term strategy through a significantly expanding our total addressable Market.
Adding expertise augmenting, our capabilities.
To serve our clients across market segments and broaden our international footprint.
Miles Wuller: And by adding many new programs and unique MGUs, providing us with greater advantages to extend our lead and delegated underwriting authority now and over the long term. We continue to make investments in key talent and new initiatives that will drive strong growth in the near, medium, and long term. These investments will significantly boost our unmatched capabilities to generate new business, organic growth, and margin benefits for RYAN SPECIALTY in 2026 and beyond. We've also further expanded our strategic alliance with Nationwide Mutual, and I'm very excited about two specific areas. Yesterday, Nationwide announced a deal to acquire the reinsurance renewal rights from Markell. Ryan Rhee, our reinsurance underwriting MGU and Nationwide's exclusive reinsurance underwriter, will have delegated authority to underwrite this book of business. Ryan Rhee will be getting a diversified portfolio with complementary lines and new relationships.
And by adding many new programs and unique MGUs, we are providing ourselves with greater advantages to extend our lead and delegated underwriting authority now and over the long term.
We continue to make investments in the key talent and new initiatives that will drive strong growth in the near, medium, and long term.
These investments will significantly boost our unmatched capabilities to generate new business.
Organic growth.
And margin benefits for Ryan, especially in 2026 and beyond.
We've also further expanded our strategic alliance with Nationwide Mutual and are very excited about two specific areas.
Yesterday, Nationwide announced the deal to acquire the reinsurance renewal rights from Marcel.
Right. Re are reinsurance underwriting, mgu.
And Nationwide exclusive, reinsurance underwriter will have delegated authority to underwrite this book of business.
Ryan ree, will be beginning. A diversified portfolio with complimentary lines and new relationships.
Miles Wuller: Second, through Ryan Alternative Risk, we are creating innovative solutions to help solve complex risks for our clients. These initiatives are a testament to our ability to cultivate deep strategic relationships with leading insurance institutions, which Jeremiah will speak to shortly. As we look forward, we are confident in our ability to innovate, invest, and continue to strengthen and diversify our offerings within the specialty insurance market. Our relentless efforts to navigate both near-term challenges and a very firm casualty market, all while investing in areas of accelerating growth and making thoughtful acquisitions, give a strong conviction that we will continue delivering annual double-digit organic growth and leading in the specialty lines insurance sector. As the coach of this terrific team, I'm incredibly proud of our ability to mitigate the impact of the dramatic swing in property pricing in Q2 with significant new business production.
Second through a rhino alternative risk. We are creating innovative solutions to help solve complex risks for our clients.
These initiatives are a testament to our ability to cultivate deep strategic relationships with leading insurance institutions, but Jeremiah will speak to shortly.
As we look forward.
We are confident in our ability to innovate and thus continue to strengthen and diversify our offerings within the specialty insurance market.
Our Relentless efforts to navigate both near-term challenges and a very firm casually Market. All while investing in areas of accelerating growth and making thoughtful Acquisitions. If a strong conviction that we will continue delivering annual double-digit organic growth and leading in the specially lines Insurance sector.
As the coats of this terrific team.
I'm incredibly proud of our ability to mitigate the impact of the dramatic. Swing in property, pricing in Q2.
Miles Wuller: We continue to be unwavering in our dedication to clients and trading partners. I'm pleased to turn the call over to our Chief Executive Officer, Tim Turner. Tim.
With significant new business production.
We continue to be unwavering in our dedication to clients and trading partners.
I'm pleased to turn the call over to our Chief Executive Officer, Tim Turner. Tim.
Tim Turner: Thank you very much, Pat. Ryan Specialty had a solid second quarter. I was pleased with how our team executed, especially considering some headwinds. Despite these pressures, we remain hyper-focused on successfully executing what we can control. The combination of strong secular growth trends and Ryan Specialty's specific growth drivers will propel us forward. These include our specialized intellectual capital, unique trading relationships at scale, and an ability to innovate, evolve, and stay ahead of the market, including the two significant new business opportunities that Pat mentioned. This all drives our strong conviction that we have a tremendous runway for continued growth for years to come. We remain relentless in our goal to yet again deliver double-digit organic growth for the full year and are well-positioned for the long term. Now, diving into our specialties, our wholesale brokerage specialty had a solid quarter.
Thank you very much. Pat, Ryan's specialty at a solid second quarter. I was pleased with how our team executed, especially considering some headwinds.
Despite these pressures we remain hyper focused on successfully executing what we can control.
The combination of strong secular growth trends and Ryan Specialty's specific growth drivers will propel us forward.
Unique trading relationships at scale.
And an ability to innovate, evolve, and stay ahead of the market, including the two significant new business opportunities that Pat mentioned.
This all drives our strong conviction, that we have a tremendous runway for continued growth for years to come.
We remain relentless in our goal to yet again deliver double-digit organic growth for the full year.
And we're well positioned for the long term.
Now, diving into our specialties.
Tim Turner: In property, we executed well in a very challenging environment, and I am proud of our results. We saw a rapid decline in property pricing as the quarter progressed, especially in the month of June. We expect this significantly soft pricing environment to continue at least in the near term, which drives our expectation for property to decline modestly for the full year. Despite this rapid decline in property insurance pricing, flow into the channel remains strong, and we took share one head-to-head against our competitors and had another quarter of high renewal retention. This is a testament to our tenacious and ultra-competitive RT brokerage team. We know how to navigate adversity in the marketplace, find new opportunities to grow and expand our market share, and importantly, find ways to win. It's in our DNA. Long term, our outlook is more optimistic.
Our wholesale brokerage specialty had a solid quarter.
In property, we executed well in a very challenging environment and I am proud of our results.
We saw a rapid decline in property pricing as the quarter progressed, especially in the month of June.
We expect this significantly soft pricing environment to continue at least in the near term.
Which drives our expectation for property to decline modestly for the full year.
Despite this rapid decline in property, insurance pricing.
Flow into the channel remains strong. We took share head-to-head against our competitors and had another quarter of high renewal retention.
This is a testament to our tenacity and ultra-competitiveness. RT, brokerage team.
We know how to navigate adversity in the marketplace, find new opportunities to grow and expand our market share, and, importantly, find ways to win.
It's in our DNA.
Tim Turner: This year marks the sixth consecutive year with over 100 billion in insured losses from catastrophes, specifically from severe convective storms, floods, and wildfires, and there are still five months remaining. Assuming an average wind season, 2025 will end up being a significant loss year and has the potential to make the current property pricing declines short-term in nature, which demonstrates just how sensitive the property market is to large loss events. We believe that elevated and higher frequency catastrophe losses, a rise in secondary perils, and increased populations in CAT-affected areas support the long-term durability of and the need for E&S property solutions. With our deep capabilities, we will continue to deliver value for our trading partners and offer solutions to the most complex issues our clients face, irrespective of the market cycle.
Long-term our Outlook is more optimistic.
This year marks the sixth consecutive year with over $100 billion in insured losses from catastrophes, specifically from severe convective storms, floods, and wildfires.
And there are still 5 months remaining.
Assuming an average wind season, 2025 will end up being a significant loss year and has the potential to make the current property pricing declines short-term in nature.
Which demonstrates just how sensitive the property Market is to large loss events.
We believe that elevated and higher frequency catastrophe losses arise in secondary perils.
And increased populations and Cat affected areas, supports the long-term durability of and the need for ens Property Solutions.
With our deep capabilities, we will continue to deliver value for our trading partners and offer solutions to the most complex issues our clients face, irrespective of the market cycle.
Tim Turner: We continue to expect property to be an important contributor to our growth over the long term. Our casualty practice had another great quarter with excellent new business and high renewal retention. We saw strength in a number of areas, most notably transportation, habitational risks, public entities, sports and entertainment, healthcare, social and human services, and consumer product liability. Our professional lines brokers have been resilient and resourceful in identifying new opportunities, and we're a contributor to growth this quarter despite continued pricing pressure in many lines. More broadly in casualty, loss trends driven by both economic and severe social inflation are causing carriers to increase rates, pull back appetite, and in some cases, exit markets completely. Risks in each of these classes and many others are continuing to move into the specialty and E&S markets.
We continue to expect property to be an important contributor to our growth over the long term.
Our casualty practice had another great quarter with excellent new business and high renewal retention.
We saw strength in a number of areas, most notably Transportation habitational risks.
Public entities.
Sports and entertainment.
Healthcare.
Social and Human Services and consumer product liability.
Our professional lines brokers.
Have been resilient and resourceful and identifying new opportunities.
And we're a contributor to growth this quarter despite continued pricing pressure in many lines.
More broadly in casualty loss, trends driven by both economic and severe social inflation are causing carriers to increase rates.
Pull back appetite and in some cases exit markets, completely.
Tim Turner: We see the E&S market responding in a disciplined manner with carriers tightening distribution lines, re-underwriting, changing appetite, raising prices, and focusing on limit management. We believe the need for the specialized industry and product-level expertise that Ryan Specialty offers has never been greater, and our value proposition has never been stronger. With difficult loss trends likely to continue, we see a long runway for sustained casualty pricing. We remain confident that casualty will be a strong driver of our growth moving forward and believe we will remain a leader in casualty solutions for years to come. Now, turning to our delegated authority specialties, which include both binding and underwriting management, our binding authority specialty continues to perform very well, driven by our top-tier talent and expanding product set for small, tough-to-place commercial P&C risks.
Risks in each of these classes and many others are continuing to move into the specialty and ens markets.
We see the ens Market responding in a disciplined manner, with carriers. Tightening distribution lines. Re-underwriting changing appetite raising prices and focusing on limit management.
We believe the need for the specialized industry and product level. Expertise that Ryan specialty offers has never been greater
And our value proposition has never been stronger.
With difficult loss trends likely to continue, we see a long runway for sustained casualty pricing.
