Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to Ryan Specialty Group Fourth Quarter 2022 Earnings Call. At this time all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Noah Angeletti, Head of Investor Relations and Treasurer. ahead. go Please

Noah Angeletti

thank Specialty and Earnings joining today us Call. Good Fourth you Quarter Ryan Holdings XXXX and for afternoon, for Full Conference Year

forward-looking In management's been contain should posted press our website questions filed statement. earlier call, may On forward-looking afternoon, and to addition not today's answers ryanspecialty.com. reliance the your call, this also Investors with on remarks place SEC a has which at to this prepared statements. any release undue we to

based assume discussion the cause such in risk are update expectations from beliefs Company's future, no to statements encourage current forward-looking These on and of and We statements materially contained and management's in We risks as factors listeners duty to uncertainties these law. more required differ to by those the to filings detailed today. the are actual subject except discussed that SEC. with review the could results

in non-GAAP discussed be filed non-GAAP on earnings for to information certain financial closely included Additionally, most with measures release, and in presented a in in GAAP. the or considered should substitute financial accordance financial as call this of isolation Reconciliations the will these accordance measures be and are GAAP which the prepared is available SEC with with website. the comparable on measures our Company's not

Ryan. Ryan Pat call the Founder, With Specialty, Chief turn Officer now over to the that, of to like I'd Chairman and Executive

Pat Ryan

results. Good afternoon. Thank you to fourth joining for our us discuss quarter

CEO our Jeremiah today's Joining Bickham; is Turner; and call our Wuller. Underwriting Miles us of CFO, our Tim President, Managers, on

the was Chicago Board XXXX, its will missed invaluable the a XXXX to Lead Specialty's father, who was member of J. the McKenna. in Ryan's by Andy like friend. discuss an Andy take He knew him. humanitarian, business of the we Andrew on topic moment inception our national be corporate on and dear on to and husband, reflect of brother I'd Committee Compensation a passing and voice institution, serving our since Before as governance, icon, Governance Director. philanthropist, all performance,

Ryan and brokers, outstanding XXXX is Ryan our for in results. entire underwriters was evident Specialty year The of an dedication team tireless and our Specialty. the efforts

we full by $X.X of XX.X% achievements generated in in over few XX%. I billion, take on year, and were strong significant margin a some highlight revenue for driven top minutes the XX.X% organic our adjusted of which record of XXXX, firm. growth produced to a want For to EBITDAC of XXXX, noteworthy

production in We which enhanced exceeded for the invested XXXX in a largest class an were Crouse, part both We product and our offerings our Keystone the We year. capabilities history. on Services, through of goals acquisitions strategic growth exceptional which this their onboarding acquisition, to new highly of closed our talent while of and year Griffin team. the Underwriting a X Ryan announce January pleased as of first Specialty integrated

Griffin brokerage binding With our our and specialties. in broadening million Northwest, and the Pacific in our capabilities approximately $XX scope authority offerings revenue, geographic and deepens

is development bench Griffin's and Ryan focus match Specialty. Importantly, of results, and training clear a underwriting talent deep consistent cultural on with

role year another with as to pleased our producers, of to XX% Specialty's of culture, winning Ryan consistent a enhancing our Further I'm partner central Continuing retailers. report a retention our trading XXXX.

fourth XX.X%, the organic grew For total growth. quarter, XX.X% by led revenue

solid adjusted adjusted net our income. generated grew another also EBITDAC We and of quarter

which late property half quarter. the modest were we our said, manifest strength see the our prior drove for into headwinds the these QX, in on line noted the the we specific were of that expectations pleased call, We outperformance least in expectations. first our will at headwinds, very That XXXX. the In to quarter, fourth versus persist with in itself anticipate

Specialty. things we through As there progress from three Ryan are you expect we XXXX, believe can

continued see growth business. we the solid in First,

a Although heightened market will uncertainty, the industry. we result, to of to And believe be a risk continues within there continue the as E&S the is standout macro complexity increase. insurance

We us to tailwinds on accelerated the expect capitalizing E&S portfolio while our growth capture will enabling of and of solutions, across specific areas broader our be growth. balanced diverse products

business We expect M&A. to grow our through

Our and larger robust, remains opportunities. platform pipeline both tuck-ins in some

