Ryan Specialty cracks 50-state binding capacity, ramps up hiring & M&A
Ryan Specialty can go to market with 50-state binding authority and bid for the nation’s top deals, but will have to up its game in hiring and M&A to keep the capacity alive and growing, top company officials have declared.
“We can launch a 50-state RFP today,” group president Tim Turner told an equity market conference hosted by the KBW brokerage. “We have the product now; we have enough binding authority underwriters to pitch...”
The shift into 50-state capacity required a revolution in industry thinking as the largest carriers had previously reserved nationwide capacity for its own direct channels, Turner said. The requisite change in approach only came about over the past two to three years. And Turner now brags of two such RFP’s won over the recent period.
With the door to 50-state binding authority open, Ryan Specialty will have to double and triple down on the hiring to handle the volumes and to expand across the relevant lines, Turner said.
“There is never enough underwriting talent,” Turner told conference participants. “You constantly have to be grooming it, recruiting it, acquiring it, because the volume is so great.”
The advent of 50-state capacity could also open the door to the type of major consolidation seen by the brokerage industry unabated over recent decades, Turner said. The prior industry lock-up by major carriers left the US with “hundreds of thousands of boutique binding authorities” that could look like puzzle pieces on a giant US map, he suggested. “That is just starting right now.”
Any move into more binding authority would imply a move towards higher margins, but officials are swearing off a dedicated drive into the segment.
“Despite the massive growth potential ahead of us I binding authority, we are not calling a business mix shift,” CFO Jeremiah Bickham said. “Our goal is about completing that spectrum of distribution capabilities … to make sure we are the most indispensable partners to retail and carriers.” Top natural growth rates likely go to wholesale brokerage, he added.
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