We remain confident that casualty will be a strong driver of our growth moving forward. And believe, we will remain a leader and casually solutions for years to come.
now, turning to our delegated authority Specialties which include both binding and underwriting management,
Very well.
Driven by our top tier Talent.
Tim Turner: We continue to believe panel consolidation and binding authority remains a long-term growth opportunity, and we are well-positioned to serve our clients as this trend persists. Our underwriting management specialty had a solid quarter with excellent results in casualty, which helped mitigate pressure across the property and construction segment. We also had meaningful contributions from recent acquisitions, which added over 55 percentage points of growth to the top line of this specialty. Over the last few years, we've added multiple specialty MGUs and programs that we feel privileged to have added to the Ryan Specialty family. They have brought to us unique product sets, technology advantages like efficient online distribution, and expanded our geographic presence. These firms have also added critical capabilities, meaningfully increased our footprint across all market segments, and bolstered the number of products we're able to distribute through our wholesale broker, RT Specialty.
And expanding our product set for small, tough-to-place commercial PNC risks.
We continue to believe that panel consolidation and binding authority remain long-term growth opportunities, and we are well positioned to serve our clients as this trend persists.
Our underwriting management specialty had a solid quarter with excellent results in casualty.
Which helped mitigate pressure across the property and construction segment.
We also had meaningful contributions from recent acquisitions.
Which added over 55% percentage points of growth to the Top Line of the specialty.
Over the last few years, we've added multiple specialty mgus and programs that we feel privileged to have added to the Ryan specialty family.
They have brought to us a unique product sets technology advantages like efficient online distribution.
And expanded our Geographic presence.
Tim Turner: Our recent cohort of acquisitions continues to perform well, adding value to our efforts and materially contributing toward our long-term delegated authority strategy. Stepping back, our skill and discipline to manage these businesses through the insurance cycle bolsters our ability to deliver consistently profitable underwriting results, growth, and scale over the long term. We remain well-positioned to capitalize on both organic and inorganic delegated authority growth opportunities. Turning to price and flow, we have repeatedly noted that in any cycle, as certain lines are perceived to reach pricing adequacy, admitted markets tend to step back in on certain placements. However, this is still not playing out in any meaningful way, and the standard market has not meaningfully impacted rate or flow in the aggregate.
These firms have also added critical capabilities, meaningfully increased, our footprint, across all market segments and bolstered the number of products, we're able to distribute through our wholesale. Broker RT specialty.
Our recent cohort of acquisitions continues to perform well, adding value to our efforts and materially contributing toward our long-term delegated authority strategy.
Stepping back our skill and discipline to manage these businesses through the insurance cycle bolsters, our ability to deliver consistently profitable underwriting, results, growth and scale over the long term.
We remain well, positioned to capitalize on both organic and inorganic delegated authority growth opportunities.
Turning to price and Flow.
We have repeatedly noted that in any cycle, as certain lines are perceived to reach pricing adequacy, admitted markets, tend to step back in on certain placements.
However this is still not playing out in any meaningful way and the Standard Market has not meaningfully impacted rate or flow in the aggregate.
Tim Turner: As we've said since our IPO, we continue to expect the flow of business into the specialty and E&S market to be a significant driver of Ryan Specialty's growth over the long term, more so than rate. This was demonstrated in Q2 as the flow of business into the E&S channel remained strong across all lines, and we benefited from that flow and posted meaningful growth despite significant property pricing declines. Turning to M&A, we are pleased to close three acquisitions over the past few months. We expect US Q risk to be a significant contributor to our alternative risk offerings for property, casualty, and transportation. 360-degree underwriting and Irish MGU specializing in commercial construction further expands our international footprint. And on July 1st, we completed the acquisition of JM Wilson, which is an excellent addition to our binding authority and transportation offering.
As we've said, since our IPO, we continue to expect the flow of business into the specialty and ens Market, to be a significant driver of Ryan's Specialties growth over the long term, more so than rate.
This was demonstrated in Q2 as the flow of business, into the ens Channel, remains strong across all lines and we benefited from that flow and posted meaningful growth. Despite significant property pricing declines.
Turning to m&a.
We are pleased to close 3 acres.
We expect usq risk to be a significant contributor to our alternative risk offerings for property casualty and transportation.
360-degree underwriting and Irish MGU specializing in commercial construction further expands our international footprint.
And on July 1st, we completed the acquisition of JM Wilson.
Tim Turner: With 19 million of annual revenue, JM Wilson adds high-quality talent in the Midwest with expertise across transportation and adds to our long-term goal to become the national leader in binding authority. Further on the M&A front, our pipeline continues to be robust, including both tuck-ins and large deals. That said, we will only move forward when all of our criteria for M&A are met: a strong cultural fit, strategic, and accretive. To sum up, it was a solid quarter for Ryan Specialty, and I am proud of how our team executed and the results we delivered. I am confident we will navigate these headwinds. The team remains resolute in our long-term outlook and our overall value proposition. We are deepening and earning the trust and respect of our clients every day, making us a highly valued trading partner for their specialty insurance needs.
Which is an excellent addition to our binding Authority and transportation offering.
With 19 million of annual revenue.
JM Wilson adds high-quality talent in the midwest with expertise across transportation
And adds to our long-term goal, to become the national leader in binding Authority.
Further on the m&a, front.
Our pipeline continues to be robust, including both tuck-ins and large deals.
That said we will only move forward when all of our criteria for m&a are met.
A strong cultural fit.
Strategic and a creative.
To sum up, it was a solid quarter for Ryan's specialty and I am proud of how our team executed and the results we delivered.
I am confident. We will navigate these headwinds.
The team remains resolute.
In our long-term outlook and our overall value proposition.
We are deepening and earning the trust and respect of our clients every day.
Tim Turner: Quite simply, our scale, scope, and intellectual capital has been thoughtfully crafted over 15 years and is the foundation of our ability to continue winning and expanding our market share over time. We also will continue to be a destination of choice for the best talent in the industry, driven by our winning and empowering culture and nonstop focus on innovation. All of this makes our platform exceedingly difficult to replicate. And as we head into the latter half of 2025, you should expect us to further invest in our platform to widen our long-term competitive advantages that continue to clearly set us apart from the specialty industry. With that, I will now turn the call over to Jeremiah. Thank you.
Making us a highly valued trading partner for their specialty insurance needs.
Quite simply our scale scope and intellectual Capital has been, thoughtfully crafted over 15 years, and is the foundation of our ability to continue winning and expanding our market share over time.
And empowering culture and non-stop focus on innovation.
All of this makes our platform exceedingly difficult to replicate, and as we head into the latter half of 2025,
You should expect us to further, invest in our platform to widen our long-term competitive advantages that continue to clearly set us apart from the specialty industry.
with that, I will now turn the call over to Jeremiah
Thank you.
Jeremiah Bickham: Thank you, Tim. We remain on our front foot in terms of being a growth-minded business, thoughtfully balancing investments for growth and margin expansion. As a demonstration of our ability to be a new business machine, I'm excited to discuss two new initiatives that will help us sustain exceptional organic growth and will be margin accretive starting in 2026. First, we are in the process of renewing our strategic alliance with Nationwide for a fresh 10-year commitment and a significant expansion of our already robust relationship. As Pat mentioned, Ryan Rhee will be Nationwide's exclusive reinsurance MGU in their reinsurance renewal rights deal with Markell. We are significantly ramping up talent investments to take advantage of this unique opportunity.
Thank you, Tim.
We remain on our front foot in terms of being a growth-minded business thoughtfully, balancing Investments for growth and margin expansion.
As a demonstration of our ability to be a new business machine. I'm excited to discuss 2 new initiatives, that will help us sustain exceptional organic growth and will be margin, accretive starting in 2026.
First, we are in the process of renewing our strategic alliance with Nationwide for a fresh 10-year commitment and a significant expansion of our already robust relationship.
As Pat mentioned Ryan Reed will be nationwide's exclusive reinsurance mgu in their reinsurance renewal rights deal with Markle.
We are significantly ramping up Talent Investments to take advantage of this unique opportunity.
Jeremiah Bickham: While this investment in talent will temporarily impact margins in the second half of 2025, we expect a benefit to margins during Q1 and Q2 of 2026, aligned with the revenue seasonality of this business. It is also worth noting that our deep relationships with Nationwide and Markell were instrumental in facilitating this unique transaction. And as a result, we are expanding our highly strategic trading relationship with Markell as well. Second, we are making significant progress in our Ryan Alternative Risk business, building on our prior acquisition of Keystone and the recent acquisition of US Q Risk. We have been making a major investment in top-tier talent and intellectual capital across different verticals to help develop and distribute these innovative products. Based on our strategic alliance with Nationwide, we expect to create a suite of innovative solutions and generate considerable new business over the medium term.
while this investment in Talent, will temporarily impact margins in the second half of 2025, we expect a benefit to margins during q1 and Q2 of 2026
aligned with the revenue seasonality of this business.
Is also worth noting that our deep relationships with Nationwide and Markle were instrumental in facilitating this unique transaction.
And as a result, we are expanding our highly strategic trading relationship with Markle as well.
Second, we are making significant progress in our Ryan, alternative risk business building on our prior acquisition of Keystone and the recent acquisition of usq risk.
We have been making a major investment in top tier talent and intellectual Capital across different verticals to help, develop and distribute these Innovative products.
Based on our strategic alliance with Nationwide, we expect to create a suite of innovative solutions and generate considerable new business over the medium term.
Jeremiah Bickham: These two distinct initiatives serve as clear examples of how our strong relationships with top-tier trading partners create unique opportunities for Ryan Specialty. We are confident that similar opportunities will continue to arise in the future. These initiatives are also great examples of how investing in the near term positions us to generate significant new business, organic growth, and margin benefits as we progress through 2026 and beyond. The ongoing secular growth drivers in the industry and our specific strategies that Tim mentioned, illustrated in part by these two initiatives, give us high conviction in delivering meaningful growth in 2026 and for the foreseeable future. With that, I'll now turn the call over to our Chief Financial Officer, Janice Hamilton, who will give you more details on our financial results. Janice.