We M&A highest focus benefits. on to the specialty opportunities distributors wholesale, and delegated continue with including quality authority

our innovation. addressable our look We will arranging market to our expanding our our and also of capital alternative strategy, building grow clients, through business alternative support to on risk culture

in Second, our invest we business. will continue to

our Ryan well We build underwriting targeted year in broking adding hiring, continuing program needed top of another both as University. as at Specialty industry talent expect the most internship to and or

delegated also make enhance and will and technology our We actuarial systems teams. control the management authority additional risk further our including investment loss specialties, in to

we over face. the innovation initiatives a Accelerate drive our that increase on of most Accelerate and long our way enable challenges third, in sustainable innovate that efficiently new restructuring to provide more in and of continued us together to improved are our launch will execute assets making the natural to improvements productivity complex that will progression program solutions rapidly And XXXX Today, investments platform. we and people this changes a and our that term. program, allows the announcing brings is strategy clients to strategic XXXX, and we're growth, Through two-year effective operating scalability of deliver a QX. the continue

a provide special in anticipate remarks, of but cumulative we million more his will Jeremiah XXXX. through approximately details charge $XX

and growth of continue We platform enhance hiring decisions our XXXX savings now both investment we on based our $XX in program including to beyond. disciplined million designed ability make deliver on approximately capital and and Accelerate basis, M&A in expect scale and with a XXXX in future. is the to further return years in will the annual will our strategy, the concert

strong for forward, will confident Looking XXXX that I'm be another our firm. year

and growth and expect us market to allows have adapt model a We changing to conditions. quickly flexible business that pivot sustained

continued to As outpace the has are market across complex, industries we've noted market. previously, insurance E&S becoming and overall more risks P&C only the

partners clients our us with our products other and anticipate the we Our growth provide double-digit bring and long trading unparalleled generating the secular for our growth over expertise insurers. the we solutions term. tirelessly as and should work to organic drivers, allow right are along larger This, to compulsory needs continue value our

I'm for clients, very our and to trusted XXX exceptional and team service, model have of summary, challenging results trading be and validated we the all of substantially top and to again proud outstanding retailers. our differentiated Through in a shareholders a partner our partners environment. innovation In delivering entire for continue market business macro insurance customer once

Now, I'll turn it over Tim? Tim. to

Tim Turner

the a It our and our Thank quarter across another you was These testament our firm, across to from teamwork and the their solid to year teams. much, underwriters specialties. producers Pat. results very are

As these to continued to our Pat and trends. grow industry, capitalized noted, on in the specialties. importance into we Diving industry insurance E&S market the

rates specialty historically Our to another as hard continues market of capacity experience Property significantly Brokerage Wholesale tightened. solid quarter growth achieved business. a across and of spread lines rose many

market, We Property's remain looking are encouraged large volume potential ahead. seeing by the of a and new we into flow very non-admitted business

recurring increasing process As as previously, our major events experience demand for to fill such Hurricane well higher renewal a rates. and is solutions producing expertise as that noted less climate This and capacity even tougher we've as to reinsurance well opportunity for insurance as and events a storms need. led Ian, as have winter other

and the fourth quarter year. Cyber performed well for the in

rate pursue ample for see we While increases, believe there to us to of trends. short-term a in is runway we moderation regardless continue pricing

technical is significant to in ability large a capacity like for role in clients. areas Our towers expertise cyber our playing of build our

inflation, and by social particularly continues see substantial to practice, ensure in trucking, for fueled need flow transportation Our increases. continued rate a

traditional for to economically Binding which remain that small continue We business commercial in capitalize we historically Authority XXXX quarter In to solid positioned includes business growth of has win new opportunities. saw growth additional on well and another been sensitive. specialty, binding, our

growth capacity Binding our partially by This experiencing still to was personal constraints which was renewals. prior offset Authority, lines

long the opportunity, see potential steady growth as panel to positioned consolidation to continue for a well are we execute. and We and

