Chicago-based Ryan Specialty Holdings Inc., an international specialty insurance intermediary, announced Aug. 1 it signed a definitive agreement to acquire Jacksonville-based US Assure Insurance Services of Florida Inc.
Ryan Specialty said in a Securities and Exchange Commission filing it is buying Assure for $1.075 billion in cash and up to $400 million in additional payments based on meeting certain performance targets during a three-year period following the acquisition.
The closing is subject to the satisfaction or waiver of customary closing conditions. The filing said the parties currently expect the acquisition to close during the third quarter of 2024.
Upon consummation of the US Assure Acquisition, US Assure will be a wholly owned direct subsidiary of Ryan Specialty.
US Assure specializes in builder’s risk insurance.
Specialized builder’s risk insurance, also known as course of construction insurance, is a type of insurance that helps protect buildings under construction.
The acquisition is expected to close during the third quarter of 2024, subject to customary closing conditions, according to a Ryan news release announcing the agreement.
Ryan Specialty said in the news release that US Assure will become a part of Ryan Specialty’s Underwriting Managers Specialty.
“Having been an independent program for over 47 years, choosing the right partner was paramount for us,” said US Assure CEO Ty Petway in the release.
“Ryan Specialty’s values and emphasis on profitable underwriting align with the US Assure way. Being a part of the RSUM platform, with its extensive distribution relationships and technical expertise, will enable our team to continue to grow and expand,” Petway said.
About Ryan Specialty
Ryan Specialty, formed in 2010, said that US Assure, established in 1977, is in the small- to middle-market segment of the builder’s risk insurance market, with a diversified portfolio throughout the United States and relationships with more than 20,000 active agents.
“US Assure’s underwriting is enhanced by a sophisticated and robust proprietary technology platform that provides ease of access to insurance brokers and expedites the underwriting and policy issuance process,” the release said.
US Assure issues market insurance coverage on behalf of Zurich American Insurance Co.
“US Assure is one of our industry’s oldest and highest quality programs, and has developed an outstanding business in a difficult class. Specializing in builder’s risk, US Assure underwrites a diversified portfolio of residential, commercial, and remodeling projects in non-urban locations as well as large metropolitan areas,” said Ryan Specialty founder, Chairman and CEO Patrick G. Ryan in the release.
“Ty Petway and his team have consistently produced profitable business on behalf of their carrier trading partner. We look forward to including US Assure in the Ryan Specialty family,” Ryan said in the release.
“US Assure will provide a strong foothold for RSUM in this space and further balance our product offerings,” said RSUM President and CEO Miles Wuller.
“The United States still faces a material shortfall in available housing units. We see long term secular growth opportunities for residential construction, as well as renovation and small commercial projects, that will fuel an expanded need for builder’s risk insurance,” he said.
‘The perfect fit’
Wuller said Petway, President Alan Ferguson, CFO Selena Breedlove and their team “are the perfect fit for Ryan Specialty to enter this crucial segment.”
The release said Zurich will remain the builder’s risk carrier, providing the same program capacity and underwriting guidelines.
Producers can continue to quote and issue policies at usassure.com.
“And the same great staff of experts will be there to service and underwrite customer accounts from Jacksonville, FL,” the release said.
New York City-based Dowling Hales served as exclusive financial adviser to US Assure. Ardea Partners, also in New York City, served as exclusive financial adviser to Ryan Specialty.
Ty Petway is Thomas F. Petway IV.
State corporate records show that US Assure previously was known as Zurich Insurance Brokerage Services of Florida Inc., whose directors and leadership included Petway’s father, Thomas F. Petway III, known as Tom Petway.
In January 2012, Tom Petway turned over the chairmanship of the company to Ty Petway and the name changed from Zurich to US Assure.
Tom Petway and his partners started the company in 1977 as Home Builders Insurance Services at 2727 Atlantic Blvd. in the St. Nicholas area not far from Downtown. It changed its name to Zurich Insurance Services in 1998 and moved to 5011 Gate Parkway in 1999.
US Assure moved to 8230 Nations Way in Cypress Point Business Park in 2012.
Founding Jaguars partner
Tom Petway also was well known for many other roles, including as a founding partner in the Jacksonville Jaguars, as a chair of the JAX Chamber, as co-chairman and host of the Super Bowl Host Committee for Super Bowl XXXIX in Jacksonville and as the first chairman of the Jacksonville Economic Development Commission.
He also has been active in Republican political circles and was a founder of Prudential Network Realty.
On Jan. 4, 2012, majority owner Wayne Weaver and his business partners sold the Jaguars franchise to Illinois businessman Shad Khan, meaning Petway had retired from two of his main roles – a Jaguars owner and Zurich chairman.
Ty Petway said at the time he had been working with the company since he was a teenager and started on the management track in the late 1990s, becoming CEO in 2005.
BusinessInsurance.com reported the deal is expected to close Sept. 1.
The trade site said the announcement came as Ryan announced a nearly 20% increase in second-quarter revenue.
90% online
It said that about 90% of US Assure’s submissions are handled through its online portal.
“They’re micro premiums; a lot of people would say you can’t make a profit on that size premium,” CEO Patrick Ryan said on a conference call with analysts, according to BusinessInsurance.com.
“The US Assure team several decades ago figured out how to do that and so it’s a very high-value proposition to the contractor,” Ryan said.
BusinessInsurance.com said US Assure expects to report $122.5 million in revenue in 2024.
Ryan Specialty reported $695.4 million in revenue for the second quarter, an 18.8% increase over the same period last year and 14.2% on an organic basis, which excludes the effect of acquisitions and foreign currency fluctuations, the site said.
Among its main divisions, wholesale brokerage reported $444.1 million in revenue, up 16.4%; underwriting management reported $155.5 million, up 27.8%; and binding authorities reported $80.6 million, up 15.6%.
The site said Ryan reported a profit of $118 million, a 40.8% increase over the prior-year quarter.
It said Ryan President Timothy W. Turner said Ryan Specialty continues to see price hikes in the excess and surplus lines market.
“Property continues to see pricing moderation and stabilization after years of large increases, and casualty is seeing price increases accelerating and broadening out across industry classes,” he said.
Turner was recently named Ryan’s successor as CEO, the site said.