These 2 distinct initiatives serve, as clear examples of how our strong relationships with top tier trading partners create unique opportunities for Ryan's specialty.
We are confident that similar opportunities will continue to arise in the future.
These initiatives are also great examples of how investing in the near-term positions us to generate significant new business, organic growth and margin benefits as we progress through 2026 and Beyond.
The ongoing secular growth drivers in the industry and our specific strategies that Tim mentioned Illustrated in part by these 2 initiatives. Give us High conviction and delivering meaningful growth in 2026 and for the foreseeable future.
With that, I'll now turn the call over to our Chief Financial Officer, Janice Hamilton, who will give you more details on our financial results.
Janice.
Janice Hamilton: Thanks, Jeremiah. In Q2, total revenue grew 23%, period over period, to 855 million. Growth was fueled by organic revenue growth of 7.1%, substantial contributions from M&A, which added 13 percentage points to our top line, and continued commissions across all three specialties as we continued to deliver strong underwriting profits for our carrier trading partners. Adjusted EBITDA grew 24.5% to 308 million. Adjusted EBITDA margin expanded 50 basis points to 36.1%, driven by another quarter of strong revenue growth, including recent acquisitions. Adjusted earnings per share grew 13.8% to 66 cents. Our adjusted effective tax rate was 26% for the quarter. Based on the current environment, we expect a similar tax rate for the remainder of 2025. Turning to capital allocation, M&A remains our top priority now and for the foreseeable future.
Thanks Jeremiah in Q2 total revenue grew 23% period over period to 855 million.
Growth was fueled by organic Revenue growth of 7.1%, substantial contributions from m&a which added 13 percentage points to our Top Line and contingent commissions across all 3 Specialties as we continue to deliver strong underwriting profits for our carrier trading partners.
Adjusted Evac grew. 24.5% to 308 million.
Adjusted Evotech margin expanded 50 basis points to 36.1%, driven by another quarter of strong revenue growth, including recent acquisitions.
Adjusted earnings per share grew 13.8% to 66 cents.
Our adjusted effective tax rate was 26% for the quarter.
Based on the current environment, we expect a similar tax rate for the remainder of 2025.
Turning to Capital allocation m&a remains our top priority now and for the foreseeable future.
Janice Hamilton: We ended the quarter at 3.5 times total net leverage on a credit basis, and we remain willing to temporarily go above our comfort corridor for M&A that meets our criteria. Our strong free cash flow and the strength of our balance sheet provide flexibility to continue executing on strategic M&A opportunities. Based on the current interest rate environment, we expect to record GAAP interest expense, which is net of interest income on our operating funds, of approximately 223 million in 2025, with 57 million to be expensed in the third quarter. Turning to guidance, for the full year 2025, we are now guiding to organic revenue growth of 9% to 11%. Given the recent significant decline of property pricing, we see this trend continuing at least in the near term. This drives our expectation that our property book will decline modestly for the full year.
We ended the quarter at 3.5 times, total net leverage on a credit basis and we remain willing to temporarily go above our comfort Corridor. For m&a, that meets our criteria
Our strong free cash flow and the strength of our balance sheet provide flexibility to continue executing on strategic M&A opportunities.
In the third quarter.
Turning to guidance.
For the full year, 2025, we are now guiding to organic Revenue growth of 9 to 11%.
Given the recent significant decline in property pricing, we see this trend continuing at least in the near term.
Janice Hamilton: As Tim discussed, there is the potential for these property pricing declines to be short-term in nature, but this is not reflected in our guidance. Our revised guidance also assumes overall macro uncertainty, continued effects of elevated borrowing costs, and ongoing trade war and tariffs continuing to have a near-term impact on construction. Looking at the second half, we expect Q3 organic revenue growth to be higher than Q2 and Q4 as these quarters are heavily weighted towards property. While our revised guidance reflects our current assessment of market conditions, as Tim mentioned, we remain relentless in our goal to yet again hit double-digit organic growth for the full year. We are also now guiding to adjusted EBITDA margins of 32.5% to 33%.
This drives our expectation. That our property book will decline modestly for the full year.
It's Tim. Discussed there is the potential for these property pricing declines to be short-term in nature, but this is not reflected in our guidance.
Our revised guidance also assumes overall macro uncertainty continue to effects of elevated borrowing costs and ongoing trade war and tariffs continuing to have a near-term impact on construction.
Looking at the second half we expect, Q3 organic Revenue growth to be higher than Q2 and Q4 as these quarters are heavily weighted towards property.
While our revised guidance reflects our current assessment of market conditions, as Tim mentioned, we remain relentless in our goal to yet again hit double-digit organic growth for the full year.
We are also now guiding to adjusted Evac margins of 32.5% to 33%.
Janice Hamilton: In addition to our lower expectations for property, which are partially offset by our variable compensation base, our revised guidance includes the impact of investments, particularly in heavy staffing of exceptional talent to ramp up the Ryan Rhee and Alternative Risk initiatives. As Jeremiah noted, we expect these investments will generate significant new business, organic growth, and margin benefits in the near, medium, and long term. Looking beyond 2025, we remain on track to hit our 35% margin target in 2027. With our differentiated business model focused on growth markets, our ability to provide innovative solutions to clients, an empowering and entrepreneurial culture, unique relationships, scale, and scope, we remain positioned for success over the long term. With that, we thank you for your time and would like to open up the call for Q&A. Operator.
In addition to our lower expectations for property which are partially offset by our variable compensation base, our revised guidance includes the impact of Investments, particularly in heavy Staffing of exceptional talent to ramp up the ryen Reed and alternative risk initiative.
Is Jeremiah noted. We expect these investments will generate significant new business.
Organic growth and margin benefits in the near medium and long term.
Looking Beyond 2025. We remain on track to hit our 35% margin Target in 2027.
With our differentiated business model focused on growth markets, our ability to provide innovative solutions to clients and empowering and entrepreneurial culture, unique relationships, scale and scope. We remain positioned for Success over the long term.
With that, we thank you for your time and would like to open up the call for Q&A.
Operator.
Operator: Thank you. At this time, if you would like to ask a question, please click on the raised hand button, which can be found on the black bar at the bottom of your screen. You may remove yourself from the queue at any time by lowering your hand. When it's your turn, you'll hear your name called and receive a message on your screen asking you to unmute. Please unmute and ask your question. We'll wait for just a moment to allow the queue to form. Our first question will come from Elise Green-Stan from Wells Fargo. Please unmute yourself and ask your question.
Thank you.
At this time, if you would like to ask a question, please click on the raised hand button which can be found on the black bar at the bottom of your screen.
You may remove yourself from the Queue at any time by lowering your hand.
When it's your turn, you'll hear your name called and receive a message on your screen asking you to unmute.
Please unmute and ask your question.
We'll wait for just a moment to allow the queue to form.
Our first question will come from Elise. Greenspan from Wells Fargo. Please unmute yourself and ask a question.
Elyse Greenspan: Hi, thanks. Good evening. My first question, I just wanted to focus on the discussion on just the property and what you guys saw in June, because when you guys provided an update early in the month, you did say Q2 was tracking below the full-year guide, but you still thought you could hit the full-year number. So can you just give us a sense of the pricing declines you saw in June? And then embedded within the GAAP guide, are you assuming similar price declines for the remainder of the year, or are you assuming that the market gets worse relative to what you saw in June?
Hi thanks. Um, good evening. Um, my first question um I just wanted to focus on this the discussion. I just the property and and what you guys saw in June because when you guys provided an update right early in the month you did say Q2 was tracking below the few full year guide but you still thought you could first like the full year number. So you just give us a sense of the the pricing the client you signed June and then embedded within the go guide, are you assuming similar price declines for the remainder of the year or who assuming that the market gets worse relative to what you saw in June?
Janice Hamilton: Hey, Elise, this is Janice. I'll start, and then maybe Tim can provide a little bit more color on property. So you're absolutely right. When we met in June, we were talking about the expectation that organic for the second quarter would fall below our guide range. We saw a rapid decline in property pricing throughout the month of June, which really culminated into the organic number of 7.1%, which is past said, did fall short of our expectations. I'll let Tim touch on the kind of context for the property pricing and what we saw in June. But specific to your other question about what was embedded in the guidance, we are continuing to see the property pricing declines from June carry forward for the remainder of the year. So we are no longer expecting any sort of stabilization or modest improvement in the back half of the year.
Hey Elise. This is Janice, I'll start and then maybe Tim can try a little bit more color on property so you're absolutely right. Uh, when we met in June, we were talking about the expectations that organic for the second quarter would fall below. Our guide range. Uh, we saw a rapid decline in property pricing throughout the month of June, which really culminated into the organic. Number of 7.1% which is Pat said did fall short of our expectations.
Janice Hamilton: This now reflects the same trends that we saw through the end of June, continuing for the remainder of the year and resulting in a modest decline in property now for the full year of 2025 in our guidance.
I'll let him touch on the kind of context for the property pricing and what we saw in June but specific to your other question about what was embedded in the guidance, We are continuing to to see the property pricing declines from June carry forward for the remainder of the year. So we are no longer expecting any sort of stabilization or modest Improvement in the back half of the year. It's now reflects the same trends that we saw through the end of June continuing for the remainder of the year and resulting, in a modest decline in property. Now for the full year of 2025, and our guidance.
Tim Turner: And Elise, I would just add that our property submission flow remains very strong. Our retention levels are high. But the month of June, the rate deceleration accelerated. Last quarter, we saw 10% to 20% reductions on average. This quarter, 20% to 30%. So June really accelerated. We're continuing to win head-to-head in the field. We're producing lots of new opportunities. We believe that these rate depressions are temporary. When things will turn around, we don't know, but we know from history that there is a cycle to this. So we're optimistic. As you know, we've offset these headwinds with very strong casualty performance and numbers, and professional liability has come back very strong, double-digit growth in all of the professional liability lines. So all in all, we're very proud of the results. We overcame this drastic reduction in pricing and property, and we're optimistic for the second half.