healthcare Ryan in our Our reinsurance transactional underwriting property specialty despite management lower by volume. M&A quarter driven Re, strong another casualty, and lines, and MGU, liability headwinds by our posted led

company quarter, specific project-based raised in the with line construction our IPO in in fourth lines volumes expectations. rapid prior we the delayed and and public headwinds our starts liability lower M&A call in noted, in certain were D&O, transactional Pat are rate and decline As on external

these we have headwinds that into remain at right long in anticipate term. the will that persist the We least to confident We XXXX. grow first place of over teams the half lines these

pricing in most In terms remained ongoing business of in with D&O and being classes the observation market, February the firm into of public is our January company exception. E&S that has

carrier aggregate. flow meaningfully standard observed the market which earning impact calls, addition, and flagged prior or In periphery we on the the in we has yet to on rate competition

more Ryan the into business significant we've previously, continue so said flow be of to of we growth, to than driver a the expect rate. market As non-admitted Specialty's

now that, Chief I you more of Officer, you. Jeremiah our With financial detail fourth turn results the will who Financial our call Thank to quarter. the Bickham, will over on give

Jeremiah Bickham

strength by Thank much to of you, organic continuing the tailwinds revenue solid ongoing QX, of fueled reflecting Tim. we another XX.X%, total and million, growth In E&S XX.X% versus the last the business. December, new which weeks We our see to two the for modest pleased amount specifically substantial expectations in late a outperformance in the were drove of in QX, $XXX quarter win grew revenue period-over-period to of at quarter. market property in

for million fourth or the diluted per basis for share. which $X.XX share. X% excludes points other QX items, EBITDAC IPO-related Adjusted net for adjusted $XX while million, declined Net diluted unusual quarter, million to quarter EBITDAC income grew was XXX to period-over-period, Adjusted XX.X%. income $XXX margin 'XX and per or $X.XX $XX was the

impacted EBITDAC T&E normalized to was higher income. the to partially investment continuing adjusted which business fiduciary in by offset Our continued margin and by return levels, was investments

to grow top talent we expect we of bringing XXXX, opportunities see lines and aboard in broking clear wherever to noted, Pat As business. continue underwriting

at We a the ahead. talent in also Ryan of new expect Specialty significant to recruit months class

Accelerate improves and unlocks for in earlier addition, release embarking operates how our earlier additional our shareholders. Ryan our value XXXX and which are our program, remarks, efficiency In in noted we we Specialty on today strengthen further and and Pat's will clients as

revenue four doubled, approximately and of years our that Specialty than XXXX more up million while by has program all will has Over XX%. the charges result on prepare over believe grown U.S. thoughtfully for through have is success right in head designed is the and last a building XX%, continue $XX the market XXXX. cumulative count time this cycle Accelerate alone, E&S We will our to the of next growth. Ryan

current income approximately approximately of we $XXX on facilitate which we to our million it net is of our GAAP savings million turn, generate and XXXX expect operating on leverage in expense, in expect forecast, of interest interest XXXX. funds In greater annual Based thereafter. $XX record operating to even

As Pat and long-term our excited Tim mentioned, we opportunities very about value remain and growth proposition.

full year the will to be that guiding are XX%. to first headwinds of to we half XX% XXXX organic We the As half believe in we areas, expect continued revenue in result, certain a ease of the growth back between XXXX pressure but year. see

addition, year XX.X% In EBITDAC margin the XXXX for are full we guiding and to XX.X%. between be adjusted

of well growth, XXXX. in continue as in increases challenges, marketplace. offer investing fiduciary of will meet of year, demands talent the teams investment particularly highest a as and from offset perspective, the build the partially to the the aggressively continue investments, in we for the These will margin shareholders, returns opportunities out We during colleagues, our by head which new XXXX during count our recruit annualization be our and and recruitment to income

clients and with our time us The we and path before. where well challenges business model pleased positions were performance and relevant present overall more diversified and In XXXX, insurance than to remain both very cycles in economic very best the ahead. our excited opportunities, in and flexible summary, current a our for are we serve we ever

you to With up for and Q&A. call for your like that, Operator? we open time, the we'd thank

Operator

of today is Greenspan Wells Fargo. [Operator Instructions] first question The Elyse from

