Ryan Specialty Group Holdings Inc. reported a 16.8% increase in third-quarter revenue to $412 million, driven by a strong excess and surplus lines market, with the exception of more competitive directors and officers liability rates.
The Chicago-based wholesaler and underwriting manager posted 13.7% organic revenue growth, which compared with 28.9% in the prior-year period.
Net income increased to $29.3 million, which compares with a $32.6 million net loss in the prior-year period that was due to changes related to its July 2021 initial public offering and its All Risks acquisition, which was completed in September 2020.
While Ryan saw rates firming in many lines, “one notable exception was public company D&O where we saw a rapid rate decline in the quarter,” which was anticipated, said Patrick G. Ryan, RSG’s chairman and CEO.
“After years of rate hardening, new capacity entered the market leading to additional supply and a decrease in rates” at a time when initial public offering activity is down significantly, Mr. Ryan said.
He said other headwinds in the quarter that will likely continue into next year include a slowdown in the flow of business into the E&S lines sector, and a faster-than-anticipated economic deceleration.
That deceleration, coupled with significantly higher interest rates, is leading to delays in certain project-based construction policies and in merger and acquisition transactional liability policies, he said.
Mr. Ryan said, however, the outlook for the company remains strong.