CHICAGO - Ryan Specialty Group (NYSE: RYAN), a global specialty insurance organization, has announced the signing of a definitive agreement to acquire US Assure Insurance Services of Florida, Inc. The Jacksonville-based company, known for its builder’s risk insurance programs, will be integrated into Ryan Specialty's Underwriting Managers Specialty division.
US Assure has been a prominent player in the builder's risk insurance market since its inception in 1977, catering to the small to middle market segment and boasting a network of over 20,000 active agents across the United States. The company is recognized for its proprietary technology platform which streamlines the underwriting and policy issuance process for insurance brokers.
Patrick G. Ryan, Founder, Chairman, and CEO of Ryan Specialty, praised US Assure for its longstanding reputation and successful track record in a challenging insurance class. He expressed confidence in the acquisition, highlighting US Assure's profitable business and its strategic fit within the Ryan Specialty portfolio.
Miles Wuller, President and CEO of Ryan Specialty Underwriting Managers, emphasized the value of US Assure's underwriting talent and technology, noting the potential for growth in residential construction and small commercial projects. He pointed out the current housing shortfall in the United States and the consequent demand for builder's risk insurance.
US Assure's CEO, Ty Petway, acknowledged the significance of joining forces with a partner that shares similar values and a commitment to profitable underwriting. He expressed enthusiasm for the opportunities that Ryan Specialty's platform will offer in terms of growth and expansion.
Zurich American Insurance Company, rated A+ by AM Best, will continue to be the carrier for US Assure's builder’s risk program. The acquisition, which is expected to close in the third quarter of 2024, will maintain US Assure's underwriting agreement with Zurich for admitted construction projects, and the company's services will remain accessible through its current website.
The financial terms of the deal have not been disclosed. Dowling Hales acted as the exclusive financial advisor to US Assure, while Ardea Partners advised Ryan Specialty.
This acquisition is part of Ryan Specialty's broader strategy to enhance its specialty insurance solutions for brokers, agents, and carriers. The information in this article is based on a press release statement.
In other recent news, Ryan Specialty Group reported robust Q1 2024 earnings with revenues reaching $552 million, a 20.6% increase year-over-year, and adjusted EBITDAC rising by 25.8% to $157 million. This growth is further bolstered by its ACCELERATE 2025 initiative, expected to yield annual savings of about $60 million by 2025. The company also announced significant changes to its executive leadership team, with Edward F. McCormack set to become the CEO of RT Specialty, and Brenda Austenfeld and Michael T. VanAcker stepping into the roles of Co-Presidents.
Wells Fargo adjusted its stance on Ryan Specialty Group, downgrading the stock from Overweight to Equal Weight, but increasing the price target to $60. The firm's new EPS forecasts for the years 2024, 2025, and 2026 are $1.78, $2.18, and $2.60, respectively, reflecting modest changes in the company's organic revenue and share count assumptions.
BofA Securities initiated coverage of Ryan Specialty with a buy rating, suggesting the company's valuation does not fully reflect its above-average growth prospects. Conversely, Wolfe Research downgraded the stock from Outperform to Peer Perform, following the company's latest financial guidance and strategic updates.
InvestingPro Insights
Ryan Specialty Group's recent move to acquire US Assure Insurance Services demonstrates its commitment to expanding its footprint in the specialty insurance market. The strategic acquisition is set to bolster Ryan Specialty's offerings, particularly in the builder’s risk insurance sector, where US Assure has established a strong presence. As the company gears up for this expansion, let's examine some key financial metrics and insights from InvestingPro that could provide a deeper understanding of Ryan Specialty's market position.
Ryan Specialty's market capitalization stands at a robust 16.23 billion USD, reflecting the company's significant presence in the insurance industry. The firm is trading at a high earnings multiple, with a Price/Earnings (P/E) ratio of 112.9. However, when adjusted for the last twelve months as of Q1 2024, the P/E ratio is somewhat lower at 79.73, suggesting that investors may be anticipating future earnings growth, as supported by an InvestingPro Tip indicating that net income is expected to grow this year.
Another metric of note is the company's Price/Book (P/B) ratio, which at 29.38, indicates that the stock may be trading at a premium compared to its book value. This could be reflective of the market's optimism about Ryan Specialty's growth prospects and its ability to generate value for shareholders. The company has also shown strong performance with a return of 17.73% over the last three months and a notable 45.04% over the last six months, underscoring its robust market trajectory.
With analysts predicting profitability for Ryan Specialty this year and the company having been profitable over the last twelve months, the acquisition could be a strategic step in maintaining its growth momentum. For investors seeking to delve deeper into Ryan Specialty's financial health and future prospects, InvestingPro offers additional insights, including 8 more InvestingPro Tips available at: https://www.investing.com/pro/RYAN.
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