Elyse Greenspan

you persist the first the was the last expect 'XX. for two and get My like throughout XX.X%. it only but you QX the them about And, better and benefit right, rates, guys the perhaps of saw and right, headwinds right, benefit, get first organic weeks, in sounds then that saw sounds it like, to quarter, property you spoke you half, that question, like you

guess, I than the wouldn't that's 'XX, a better fourth show level baseline that of growth So expectation be quarters all the quarter? should

Jeremiah Bickham

because best for we basis, is and organic growth our Elyse, can't to think quarter-to-quarter infer everyone, on you guide want that trend. year, at an it range the we remind again, to often look annual not so a

it's his our correct. The prepared HX. as expected. pickup they'll headwinds -- remarks, from all played net on to property many to we and and at in You with did in us out a just least will that we general but continue belief a of in lift referenced annual are us about just as QX affected to said of variables uncertainty. And through Tim basis, QX they'll then in we continue get QX, an expect how macro late there's it that be given early in along XXXX, benefit much it's that tell too still a provide so We play,

tough tailwinds the that us clients Tim our the the and market provide moment. got is property be should value QX. can do comps But net we've back, in a step color -- I extremely we forget, intact for in proposition very on and the to overall. mean, don't our of market And all the And positive know headwinds more much at specifically. is E&S taking what QX that

Elyse Greenspan

is quarter throughout book a would property revenue be with quarters Or four the do have another? the your variation? And in property then versus concentration you some slight even one greater from with

Tim Turner

do. strongest underwriting to side that. broking and We're expect that is buying We to the for capitalize well increase, month-to-month, that. It's we the the we'll continue the increased second on and very recorded that wind quarter has quarter-to-quarter and well positioned of the on business season, flow

Elyse Greenspan

-- And of provide just a think sooner just of it you pipeline. you're an some Or M&A an little just lastly, do do And you later? a on might guys have you sense today, bit timing looking deals active then deals pointed transactions? you to we color sounds what it than like Can of types see at? looks active as

Pat Ryan

a market. to companies an that We did to and -- come is is pipeline. it's -- are And that robust convinced it There market. that in we there mentioned there there are I pipeline, is, to companies mention trying interesting are coming many

we've to I them you make a make we think, great look had, track that. better, to good know, And record really at companies successful Elyse, As for them companies.

are over So there least in we've that the is pipeline And with people weren't been speaking months last they at referencing -- XX that cases. I'm many ready. the

they're Others good ready, we're still pretty quite but and seem close, discussions. are getting not be Some closer. getting to having

to XXXX in To I the in at companies time here would point starting discussions tell we're certainly of when be ways that sum say where these. we we're in our bringing We be them. year, can't of have strategy during prospects closing we'll high-quality good few in broadest the confidence a able a but up, you that deep with it that really the in overall that fit for

Operator

Mike The of next Zaremski BMO question Capital is from Markets.

Mike Zaremski

hoping more On you is was the initiative, the buckets. distinct whether some efficiency cost towards can just color I program give weighted

Some real and collapsing you'd back like program just And just anything clarification. Is about of some as and well, talked offices have out? less the there on call peers estate. outsourcing your cost to

coming is guidance, of exclusive margin charges two over inclusive the Just that or the the years?

Pat Ryan

ability to it Mike. over are and improve always thanks, turn ourselves out We're our clients. challenging start just to initiatives. serve strategic to proactive These Well, I'll Jeremiah. our

of those of exceptional for believe what excellence can a to better wave frankly up? prepare next great us. you clients we ahead pick and taking want level so So growth the to of platform next serve operating Jeremiah, believe we we is we're do the

Jeremiah Bickham

Thank you, Yes. Pat.

over ops and technology about. those the and savings buckets Mike, that filed know today, the And it's to going you'll lead vast I press. the will the sustainable charge time. see we to out from off savings we're that action of So list actions, in the really the and improvements are do all think areas. come hot productivity we those X-K of But the majority We excited investments which optimization,

ourselves we're And further help come vendors should give and accelerating I'll and platforms competitors. from serve differentiate our innovate back-office then note from and you think service analytics, help our streamlining some shared distinction our also model. we expect us that technology consolidating just with upgrading that of us automation, where efficiencies will consolidating that mid- our drive and processes, investments the data And to examples faster, clients in we to more expanding and

So this kick off. we're program very excited to

Mike Zaremski

charges, is for of year And The that, the exclusive next a guidance clarification. margin just correct?

