Ryan Specialty's Strategic Acquisition of Velocity Risk Underwriters
Ryan Specialty Acquires Velocity Risk Underwriters
Ryan Specialty (NYSE: RYAN), a prominent force in the international specialty insurance arena, has recently made headlines by signing an agreement to acquire Velocity Risk Underwriters, LLC. This acquisition represents a significant expansion of Ryan Specialty's offerings, particularly in the realm of first-party insurance coverage for properties at risk of catastrophic events. With Velocity expected to join the Ryan Specialty Underwriting Managers division, the company is poised to enhance its capabilities further.
Understanding Velocity Risk Underwriters
Velocity Risk Underwriters was established to tackle the unique challenges associated with catastrophe insurance in the U.S. property market. Since its inception in 2015, it has aimed to provide invaluable coverage for various significant perils, including hurricanes, earthquakes, tornadoes, and hailstorms. This focus has primarily served middle-market and small- to medium-sized commercial businesses, allowing them access to critical insurance products that can often be difficult to secure.
The Importance of Velocity in a Competitive Market
Velocity has positioned itself as a leader in the market, particularly in areas like Florida and Texas, where exposure to catastrophic risks is considerably heightened. This national footprint establishes Velocity as an essential player in the property insurance sector, making this acquisition particularly strategic for Ryan Specialty.
Transaction Details
The acquisition deal is valued at approximately $525 million in cash, subject to customary adjustments. Moreover, this deal will include the acquisition of Velocity's wholly-owned surplus lines carrier, Velocity Specialty Insurance Company (VSIC), which will be handled by FM, a renowned mutual insurance entity known for its strong presence in the commercial property sector.
Industry Experts Weigh In
Executives involved have expressed enthusiasm for the alliance. Miles Wuller, President and CEO of Ryan Specialty Underwriting Managers, noted that this acquisition substantially strengthens their property catastrophe portfolio. He highlighted the innovative underwriting and claims management expertise that Velocity brings to the table, indicating a bright future for the combined entities.
What This Means for Ryan Specialty
For Ryan Specialty, this acquisition not only augments their existing capabilities but also reinforces their commitment to providing industry-leading solutions to their wholesale clients. This union signifies an important step toward enhancing market presence and improving service delivery across the board.
Phil Bowie, Executive Vice Chairman at Velocity, articulated his belief that aligning with Ryan Specialty will open new avenues for growth. He emphasized the benefits of expanding market access and resource availability, which will be essential as they navigate the evolving landscape of insurance risk management.
A Commitment to Exceptional Service
Jake Rothfuss, CEO of Velocity, reassured stakeholders that the ethos and service commitment that have been the cornerstones of Velocity would continue under Ryan Specialty’s umbrella. This alignment indicates that the focus on exceptional service delivery will remain paramount.
Future Outlook
Looking ahead, the acquisition is projected to close by early 2025, pending regulatory approvals. As Velocity integrates into Ryan Specialty, the combined expertise is expected to provide a robust platform for addressing the growing complexities associated with insurance coverage in the wake of increasing catastrophic events.
Industry analysts believe that this move may set a precedent in the specialty insurance sector, inspiring similar consolidation activities. The implications for market dynamics are significant, as Ryan Specialty enhances its capacity to offer tailored solutions for a diverse array of clients.
About Ryan Specialty
Founded in 2010, Ryan Specialty provides innovative specialty products and solutions tailored for insurance brokers, agents, and carriers. Acting as both a wholesale broker and managing underwriter, it offers services across distribution, underwriting, and risk management. The company is dedicated to fostering a culture of innovation, focusing on delivering exceptional insurance solutions.
About FM
FM, established nearly two centuries ago, is noted for its dedication to property risk management. With a strong emphasis on helping policyholders manage risks effectively, FM collaborates with many Fortune 500 companies to ensure they understand and mitigate the hazards that could impact their business continuity.
About Velocity Risk Underwriters
Velocity is committed to providing tailored specialty insurance coverage for complex commercial exposures. As a tech-enabled managing general agent, it aims to revolutionize the risk management landscape through industry-leading service and innovative solutions. With a dedicated team, Velocity is poised to continue its growth trajectory in collaboration with Ryan Specialty.
Frequently Asked Questions
What is the purpose of the acquisition between Ryan Specialty and Velocity?
The acquisition aims to enhance Ryan Specialty's capability to provide comprehensive insurance solutions for properties facing catastrophic risks.
When is the expected closing date for this acquisition?
The acquisition is anticipated to close by early 2025, pending regulatory approval.
How does this acquisition benefit Velocity's clients?
Velocity's clients can expect improved access to markets and resources, leading to better service and enhanced protection against risks.
What role does FM play in this acquisition?
FM will acquire Velocity's E&S carrier, Velocity Specialty Insurance Company, to further strengthen its service offerings.
How does Ryan Specialty maintain its innovative culture?
Ryan Specialty's commitment to innovation is reflected in its dedication to exceptional service and the integration of new technologies in its operations.
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