We're producing lots of New Opportunities. Um, we believe that, uh, these these rate depressions are are temporary. When things will turn around. We don't know. But we know from history that, uh, there, there there is a cycle to this. So we're optimistic. Um, as you know, we've offset these headwinds with very strong casualty performance and numbers and professional, liability has come back, very strong, double digit growth in all of the professional liability lines. So, all in all we're, we're very proud of the results. We overcame, um, this, this drastic reduction in pricing and property and we're optimistic, uh, for the second half.
Elyse Greenspan: And my second question, can you just provide, I know it sounds like the margin, like tightening of the margin right towards the lower end, I guess, is less of a function of the weaker organic, but more of a function of the investments. I just want to make sure I'm understanding that correct. And can you put a dollar value, I guess, on the investments that you're now expecting, you know, with the Ryan Rhee initiative that you were outlining in the second half of the year?
Then my second question. Can you just provide
The margin, like plating of the margin right towards the lower end. I guess. It's less of a function of a weaker, like the weaker organic, the more of a function of the investment. I just want to make sure um understanding um, that correct. And can you put a dollar value I guess on the on the Investments that you're now expecting, you know, with the fly and re-initiate that you were outlining um, in the second half of the year.
Janice Hamilton: Yeah, Elise, this is Janice again. So you've hit the two items. That's what I mentioned in our prepared remarks. So the main item for moving the midpoint of the range down 25 basis points is looking at the property pricing declines that we've seen through June, and then obviously carrying that forward for the rest of the year, as we've talked about. There's also some additional uncertainty from a macroeconomic standpoint that has affected our construction book. That was probably the other item I spoke about that you didn't highlight that I'm aware. And then additionally, the investments that we're making in Ryan Rhee and also Alternative Risk.
Janice Hamilton: At this point, we're not going to put a number on it, but you know, given the property pricing headwinds that we saw and that we expect to continue for the rest of the year, we're still very pleased with being able to deliver margin expansion in 2025 relative to 2024, and even just the 50 basis points that we put up in the quarter.
Yeah, at least this is Janice again. So you've had, you've hit the 2 items. Uh, that's what I mentioned in our prepared remarks. So, uh, the the main item for moving the midpoint of the range down. Uh, 25 basis points is looking at, uh, the, the property pricing defines that we've seen through June. And then, obviously, carrying that forward for the rest of the year, as we've talked about, um, there's also some additional uncertainty from a macroeconomic standpoint that has affected our construction book. That was probably the other item. I spoke about that that you didn't highlight, um, that I'm not there and then additionally, the Investments that we're making in Ryan Reed and also alternative risks. Uh, at this point, we're not going to put a number on it, but you know, given the the property pricing headwinds that we saw and that we expect to continue for the rest of the year. We're still very pleased with being able to deliver margin expansion in 2025, uh, relative to 2024 and even just the 50 basis points that we put up in the quarter.
Elyse Greenspan: I said one last one. Is it fair to assume wherever you are in the year that the improvement from 25 to 27 would be evenly split between 25th and 27th, or is there anything we need to be aware of between the two years?
And then 1 last 1, is it fair to assume wherever you end the year that the improvement from 25 to 27, would be very split between 25th for and 27 or is there anything we need to be aware of? Um,
Between the 2 years.
Janice Hamilton: Yeah, I think at least at this point, it would be too early to comment on, you know, whether or not that would be even linear, et cetera. We'll obviously be coming back to you in probably relatively short order at the end of the year on 2026 guidance. So you'll have a better idea at that point. But we certainly, you know, always work through the balance of investing in talent and technology for future growth. So keep that in mind. But at this point, not willing to comment on whether that will be evenly spread. But we are still committed to the 35% margin target in 2027.
Yeah, I think at least at this point, it would be too early or too early to comment on you know, whether or not that would be even linear Etc. We'll we'll obviously be coming back to you. Uh, in in probably relatively short order at the end of the year on on 2026 guidance. So you'll have a better idea at that point. But we certainly, you know, always work through the balance of investing and talent and Technology, uh, for future growth. So keep that in mind. Um, but at this point, not willing to to comment on whether that will be evenly spread but we are still committed to the 35% margin Target in 2027.
Thank you.
Operator: Our next question comes from Andrew Clickerman from TD Cowan. Please unmute yourself and ask your question. Andrew Clickerman, your line is now open. Please unmute yourself and ask your question. Okay, in the meantime, we'll move forward to Alex Scott from Barclays. If you could just unmute yourself and ask your question.
Our next question comes from Andrew klickman. From TD Cowen. Please unmute yourself and ask your question.
Andrew klickman your line is now open. Please unmute yourself and ask your question.
Okay, in the meantime, we'll move forward to Alex Scott from Barclays. If you could just unmute yourself and ask your question.
Alex Scott: Hey, yeah, thanks for taking the question. I first wanted to start on the construction and the lower projects that you've seen. And I was interested if you've seen any changes in those trends recently. I mean, I guess particularly in July is the economy has felt like it's on a little more firm footing. Have you seen any relief in that? Are you seeing that starting to pick up at all?
Hey, yeah, thanks for taking the question. Uh, I just wanted to start on the construction and, and the lower projects, uh, that that you've seen and I was interested. If you've seen any changes in those Trends recently. I mean I guess particularly in July is
Is the economy has felt like it's on a little more firm footing. Have you seen any relief in that? Are you seeing that starting to pick up at all?
Tim Turner: It's remained fairly constant in terms of it. It's been a slowdown. So we're quoting a lot. We're getting a lot of opportunities and projects, infrastructure projects, residential construction projects, and just Main Street construction business has been very steady and strong. However, the binding periods have been prolonged, and the period of time from quote to bind has been extended. So interest rates affecting that, obviously, but again, our flow is as strong as it's ever been. And we expect there to be some change here in the second half, and we think the binding will pick up. But I'd like to remind everyone that a big part of our construction practice group are renewable policies. These are general contractors, subcontractors, annual renewable policies, and that part of construction remains very strong.
It's it's it's remained fairly constant. In terms of it, it's been a Slowdown. So we're quoting a lot. We're getting a lot of opportunities and projects infrastructure projects residential construction projects.
And just Main Street construction business has been very steady and strong. However, The Binding periods have been, uh, prolonged and the and the period of time from quote to bind has has uh, been extended. So interest rates, uh, affecting that obviously, um, but again, our flow is as strong as it's ever been and we expect there to be some change here in the second half. Um, and we think the binding will pick up, but I'd like to remind everyone that a big part of our construction Practice Group.
Annual renewable policies and that part of construction remains very strong.
Alex Scott: That's helpful. My second question, I wanted to see if you could provide any more color around, you know, potential revenue benefits from the nationwide mandate that you got. You know, you provided some commentary on the expense piece of it, but, and you know, we can do our own math using our premiums and so forth. But I just was interested if you could help us out with that at all.
That's helpful. Um my second question I want to see if you can provide any more color around you know potential Revenue benefits from the Nationwide mandate that you got, um, you know, you provided some commentary on the expense piece of it. But and, you know, we can do our own math using their premiums and so forth. But I, I just was interested. If you could help us out with that at all,
Miles Wuller: Are you referring to the Markell?
Alex Scott: Yes, exactly.
are you referring to the Markle?
Yes, exactly.
Miles Wuller: Yes, well, we are very pleased to be appointed by Nationwide Mutual as they are completing this transaction with Markell. We have built a very, very effective delegated authority, MGU, for reinsurance underwriting with our talented team at Ryan Rhee. And they've done a fantastic job putting Nationwide Mutual into a major position of underwriting property and casualty reinsurance. Significant growth, good margins on both sides for Nationwide and for Ryan Rhee. And so when Markell decided to focus more narrowly on direct underwriting of insurance and sell their reinsurance book, we were pleased that we were able to get together with them because we have a very strong relationship with Markell as well. And so the combination of the appeal of Nationwide and our team to Markell, who essentially didn't have the scale that they really felt they needed to have to continue in the business.
Yes. Well, we were very pleased. Uh,
to be appointed by Nationwide mutual as they
Completing this transaction with 1 k.
we have built a very, very
effective.
Um, delegated authority mgu um, for reinsurance underwriting with our talent of the team at Ryan Ree, and they've done a fantastic job.
Putting Nationwide Mutual into a major.
Position of underwriting.
Property and Casualty reinsurance.
uh, significant growth good margins on both sides for
Nationwide and for Ryan Reed.
and so, when Markle decided,
Um, to focus more.
Or more narrowly on.
On the writing of insurance was and sell their reinsurance book. We were pleased that we were able to get together with them because we have a very strong relationship with Markel as well.
and so the combination of
the appeal of Nationwide and our team to Markel, who essentially were
um,
Miles Wuller: And so it's a great opportunity for Nationwide and a very strong opportunity for ourselves.
not not didn't have a scale that they really felt they needed to have to continue in the business.
And so it's a great opportunity for Nationwide.
In a very strong opportunity for ourselves.
Janice Hamilton: And in terms of sizing the revenue component to that, we're not going to be able to comment on that specifically at this time, but the things to keep in mind, as Pat said, this is a renewal rights deal. So there, you know, is always an attrition component to that to be considered. Obviously, you'll have to make your own assumptions about, you know, the commission rate, but just consider that, you know, Ryan Rhee and Nationwide have market rates from that perspective. And then for seasonality, you know, Jeremiah mentioned just that, you know, the cost would be heavier in the back half of this year. The margin impact would be heavier in the back half of this year, assuming that the seasonality is more heavily weighted toward the first half of every calendar year.