Jeremiah Bickham

Correct. Correct.

Mike Zaremski

And a And touched question, Elyse's think prepared just is Okay. guys of given follow-up, into the in strong in XQ. half and in was remarks, continuing headwinds very And Tim, as on very it you you latter half that are the into -- the property I of mentioned some clear about first 'XX. year. the the of

the a expected persisted first into of that -- curious Just property than year. if part the bit better strong has tailwind

Tim Turner

It certainly seeing picking we continue. expanding rate. expect the and rates of to start up, channel growing to entire We're has. It submission increase that conversion flow rapidly. is continues the The and in

are into and Reinsurance be of to more XX, and flowing shedding renewals in standard property XX the expected dumping market for very channel. business see our and treaty difficult CAT we

Mike Zaremski

you're as of in a be be just price you're follow-up, clear, hardening. But seeing acceleration just marketplace property, not may some to though, which saying, pricing the much E&S inclusive seeing

Tim Turner

seeing flow E&S property, Well, in entire of and increases and the the we're and CAT business in casualty but flows. definitely property ebbs

some up have to continue rates education to casualty see deceleration, and in difficult classes certain some and terms habitational, prices we but long-tail classes. we climb those going are So in higher be like -- healthcare, continue moderating, sports entertainment, transportation, price

Operator

is Rob Sachs. of question Cox Goldman from next The

Rob Cox

midpoint is fiduciary double-digit a tailwind and So on looks lower organic you were margin for that the it income. of just the like growth, than guide investment the at XXXX where

really you're here? that there there So the about Is I'm investments you thing is is talent only the other just that's margins offsetting offset making? Or wondering talked investments. what the

Jeremiah Bickham

Rob, scale. just demonstrated set our that table. And to We've the great question. can platform

of where actually is finished And where would are a in XXXX. of ago, if couple margin you we today, we years you in year-end XXX XXXX bit basis. that we So basis schedule a ask since were little any room ahead of of tell a terms we're this up us points to

the years, years years, to very And that in XXXX. said a impact follow we we since a on can rate basis. about show that with to very that you last year, targeting ever, And we through onboard on -- biggest happy all comes most reported and most thing we're what we run upfront And that. and one were not but then class is is did scaling production

investments remarks, And Tim We're have of ROI as can hires this make. highest making we going strategic in said his these the to also, production continue any investment year.

So for growth right prospects. know decision our that the we long-term it's

we so plan. to about really feel sticking And good game this

Further, touched Pat both also I a Accelerate XXXX, thereafter. margin our the by that have program bring change and step scaling enhanced unlock now, on will it XXXX, and to annual will

step believe taking continue So making about that that the term. enable we right for we really another the in where are margin, will and to long of today line back, investments growth top and good feel terms we we're margin growth

Rob Cox

on organic talk on the the management you next, consolidated could businesses just and guide? have side And of the guide feel could think underwriting businesses backing that. relative about capital how how Appreciate perform you the to And the have, about you you you maybe business? three different the the

Pat Ryan

Miles, why capital? don't take you the

Miles Wuller

Yes.

shared by incremental underwriting carrier capacity help string to a support not We're current delivering to we've lines. -- great capital. profit community constrained well is growth them our new products, to supported I are partners think that allowing meetings of -- we've our that's the in and past by got

your pleased we're to some the incremental what share the of capacity into our reflective maybe platform. the to question, and great to is, coming going again, of continued we're year then with growth is across And property results capability, heart prompt

we that believe to build ongoing a capacity to source as growth. new existing and continue of add facilities we So

Pat Ryan

and to delegated up we to strong first on expect very in the take experienced of believe the Miles significant underwriting. open underwriting, market question. have We will I'll growth. to the we managing continue following authority every experience growth have that very, brokerage I've part wholesale said, organic what reason --

vertical, our there. look we growth, and growth they've had good said, significant organic and organic we As we've Risk forward started a to Alternative

we forecast know, than normal you the not are it will normal higher been benefit higher haven't launching the on the working the numbers of as margins And the in strategy, executed in execute the the yet. a with because benefit on be These But industry growth we when we've industry. than rate strategy. in

Operator

Weston The next of UBS. question from is Bloomer

Weston Bloomer

in first up? XXXX? we XXXX in question see to when kind or sales should about Is $XX we Or of any start Or sales of charges? million My ramp that? expect you taking that should XXXX, should to in we the the it on after think how come

Jeremiah Bickham

Yes.

the the you So high-level the and I'll path charges saves. on take through

really in, QX QX they this up but So HX. in of you'll ramp and in charges see trickle year,

at the 'XX the then be of end we'll it, half than of So end take latest, million this year the let's by charge the QX or through more call remainder of $XX and in savings 'XX. of which as in XXXX. on $XX we'll then And No 'XX, be end some year the the we go. savings will 'XX, report fiscal million through in realized full

Weston Bloomer

Great. you're is And seeing question around uplift a then property. in the that second my follow-up

the or you're math, point curious guidance? what's roughly it change uplift to like -- impact Just how that's your positive but fair that as Is or XQ. about I know XXX could it around XXX thinking rough well? be in into you're that expecting not in it the could say seems -- XXXX baked was you're to I'm a it it basis

Jeremiah Bickham

to false don't threw There's precision on you into a if out. any you're math And lot just of -- guidance. want the variables our baked I of imply

at guide attributable and XX.X%. it was That range X% X%, barely our So we for beat property. QX was to to mostly

said, it Tim the As hard right is harder. quite now, property get market could

calibrate. expect to much it's basis terms net this benefit. But the a how to points, to contributes that XX% XX% really to that year, that in difficult be -- We of

Weston Bloomer

of for the growth first the year be cadence Like it first single-digit half half, upper half? or in look know there's the to be at second the the quantify the close and comps is versus to or throughout maybe in XQ we range you to on would there year said the any granularity way range half organic year, going then any on a of for mid-single-digit And Great. full XQ but the I the basis, first additional end guidance? helpful. or low should difficult is

Jeremiah Bickham

tougher comps in the in the got HX, are manifest expect key points. worst of our headwinds HX. then and You've we to The

lot well, a to on So read quite basis. that going come only to there's through can a be predict on quarters into. to annual can but challenges an difficult HX, be of annual the reason be think we're there's We we the that guide an -- quarters or to going basis,

stay So solid which on focused think of let's XXXX year we the number, just will organic ultimately really be a growth.

Operator

The next of question Benguigui Barclays. Tracy is from

Tracy Benguigui

A question. quick clarification

of can the property to X/X, book? the it's proportion or that's clarify in overall mentioned think D&O a no overall XX% you like ahead of You call your represents property then more overall product broadly the D&O. including And single I property book E&S market, third the is But something line, a quarter of multiples if your public proportion larger that about to X/X of when and placements piece? becoming

Jeremiah Bickham

publicly of actually a broader So is that market right Tracy, portfolio the to and representative representative XX% we're E&S our said the is we've -- range. XX%

Tracy Benguigui

Okay.

particular you discussed of it a So more view XX% narrow when was a previously product?

Jeremiah Bickham

between scale line D&O. casualty public and about representative since attention D&O the our portfolio versus market, we a single exposure were as property the compare to an an product right, product overall, of trying were our in like property in Tracy, we to the difference entire a giving portfolio world and products in insurance broader When QX were talking our example just of to category that is as of public on we the call, drawing

Tracy Benguigui

Okay.

comments may I that's bit you of thought. So together, that. I wanted what to question. be a bridge a thank this wildcard those for just one two And

an insurance, diligence way? line any process in by of I'm of is MGU? corporate higher you do you're if behalf insurer to Can the on higher costs of E&O the you placing do also wondering meaningful insurance business rates, ensure if rated risk back as due expecting and that's discuss of backed financial your a What on that a and buyer

Jeremiah Bickham

their we're standard a make procedures that whenever that. onboarding counterparties Tracy, We we've they're standards quality industry the new their security our MGU. licensed. got like sure sure things for -- meets of make and that We

part the line in your much What very question? was there. So other of standards with industry

Tracy Benguigui

I of insurance. of rates mean, on financial just I brokers the buy general, lines E&O a lot higher mean, in back

as So if any corporate buyer, meaningful that's in a costs seeing are and you higher way?