And in terms of, of sizing, the revenue component to that, um, we're we're not going to, to be able to comment on that specifically at this time, but the things to keep in mind is that said, this is a renewal right deal. Uh, so they're, you know, is always a nutrition component to that to be considered. Um, obviously you'll have to make your own assumptions about, you know, the the commission rate, but just consider that, you know, Brian Rey and Nationwide have Market rates from
Janice Hamilton: And I think that there's probably publicly available financial information out there that can help try to validate that. But obviously, that's dependent on the book of business that is renewed.
That perspective. And then for seasonality, uh, you know, Jeremiah mentioned just that you know the costs would be heavier in the back. Half of the year, the margin impact would be heavier in the back half of this year assuming that the seasonality is more heavily weighted towards the first half of of every calendar year. And I think that there's probably publicly available financial information out there that can help try to um, validate that. But obviously that's dependent on the book of business that is renewed.
Operator: Got it. Okay, thank you. Well, now we'll go back to the line of Andrew Clickerman from TD Cowan. I can see your lines unmuted.
Got it. Okay, thank you.
Tim Turner: Can you hear me now? Can you hear me now?
Well know, go back to the line of Andrew klickman from TD Cowen, I can see your lines on muted. So, please go ahead. Can you, can you hear me now?
Elyse Greenspan: Yes.
Tim Turner: Okay, great. Thank you. Sorry for that before. Just a quick follow-up. Actually, a couple of follow-ups. The Nationwide transaction, I listened to the Markell call this morning, and in reinsurance, they were doing about a billion two in premium. And I guess I know you don't want to answer how much volume you could do, but do you feel confident that you could renew a lot of that?
Can you hear me now? Yes, okay, great. Thank you, I'm sorry for that before. Um, just a quick follow-up. Uh, actually,
A couple of follow-ups. Uh, the Nationwide transaction, uh, I.
have listened to the Markle call this morning, and in reinsurance, they were doing about a billion 2 in, uh, premium
And I I guess I know you don't want to answer how much volume you could do, but do you feel confident that you could renew a lot of that?
Miles Wuller: Yes. We have a tremendous underwriting team that Nationwide is really pleased with, as you can tell. And we have produced very strong underwriting results for Nationwide. And as you know from that call, Markell, they were subscaling their minds and felt that it was appropriate to focus more narrowly. But you know, a great talented team that's coming over with this, and it's very important to us that we have this talented team joining our very talented team. And so our talented team is really very confident, as is Nationwide, that they will grow this book that renews and that it will improve the underwriting results from the book. So this is a win-win for all parties, including the seeding companies to Markell.
Yes, we have a tremendous underwriting team.
That Nationwide is really pleased with. As you can tell and we have produced very strong underwriting results.
For Nationwide. And as, you know, from that call Markell, they were subscale in their minds, um, and felt that it was appropriate to
To focus more narrowly um but you know a great talented team that's coming over um with this and it's very important to us.
That we have this Talent of the team joining our very talented team and so our our talented team is really um, very confident as is Nationwide.
Tim Turner: Sounds very exciting. And then you also mentioned that you're going to expand the relationship with Markell, which is a massive E&S writer. Any color that you can share on that?
Saving companies, who Markel sounds very exciting. And and then you also mentioned that you're going to expand the relationship with Markel which is a massive ens writer any any color that you can share on that.
Miles Wuller: Well, we've had a very strong relationship with Markell over the 15 years that we've been doing business. And as they indicated in that call, they're going to be focusing on specialty lines, you know, principally in the E&S market. And we have this very strong binding relationship with them. Tim, why don't you pick up on that?
well, we've had a very strong relationship with Markel, um, over the 15 years that we've been doing business and as I indicated in that call, they're going to be focusing on specially lines, you know, principally, um, in US market and
Tim Turner: Sure. Markell's been a tremendous trading partner of ours for a very long time. Just very, very focused on E&S in North America. Great success, as Pat said, in binding, but in just Main Street property and casualty business, year in, year out, very, very consistent partner, and great relationships from top to bottom in the organization. So this was a home run with a super, super partner. Yeah. It definitely sounds like it. And maybe just shifting to your comments earlier, I think when Tim, you said in June it shifted down a lot, and then you followed up by saying rates are going down by 20% to 30%. So your model in the guidance assumes that for the balance of the year, property rates are down 20% to 30% year over year. Did I understand that right?
We have this very strong binding, relationship with them, and 10 months to pick up on, that sure Markle has been a tremendous trading partner of ours for a very long time. Um, just very, very focused on ens in North America. Um, great success, as Pat said in binding. But in just Main Street Property and Casualty business uh, year in year out very, very consistent partner and and great relationships from top to bottom in the organization. So this this was a home run, uh, with a super, super partner.
Yeah, it definitely sounds like it and and, and maybe just shifting to your comments earlier. Uh, I think, when Tim Tim, you said, um, in June, it shifted down a lot and then you followed up by saying, uh, rates are are going down by 20 to 30%. So, your model in the guidance assumes that for the balance of the Year. Property rates are down 20 to 30% year-over-year. Is that? Did I understand that, right?
Janice Hamilton: Yeah, Andrew, you got that right. So we're assuming the same conditions that we saw at the end of June continue to play out to the end of the year. Tim also mentioned that just given what we've seen over 100 billion in insured losses this year, and you know, in the situation where there's an average wind season and rates start to turn around, that's obviously going to be upside for us. But at this point, we have no visibility into that turning around, and therefore we are continuing to include that within our expectation for the guide range, and is the single most significant reason for bringing the guide range down this quarter.
Tim Turner: Got it. And then just last one quick one. General and admin expense ratio at 10.9% versus 9.2% year over year. I know you talked a bit about expense ratio picking up, especially with this Nationwide transaction, but any color on why the big jump up in the year over year?
Yeah. Andrew, you you got that, right? So we're assuming the same conditions that we saw at the end of, at the end of June continued to play out to the end of the year. Um, Tim also mentioned, we've just given, you know, what we've seen over 100 billion and insured losses this year and you know, in the in the situation where there's an average win season and great, you know, start to turn around. That's obviously going to be upside for us. But at this point, we have no visibility into that turning around and therefore, we are continuing to include that within our expectation, for the guide range and is the the single most significant reason for bringing the guide range down, uh, this
Got it. And then just last 1, quick 1, uh, General and admin expense ratio at 10.9 versus 92 year-over-year. Um, I know you were you you talked a bit about expense ratio picking up especially with this Nationwide transaction. But, um, any caller on, why the big jump up in the in the year-over-year?
Janice Hamilton: Yeah, Andrew, I talked about this a little bit last quarter, and I think, you know, perhaps there's just some further clarification needed around the adjusted cost of benefits ratio and adjusted G&A ratios. You know, we're expecting the annualization benefit from US Assured to come through, along with Accelerate 2025 savings, to really be benefiting our adjusted cost of benefits ratio. The offset to that from an adjusted G&A perspective is a lot of the investments that we're making, excuse me, in talent and AI are items that, you know, we would expect to see more in the G&A ratio. So I think it's more just a balance of where those savings are starting to flow through that you're seeing the difference year over year, as opposed to anything other than the investment in the platform in G&A.
Tim Turner: Got it. Thank you so much.
Yeah, Andrew. I I've talked about this a little bit last quarter and I think, you know, perhaps there's just some further clarification needed around the adjusted, confident benefits ratio and adjusted GNA ratios. You know, we're expecting the annualization benefits from us ashore to come through, along with accelerate 2025 savings to really be benefiting our adjusted content benefits ratio, uh, the offset to that from an adjusted GNA perspective. Is a lot of the Investments that we're making, excuse me, in talent and AI are items that, you know, we would expect to see more in the GNA ratio. So I think it's more just the balance of where those savings are starting to flow through that. You're seeing the, the difference year-over-year as opposed to anything other than the investment in the platform, uh, in GNA. Got it. Thank you so much.
Operator: Thank you. Our next question will come from Mayor Shields from KBW. Please unmute yourself and ask your question.
Thank you. Our next question. Will come from mayor Shields from KBW. Please unmute yourself and ask your question.
Meyer Shields: Great. I hope I'm coming through. Tim, I was hoping you'd talk more broadly about whether there's a risk that the same way properties soften a lot faster than a lot of experts expected, is there a similar risk of unexpected softening maybe on casualty lines that are hardening now?
Um, great. I hope I'm coming through. Um, Tim I was hoping you talk more broadly, um, about whether there's a risk that the same way property softened, a lot faster than a lot of experts expected, is there this a similar risk of unexpected softening, maybe you're on casualty lines that are hardening now.
Tim Turner: Mayor, I don't believe so. There are so many different attributes to the long tail, high-hazard casualty book that we look at and see every day. Loss cost adjustment factors accelerating, combined ratios continue to be challenging. And again, this is in a very narrow segment of the commercial market, high-hazard, long-tail casualty business. We see more firming in niches like transportation, certain consumer product liability, habitational, doing a lot of damage to the balance sheets of many insurance companies. And other niche firming phenomenons continue to drive the business into the channel with no sign of any of that business going back into the admitted market. So we're very, very bullish on casualty business, including certain lines of professional liability.
I I don't believe so I I there are so many different attributes to the long tail, High Hazard casualty book that we look at and see every day. Um, lost cost adjustment factors accelerating combined, ratios continue to be challenging and and again this is in a very narrow segment of the commercial Market. High Hazard, longtail casually business. We see more firming and niches like Transportation. Uh, certain consumer product liability. Um, habitational doing a lot of damage to the balance, sheets of many insurance companies and, and other Niche firming phenomenons continue to drive the business into the Channel, with, no, no sign of any of that business going back.
This, including certain lines of professional liability.
Meyer Shields: Okay, that's very helpful. And I don't know if this is a silver lining, but when we talk about the revenue pressure associated with property rate decreases, does that provide more property-focused MGA acquisition opportunities?