Jeremiah Bickham

been to for D&O pretty insurance It's early the went stable talk too since our when of we It's our about certainly, renewals which up any lines, year. significantly then. up later professional public. the Well, in went come

right looks stable. now, So everything

Operator

question next The is [indiscernible] Derek of from KBW.

Unidentified Analyst

on sequential that kind is $X that like should up question Is it of quarter-over-quarter. income. It investment looks first My million stepped about step-up the 'XX? fiduciary we XQ think for

Jeremiah Bickham

For on it cash around flow million. on. investment modeling points, $XXX we what what recommend always basis SOFR, statement. That's term or was broken earn take At that -- to year-end, we we the XX purposes would XX-day and by out what income multiply minus is recommend our fiduciary income is balance, which

Unidentified Analyst

second significantly. upwards year. this is you're costs know But then expenses? are hiring Got sold for next on of it. any comp And I to stake my It equity context if is pretty wondering looks question the private the like in producers. anticipating compensation their And on costs? impact you that has to firm any for create equity on your of comp competitors pressure your incentives one a I'm just

Jeremiah Bickham

But company increased it's now. comp to we revenue. think the So comp variable of are is so and other production majority probably like cost related every costs, fortunately, I our expecting

employee. a the same So wage it example, a affect broker, for salaried does doesn't way wholesale inflation

production it that and of revenue. percentage of is it else, So us related paid we're yet the gotten but everyone of control out like our out dealing for with comp hasn't just as a attribution because of

Unidentified Analyst

anticipate up maybe producers? impact I a follow impacting about kind know to home is talent, great just XXXX. curious your throughout that of Do just And of Okay. on the for that. Ryan retention but obviously you

Tim Turner

a We industry-leading high to to and very all. at retention level brokers and our have underwriters continue of for expect all No change staff.

Operator

The JPMorgan. next Bhullar Jimmy is from question of

Jimmy Bhullar

And with benefits the in has despite my the think you've charge, XXXX, line, it's restructuring margin growth healthy margins. your the than that, the one been on even XXXX had top of where going most in If questions slowdown. guidance below then a your I answered. are we going about fact that fairly costs of are midpoint just the on the above So lower go the were line. got suggesting of to

the So in business or any is the but where fairly -- grow growth you've in margins fee pressure growth leverage a of sort that strong expenses of your wanting that to wondering are surprising I'm the revenues projecting? -- you're if this that lot the variable is to pressure, and and about improving do in it less of I because that being somewhat business, or commission strong growth sort had there's comments like nature not recognize with any

Jeremiah Bickham

I consistent XXXX, is as proven the at end the margin business we've tried end were to upfront of of XXXX. We the Jimmy, What at XX% we're XX% scale. said, model and to be We impact making at about There's long-term keep year. a do differentiated year. investments for in last growth. the it. saw up big right a opportunity this is run made talent our We rate to is thing to at

opportunity the to the planning we this it. have playbook, right Like, opportunity we we an every It we're and be capitalize case outsized to year that XXXX. saw that's want won't that an year on. stick to There's in like

we're scaling. back one is program really -- we're will go I'll about get all, is to XXXX margin many many see but prior step excited in statements, a that going years, not years, what so thing out. we're the for fully built change you And And Accelerate excited once to my

going annual efficiencies to the continual And the much we're rapid. that that going to scaling are more capabilities, gain our make

we have think our model the it we just So when it's opportunity, to makes Jimmy, reinvest scales, in talent. sense the

Jimmy Bhullar

in quarter? certain of in Okay. the continued more late uptick continued And in are comment another sort this the and is your if of then saw that you in activity But recognizing in you able activity quarter that February and on through has uptick a in half quarter. December, to first less January business through well, as certain business booked that's that