Okay, that that's very helpful. Um, and I don't know if this is a silver lining, but when we talk about the revenue pressure associated with property rate decreases, does that provide more property focused, MGA acquisition opportunities,
Miles Wuller: Well, Mayor, we have the benefit of velocity dramatically rounding out our portfolio last year. So that's been part of our success in light of the rate pressure, is our ability to provide full portfolio solutions across the value chain to E&S wholesalers has increased the number of VAT bats. So we've, with velocity under our ownership, we've actually been able to increase their capital under management. We've been able to increase their distribution through access to incremental RT wholesalers. And so the reality is we are always on the lookout. We maintain an active M&A dialogue, but the product set is complete at this stage, and it's more likely that, as you've seen in past cycles, we've seen a flight to quality of carriers looking to contribute their capital to our management. So staffing and capital is just as likely as M&A in property.
Mayor, we we have the benefit of velocity dramatically rounding out our portfolio last year, so that's been part of our success. And light of the rate pressure is our ability to provide a full portfolio Solutions across the value chain to ens wholesalers has has increased the number of bats. So what we've with velocity under our ownership, we've actually been able to increase their
Capital under management. We've been able to increase their distribution through access to incremental RT, wholesalers.
And so the reality is we we are always on the lookout. Um,
it's we we maintain a a an active m&a dialogue but the the products that is complete at this stage and it's more likely that
As you've seen in past cycles, we've seen a flight to quality of carriers looking to contribute their capital to our management. So, staffing and capital is just as likely as M&A and property.
Meyer Shields: Great. Thank you so much, Ron.
Great. Thank you so much, ma'am.
Operator: Our next question will come from Mike Zaremsky from BMO Capital Markets. Please unmute yourself and ask your question.
Next question will come from Mike zaremski from BMO Capital, markets. Please, I meet yourself and ask your question.
Meyer Shields: Great, thanks. I'm going back to the property discussion. So this rapid rate of decline, which you're seeing, and I'm assuming it's not obviously the entire portfolio, but in a big chunk of the portfolio, causing organic for property, the outlook to be, you know, negative for the year. I think we understand that. I guess just, you know, if we, and Tim, to your point about, you know, the property market is just inherently volatile, you know, if this is a not quote-unquote normal wind season, that rates could change materially. But I guess, and I just want to think through, in our world, we have to think quote-unquote normal. So given the pace of decline, if we think out past 25 into 26, 27, should we now be assuming that the base is lower, right?
Hey great, um thanks. Um um, going back to the uh the property discussion.
Um, so the the this rapid rate of decline which you're seeing in, I'm assuming it's not obviously the entire portfolio but in a big chunk of the portfolio um causing organic for property to Outlook to be, you know, negative for the year. I think we we understand that I guess just you know if we in a Tim at to your point about you know the the the property Market is just inherently volatile. You know if this is a
Meyer Shields: So, you know, for example, you might have a view that property over long periods of time increases, goes back to plus, I'm making it up, plus 10%. But should we only grade up property slowly? Just is that the right thought when we're thinking about kind of outer year baselines for property organic growth for Ryan?
Not quote unquote normal, um, win season that rates could change materially. But I guess in, I just want to think through, in our, in our world. We have to think, quote, unquote normal. So given the pace of decline, if we think out past 2025 into 2026/2027, should we now be assuming that the base is lower, right? So, you know, for example, you might have a view that property over long periods of time increases.
Go back to plus and make me that plus 10%. But should we only grade up properly slowly? Just, uh, is that the right thought? When we're thinking about, kind of outer year, baselines, for for property, organic growth for Ryan?
Tim Turner: Well, I'll start, Mike, and let my colleagues jump in. You know, what we're really looking at is a multi-peril, you know, approach to CAT property. So it's not just about wind. You know, it's obviously lots of flood losses, convective storm losses, wildfire losses in the state of Oregon, lots of new loss activity out there. We're just starting the wind season. We just don't believe this is going to be a long-term challenge here. We had a tough comp quarter to overcome. We had headwinds. But the silver lining here is that we won a lot, frequently, head-to-head competition. Our submission flow continues to be strong. So the business isn't moving back into the standard market. It's our renewal rates. And even new business that we're writing are getting these 20, 30% rate reductions. Do we think that will continue? We don't.
Well, I'll start Mike and and let my colleagues, uh, jump in. Um, you know what, what we're really looking at is a multi Peril, you know, approach to cat property. So it's not just about when, you know, it's obviously lots of flood losses, convective storm losses, Wildfire losses, and the state of Oregon. Lots of new loss activity out there, we're just starting the wind season. We we just don't believe this is going to be a long-term challenge here. Um, we we we we had a tough cop quarter to overcome, we had headwinds but the Silver Lining here is that we won a, a lot frequently head-to-head competition. We our submission flow continues to be strong, so the business isn't moving back into the Standard Market. It's it's our renewal rates and, and even new business that we're writing are, are are getting these 20 30% rate, reductions
Tim Turner: You hear experts all the time in these earnings calls the last week or two, CEOs of big insurance companies saying they think they've hit rock bottom on the rates. So I do believe it will subside, and I do believe it will go the other direction here in the foreseeable future.
Do we think that will continue? We don't you hear experts all the time and and these earnings calls the last week or 2, CEOs of big insurance companies saying, they think they've hit, rock bottom on the rates. So I do, I do believe it will subside and I do believe it will. It will go the other direction here in the foreseeable future.
Janice Hamilton: But to be clear, that's not reflected in our guidance.
Tim Turner: Yes, that's the outlook.
But to be clear that's not reflected in our guidance. Yes, that's
Meyer Shields: Understood. I'm switching to the inorganic component. You know, revenues, it looked like they were better than expected, total revenue, sorry. We'll definitely put pen to paper on the exciting nationwide deal. From a utilization of a future free cash flow perspective, you know, is the pipeline continuing to be strong and you would, you know, potentially be able to use all free cash flow and new debt on top of new EBITDA? Or just kind of going to get your views on the M&A environment maybe, and I think we probably have to take into account the nationwide deal too for cash usage potentially. Thanks.
That's the Outlook. Yeah.
understood, I'm switching to the
You know, potentially be able to use all free cash flow and new debt on top of new ibida or just kind of going to get your views on the uh the m&a environment. Maybe. Um and I think we probably have to take take into account the the Nationwide deal too. Um for cash usage potentially, thanks.
Janice Hamilton: Yeah, thanks. I'm just going to give a quick update, and then I think Pat wants to comment on the pipeline a little bit. And I just want to go back on nationwide for a second because I know Andrew asked the question about, you know, how much we think that we can renew. And I think there is certainly the conviction that, you know, we will be reviewing the portfolio, we'll be working with the new talent to, you know, assess, you know, the elements of the portfolio that need to be renewed, working with nationwide on that risk appetite. So I think it's too early to put a number on it, but, you know, certainly something that we'll be working towards over the coming months. And as Jeremiah said, it's going to be, you know, accretive to us starting in the beginning of 2026.
Yeah, thanks. Uh, I'm just going to give a quick update and then, I think Pat wants to comment on the pipeline a little bit. Um, and I just want to go back on Nationwide for a second because I know, Andrew asked the question about, uh, you know, how much we think that we can renew and I think there there is certainly the, the conviction that, you know, we, we will be reviewing the portfolio. We'll be working with the new talent to, you know, to assess, you know, the, the elements of the portfolio that need to be removed, renewed, uh, working with Nationwide on that risk appetite. So, I think it's it's too early to put a number on it, um, but, you know, certainly something that we'll be working towards over the coming months. And as Jeremiah said, it's going to be, you know, a creative to us, starting in the beginning of 2026.
Janice Hamilton: Just taking a step back in terms of the pipeline from an M&A perspective, you know, I think just based on where our leverage is at 3.5 times, I've said before, you know, we would have expected to basically be lever about a full turn from where we were at our high watermark previously. That's probably down to about, you know, eight-tenths of a turn just based on the recent acquisitions that we've done. But we still feel like we have ample capacity to do the M&A that we have in our pipeline, and I know Pat would like to talk more about that.
Um, just taking a step back in terms of the... the... the...
Miles Wuller: Yes, well, the M&A pipeline is robust. There's a lot of activity. We've looked at a lot of opportunities. We have a good, as I said, strong pipeline, which includes what's talking about the large deals. We've been focusing in on bringing in top talent, and with acquisitions that we've been making, we've got some fantastic new talent. And as we say, M&A is next year's organic growth and the following years. And so with this robust pipeline, and the recent deals that we've completed are performing at very high levels. Miles referenced velocity, but we've had great success of blending, attracting this talent, integrating them into our system, into our teams, and increasing their productivity. So we are going to continue to be prudent in our leveraging, but we are a destination of choice.
Pipeline from an m&a perspective. You know I think just based on where our Leverage is at 3.5 times. I've said before, you know we would have expected to to basically be lever about a full turn uh from where we were at our high water mark. Previously. That's probably down to about, you know, 8/10 of a turn just based on the recent acquisitions that we've done. But we still feel like we have ample capacity uh to do the m&a that we have in our Pipeline and I know Pat would like to talk more about that.
yeah, so with them and I m&a pipeline,
Is robust.
There's a lot of activity. We've looked at a lot of opportunities. We have a good. I said, strong pipeline.
Which include Osaka. The large deals.
um, we
Using it on.
bringing top talent and
We've been making some fantastic new acquisitions, and we've got some fantastic new talent.
And as we say, Evan, a
Um, is next year's.
Organic growth in the following years.
and so with this robust pipeline, then
the recent deals that we've completed.
Are performing at very high levels, miles of reference velocity, but, uh, we've had great success of blending. Um, the tracking is Talent, integrating them into our system into our teams and increasing their productivity.
so, we
We are going to continue to be prudent in our leveraging, but we are a destination of choice.
Miles Wuller: In the majority of cases that we've done, and we expect that to continue, I think we're a destination of choice, we believe, in terms of the combination of nationwide and Ryan's specialty for Markell. So we keep that in mind as we're looking at M&A opportunities. There are people who want to join us. There are people who want to bring their businesses to ours. And so we're very optimistic about the future on M&A. And as we've talked about, a lot of these levers we've been pulling to build organic growth that are, in the short term here, hitting some decline because of expectations because of rate decline. But the growth in the business itself, we believe, is really quite strong. And that's because we've done some very good M&A activity and attracted a lot of really good talent.
Uh, in the majority of cases that we've done and we expect that to continue. Um, I think we're
a destination of choice. We Believe.
um,
in terms of the combination of Nationwide and Ryan specially formal.
Um, so
We keep that in mind as we're looking at m&a opportunities are people who want to join. Us are people who want to bring their businesses to ours.
And so we're very optimistic about the future on m&a.
And as we've talked about a lot of these levers, we've been pulling to build organic growth that
are in the short term here hitting.
Um, some decline because of this, this expectation of a rate decline.
But that.
Miles Wuller: And so we've been bringing talent in for alternative risk. We're bringing talent in for the reinsurance. We're very pleased with this team we're getting from Markell. So we get a big chunk of pretty top professionals from Markell Rhee. So we just keep building on the quality of our talent and building on the opportunity to serve our clients ever more appropriately and effectively.
Growth in the business itself we believe is really quite strong and that's because we've done some very good m&a activity and attracted a lot of really good talent. And so, we've been bringing talent in for alternative risk. We're bringing talent in for the reinsurance. We're very pleased with this team. We're getting from Markel. So we get a big chunk of pretty top professionals, uh, from our Kel ree. So we just keep building on the quality of our talent and building on the opportunity to serve our clients ever, ever more uh appropriately and effectively.
Meyer Shields: Thank you.
Thank you.
Operator: Our next question will come from Robert Cox from Goldman Sachs. Please unmute yourself and ask your question.
Our next question will come from Robert cops. From Goldman Sachs. These will meet yourself and ask your question.
Meyer Shields: Hey, good evening. I just wanted to go back to casualty. I'm curious how the growth in casualty in the second quarter compared to the growth in casualty in the first quarter, and are you embedding a change in expectations there in the guidance, or is it all property?
Hey, good evening.
I just wanted to go back to casualty.
Uh, Curious how the growth in casualty in the second quarter compared to the growth in casualty in the first quarter. And are you embedding a change in expectations there in the guidance?
Or is it all property?
Janice Hamilton: Yeah, so casualty was a strong contributor to our growth in both the first and second quarters, and we are continuing to expect that into the second half of the year.
Tim Turner: Yeah, there's no letup at all in the major casualty lines. And in fact, we see more niche firming phenomenons. I mentioned a few earlier, Rob, but I didn't mention energy, public entity, and municipalities. Certain consumer product liability continues to create a lot of loss dynamics and heavier flow there. So, you know, we're very, very bullish that we can continue to grow our casualty book, especially in these high-hazard areas. So we're excited about it.
Strong contributor to our growth in both the first and second quarters. We continue to expect that into the second half of the year.
Yeah, there's no let up at all in the in the major casualty lines.
And and in fact, we see more Niche firming phenomenons. I mentioned a few earlier Rob, but I didn't mention energy public, entity and municipalities, um, certain uh, consumer product liability continues to to create a lot of loss Dynamics and, and heavier flow there. Um, so you know, we're very, very uh, bullish that we can continue to to grow our casualty book, especially in these high Hazard areas. So we're we're excited about it.
Meyer Shields: Thanks, that's helpful. And then I just had a follow-up on some of the recent acquisitions you've done. I think some of these bigger MGA acquisitions are rolling into organic growth over the next three quarters or so, like US Assure. Could you give us a sense generally on your organic growth outlook on those acquisitions relative to the overall firm?
Thanks that's helpful. And then I just had to follow up on some of the recent acquisitions. You've done, I think some of these bigger MGA Acquisitions are rolling into organic growth, over the next 3 quarters or so like us ashore. Could you give us a sense?
Generally on your organic growth, outlook on those Acquisitions relative to the overall firm.
Miles Wuller: Yeah, Rob, I appreciate the question. So US Assured, you are correct, it does roll into the end of Q3. You know, Janice did highlight it. There are some realities to tackle. So there's higher building costs, less available labor, sustained higher borrowing costs have all created headwinds in construction starts. You know, every time there's macroeconomic uncertainty or trade war, the builders are ultimately repricing these projects, in many cases revisiting financing. And the outcome, as Tim touched on, is increased time between quoting and inception of coverage. But I want to emphasize that the US Assured, as well as our other builders' best practice, have tremendous open-quoted pipelines, some of the largest we've seen. And we do expect to see it bind as the year goes on. Close rates would certainly accelerate in a lower interest rate environment.
Yeah, Rob, I appreciate the question. So, you are assured. You are correct; it does roll into the end of Q3.
Um, you know, Janice did highlight it. There there are some realities to tackle so
Miles Wuller: But most importantly, Rob, I want to emphasize that our core investment thesis for expanding these assets remains intact. There's been a recent study that there's as much as eight to nine million shortfall of available housing units within the US that needs to be addressed in the coming years. So we believe in the asset when we bought it, and we believe in its outlook to contribute to the coming quarter.
their higher building costs less available labor sustained. Higher higher borrowing costs, have all created headwinds in construction starts, you know, every time there's there's macroeconomic uncertainty or trade War. The builders are ultimately repricing. These projects in many cases, revisiting financing. And the outcome is Tim touched on is, uh, increased time between coding and Inception of coverage, but I want to emphasize that the US assured as well as our other builders risk. Practice have tremendous open coded pipelines. Some of the largest we've we've seen. And we, we, we do expect to see it bind as the year goes on. Close rates would certainly accelerate in a, in a lower interest rate environment. But most importantly, Rob I want to emphasize that our our core investment thesis for expanding these assets remains intact. There's been a recent study that there's as much as 8 to 9 million
Shortfall of available housing, units, within the US that needs to be addressed in the, in the coming years. So we are, we, uh, believe in the asset, when we bought it, and we believe it's in its Outlook to contribute to the coming quarter.
Meyer Shields: Thank you.
Thank you.
Operator: As a reminder, if you would like to ask a question, please click on the raised hand button, which can be found on the black bar at the bottom of your screen. You may remove yourself from the queue at any time by lowering your hand. When it's your turn, you'll hear your name called and receive a message on your screen asking you to unmute. Please unmute and ask your question. We'll now go to Josh Shanka from Bank of America. Please unmute yourself and ask your question.
As a reminder, if you would like to ask a question, please. Click on the raised hand button which can be found on the black bar at the bottom of your screen. You may remove yourself from the Queue at any time by lowering your hand. When it's your turn, you'll hear your name called and receive a message on your screen asking you to unmute. Please, unmute, and ask your question.
We'll now go to Josh. Shankha from Bank of America, please unmute yourself and ask your question.
Josh Shanker: Yeah, thank you. You know, I really appreciate you indulging everybody. I have another Ryan Rhee question. More or less, I just want to give you an opportunity to like tell the story a little bit. What capabilities does Ryan Rhee have? This is always an industry that seems to be dominated by three participants, and everyone else is treated as an also-ran. Are there capabilities that they have that you don't have? Is Ryan Rhee a real competitor? I mean, this is obviously a large, large deal, so the answer is yes. Can you talk a little about what you can do at Ryan Rhee compared to the big three?
Yeah, thank you. You know, I really...
Appreciate you indulging, everybody. I have another Ryan arey question, um, more or less. I just want to give you an opportunity to like, uh, tell the story a little bit. What capabilities does Ryan rehab. This is always an industry that's that's things. Be dominated by 3, participants, and everyone else is treated as an all-around are their capabilities that they have. That you don't have, is, is Ryan Reed, a real competitor of? I mean, this is actually a large large deal. So the answer is yes, can you talk a little about what you can do at Ryan Reed, compared to the Big 3
Janice Hamilton: Could you repeat the company that you're comparing it to?
Could you repeat the, the company that you're comparing it to?
Josh Shanker: Ryan Rhee.
Janice Hamilton: Ryan Rhee.
Josh Shanker: Guy Carpenter and.
Janice Hamilton: Oh, okay.
and Ryan Carpenter and, um, and and
Josh Shanker: Okay, well, they're, they do, we do business with them. Ryan Rhee does business with them.
Okay, well there there they do. We do business with them.
Tim Turner: Oh, I don't want you to disparage your competitors. I want you to talk about the capability. Are there things that Ryan Rhee can do?
Miles Wuller: No, they're not competitors. Excuse me. They're not competitors. They bring us business. They are not competitors. We do not, we're not a reinsurance broker. We're a reinsurance management underwriter.
Brian Reed. Does their clients? I don't want you to disparage, your competitors. I want you to talk about the capability. Are there things that you do? They're not compared
Excuse me, they're not competitors.
They bring us business.
They're not competitors.
Josh Shanker: Okay, there's no broking capabilities you have within the Ryan Rhee?
We do not, we're not a reinsurance broker; we're a reinsurance. There's no broking done.
Okay, there's there's no broken capabilities. You have within the Ryan.
Miles Wuller: No. No, we're an underwriter.They
No no, we're not a writer.
Pat Ryan: love it. They bring us business.
You're the under writer. They love us. They bring us business.
Miles Wuller: So Nationwide is the capacity for Ryan Rea, and Ryan Rea is a reinsurance. And the added, I mean, I think maybe the harder your question is, though, the added capabilities through the acquired book of business and the talent coming along with it does increase the specialty footprint of the portfolio.
So so Nationwide is the capacity for Ryan Ree and Ryan ree is a reinsurance and the addict. I mean I think maybe the hardier questions though the the added cap capabilities through the acquired book of business and the the talent coming along with it, does increase the specialty footprint of the of the portfolio.
Pat Ryan: It increases the scale, increases the geography, increases the talent, it increases the scope, it increases everything. And we expect that's going to be a very important contribution to our future. But I want to be clear, I don't think we were. We are not a reinsurance broker. We hire them. They bring us business. They're our production force. Gallagher is a very good producer for us. Ryan Rea is a good producer for us. Guy Carpenter is a big producer for us. They love us.
and increases the scale, increases the geography, increases the talent, it increases the scope,
It increases everything, and we expect that's going to be a very important contribution to our future. But I want to be clear: I don't think we work. We are not a reinsurance broker.
We hire them. They bring us business. There are production force. Gallagher is a very good producer for us and raises a good producer for us. Guy Carpenter is a big producer for us. They love us.
Miles Wuller: Fantastic. That helps me a lot. And I appreciate the answers. Thank you.
Fantastic. That that that helps me a lot. Um, and I appreciate the answers. Thank you.
Tim Turner: Thank you. And our next question will come from Katie Sackett from Autonomous. Please unmute yourself and ask your question.
Thank you. And our next question will come from Katie Sakis from Autonomous. Please unmute yourself and ask your question.
Jeremiah Bickham: Hi. Thank you. And good evening. I just wanted to circle back to the discussion of the organic guidance this year. And I apologize if I'm sort of beating a dead horse here, but you guys do discuss, you know, remaining relentless in your goal to deliver a double-digit organic growth result this year. It seems like there's a scenario where you're more in the high single-digit range. And assuming that your current view on property pricing continuing to decrease into the end of the year brings organic to the midpoint of the 9 to 11 percent range, how do you kind of view the pushes and pulls from the 9 to the 11, or what might ultimately take you down to the lower end of that range this year?
Hi, thank you and good evening. Um,
I I just wanted to to Circle back to the discussion of the organic guidance, this uh this year. And I apologize if I'm sort of beating a dead horse here, but you guys do discuss. You know, remaining Relentless in your goals to deliver a double digit organic growth, result this year. It it seems like there's a scenario where you're more in the high single digit range. Um, and assuming that your current view on property pricing
Continuing to decrease into the end of the year, brings organic to the midpoint of the 9 to 11% range. How do you kind of view the pushes and pulls from the 9 to the 11? Or or what might ultimately take you down to the lower end of that range this year?
Janice Hamilton: Thanks, Katie. Well, I think we, you know, we've talked about, obviously, what the property expectations are and bringing us down. Kim has commented on the strength in casualty. And we're really focused on capitalizing the specific areas of growth that continue to accelerate: high hazard casualty and transportation, you know, specifically. And I think that there are, you know, a number of ways that we have proven that we are continuing to navigate these headwinds. We're at 9.6% organic growth for the year to date. And in this context, 9 to 11 would be a fantastic year when our business could be down, you know, a third of our business could be down modestly. But we have a number of different initiatives. We have strong business growth across a number of different business lines.
Thanks Katie. Well, I think we, you know, we've talked about, obviously, what the, uh, the property expectations are and bringing us down, Tim and his commented on the strengths and Casualty, and we're really focused on capitalizing the specific areas of growth that continue to accelerate High has a casualty and transportation, you know, specifically. And I think that there are, you know, a number of ways that we have proven that we are continuing to navigate these headwinds. We're at 9.6% organic growth for the year to date.
Janice Hamilton: And on balance, we feel good about our goal and continuing to hit that double-digit organic growth.
Pat Ryan: One of the other points that we should add is that we are balancing our business by bringing in more capital for our clients with alternative risk, building that nicely. And that's adding incrementally to growth. The scale is escalating nicely. And we keep pulling levers to enhance our organic growth. We're very proud of the fact that we've been double-digit organic growth for all of our public life and most of our life before going public. We take this very seriously. And we are constantly looking for ways to increase our productivity and fight the headwinds that we get from price declines. And so what we've been talking about, and we've lowered the guidance just because the market is, as Janice has very well said, the market has been rapidly de-escalating prices on a third of our business.
And in this context, 9 to 11 would be a fantastic year. When our business could be down, you know, a third of our business could be down modestly. Um, but we have a number of different initiatives. We have strong business growth across the number of different business lines and on balance. We feel good about our goal and continuing to hit that double digit organic growth.
1 of the other points that we should add.
Is that we are balancing our business by bringing, in more capital for our clients, with alternative risk.
Building that um nicely and that's adding incrementally to growth. The scale is
is escalating nicely and we keep pulling levers.
To enhance our organic growth, we’re very proud of the fact that we've achieved double-digit organic growth for all of our public life and most of our life before going public. We take this very seriously, and we are constantly looking for ways to increase our productivity and combat the headwinds that we face from price declines.
Pat Ryan: And so we feel really good that we're hovering at double digits in spite of all of that pressure. And so believe that we are working every possible lever, pulling it, and stimulating our productivity and our underwriters and our brokers to end this year at double-digit organic growth.
And so what we've been talking about and we've lowered the the guidance just because the market is, as Janice is very well said, the market has been rapidly de-escalating prices on the 3rd of our business.
And so we feel really good.
That we're hovering at double digits in spite of all of that pressure, and so believe that we are working every possible angle.
Lover, pulling it and stimulating our product productivity and our underwriters and our brokers to end this year at double digits.
Organic growth.
Jeremiah Bickham: Thank you. I do appreciate the color there. Perhaps as a follow-up in a completely different line of questioning, we've heard rather emphatic and pointed discussions from some carriers over the last couple of weeks describing, you know, in their words, a misalignment of incentives in the MGA model.
Thank you. I, I, I do appreciate the, uh, the color there. Um, perhaps as a follow-up and a completely different, uh, line of questioning, we've heard rather emphatic and pointed discussions from some carriers over the last couple of weeks describing, you know, in their words, a misalignment of incentives in the MGA model.
Janice Hamilton: Katie, you're cutting out a little bit. I don't know if you can try to start over again or see if you can get a better signal.
again, or
see if you can get a better signal.
Jeremiah Bickham: My apologies. Are you able to hear me?
My apologies. Are you able to hear me?
Janice Hamilton: Yes.
Pat Ryan: Yes. We didn't quite understand the question, Katie.
Jeremiah Bickham: I apologize. I'll try to.
Yes. Yes, we didn't quite understand the question. Okay.
Pat Ryan: Can you repeat it?
Jeremiah Bickham: Yeah. We've heard some pretty emphatic discussions from carriers over the last couple of weeks regarding what they describe as a misalignment of incentives in the MGA model. What do you make of that, and how might you respond to those characterizations?
Regarding what they describe as a misalignment of incentives in the MGA model, what do you make of that? And how might you respond to those characterizations?
Pat Ryan: Oh, that's probably true in some of them. It's certainly not true at all with us. We are aligned with our capital providers. We have a very strong relationship with our capital providers. And our alignment, you know, we value very highly. And I think even the people who complain about MGAs say that's not across the board. And they're referring to us because they know that we're aligned. And that's why those capital providers are standing at the door trying to get more of our business. And that's evolved over 15 years to a point now where we have the top capital providers all around the world, different regions of the world. And people who would not give us their pen in the past are now doing that. So we're very proud of our alignment. What others do is not our business.
Well, that's probably true in some of them and certainly not true at all with us. We are aligned with our Gap Capital providers. We have very strong relationship with our Capital providers, and our alignment. We we value very highly and I think even the people who complain about mgas say that's not across the board, and they're referring to us because they know that we're aligned
And that's why that's why Capital providers are standing at the door, trying to get more of our business.
And that's evolved over 15 years to a point. Now where we have the top Capital providers all around the world, different bridges of the world and people who will not uh give us their penned in the past are now doing that. So we have but we're very proud of our alignment.
What others do is not our business.
Jeremiah Bickham: Great to hear. Thank you.
Miles Wuller: Katie, we'd emphasize that we've made the investment in the platform over the last 10 to 15 years, the top decile talent in the front office, the robust infrastructure around it of actuarial. And the outcome has been a control and governance platform that can help curtail growth when needed. At our scale, we have the comfort to shut off lines when needed, slow growth in lines. Because as Pat referenced, at any given point, we have enough new opportunities in the pipeline that we are to continue this kind of double-digit structural growth going forward. But we've made the investment. Carriers are coming to us for access to niche solutions, diversification of their core business, improved cost efficiency, increased speed to market. And on top of that, our underwriting results to date are highly differentiated from the rest of the marketplace, both MGUs and insurance carriers alike.
Great to hear. Thank you, Katie. We we done.
We emphasized that we've made the investment in the platform over the last 10 to 15 years, the top decile talent in the front office, and the robust infrastructure around it of Actuarial.
Miles Wuller: So we think it's a durable advantage to our carrier clients that's going to persist.
Um and the the outcome has been a a control and governance platform that can help curtail growth when needed. We at our scale, we have the Comfort to shut off lines when needed slow growth in lines. Because as Pat referenced at any given point, we have enough new opportunities in the pipeline that we are to to continue this kind of double digit. Structural growth going forward, but we've made the investment. Uh, carriers are coming to us for Access initial Solutions. Diversification of their Core Business, improved cost efficiency, uh increased speed to Market. And and on top of that our our underwriting results to to date are highly differentiated from the rest of the marketplace, both mgus and insurance carriers alike. So we we think it's a, a durable advantage to to our uh, carrier clients that's going to persist.
Jeremiah Bickham: Got it. Thanks for the color.
Got it. Thanks for the color.
Tim Turner: Thank you, Katie. And if that concludes the questions, then that's all we have for today. So I'll hand back to management for closing remarks. Thank you.
Thank you Casey and if that concludes the questions then that's all we have for today. So I'll hand back to management for closing remarks. Thank you.
Pat Ryan: Well, thank you all for joining us. Very good questions. Thank you for the opportunity to share our thoughts with you and our results. And we look forward to talking to you a quarter from now. Thank you.
Well, thank you all for joining us. Very good questions. Thank you for the opportunity to share our thoughts with you and our results, and we look forward to talking to you.
Porter from now. Thank you.