Jeremiah Bickham

you are Sorry, uptick Jimmy, activity, say when referring to? in you what

Jimmy Bhullar

December, of you the saw which in to caused you stronger you last you're on previously weeks Or indicated? do just activity better two growth had saying than

Jeremiah Bickham

Right.

property here from that the on ongoing comments yes, we of -- the benefit play the regards in a -- sit today. and seeing property. with to benefited that It's organic, state late touched we're Tim on we're as still surge Yes, Okay. quarterly the

Jimmy Bhullar

in And the worse? the growth that half for the half Or is less first early being or gotten revenues function in it that, your property in else on? than the first -- in quarter something a despite that's first assumption of just less XQ, booking of is

Jeremiah Bickham

is know QX, the We we've got think we just tough to be healthy actually annual know so which But rate, a we important it's is statement about, that a headwinds do be on HX growth haven't focus to to to There's HX. that made to the relative any thing going comps. of XX% growth XX%. we about challenging to going very the

Operator

Autonomous The next Tunis Ryan question of from is Research.

Ryan Tunis

I business curious coming up some a issues like just year comp to thinking organic explicitly XXXX and evolve guess, was the net if construction D&O, contemplated property. which project-related through you are about how making also might might the what I it from like benefit market and the guide, XX% be other on XX%? being and growth sounds to conditions assumptions But just

Jeremiah Bickham

extensively any as related in that there's Tim admitted business the E&S ebbs market. about to the be that. of the year, and firming lines D&O market that are and going flows talked moves So between direction pluses and still lines going minuses, an other rapidly. there's referenced and to example There's public given are with We've that

all factoring we're in. So of that

have, And basis a their bottom-up of we other improve opportunities is 'XX it we sum book. with the result. do broker-by-broker, we we what together, fortunately, positive And intelligence that the build really on an do MGU-by-MGU, put it is and but it of we is. annual all what a any we anticipate is market-based person-by-person, all to be challenges for what And

Ryan Tunis

thing. annual could amount a how usually And with to then, from construction I much P&C being recurring. I Got wondering transaction type lot if another D&O question it. it's of you book that project-based? of an like, think tend that quantify, outsized of world, about the your project-based come like, brokers, was like whether the I businesses an of curious, maybe But to had guess, I was is I commissions your there is -- M&A was we or guess tied

Jeremiah Bickham

business. but is the specific percentage, of type it most disclose don't we So recurring

In commercial. that fact, And the most E&S. compulsory. importantly, behalf we is disclosed majority publicly work, We've of nearly XX% all clients our that on underwrite it is over we're the products of place we of or

Ryan Tunis

well just question it. of in year. the last Got said property couple the last weeks performed is sorry, -- on -- And of you then my

there pretty at fourth take distributed timing renewals they Just the that percentage in XQ? Or standpoint quarter? a of place of are from are an that end outsized the through property quarter, uniformly

Tim Turner

the they buying impact the channel. into have new in quarter known to peak CAT earlier, said well of XX reinsurance go to second XX a the will No, treaty and into actually. year. renewals further the I flow as property wind as season continue business our But The hardening is increase on of we

and expect we So we're expand, to it absorb set and perfectly it and grow to up convert to it. continue

market the going in So definitely get property. harder is to

Ryan Tunis

me my some that weeks. was wasn't couple that question. renewals there in if were December those renewals if standard outsized the an let pushed because property know to more of place quarter were taking sure didn't the of in last got Sorry, that just of late I market fourth challenging. there maybe up I percentage were becoming just just in ended clarify

Tim Turner

rate increases. increases measure, but premium definitely to No, nothing and

Operator

Ryan to remarks. There Pat turn additional like closing for time. this are questions call the back at no to I'd

Pat Ryan

thank for in Well, company. you your all your our and participation interest

think with and got serving year team. We optimism. the We've very we're marketplace unwavering As ahead, strong, drive, a impact I really drive. look great our expertise in to commitment world-class deep clients. The the filled strong is to

success we'll we're in to XXXX. So that growth drive and confident continue this year of

So very good thanks good evening. for and your Have participation a your questions.

Operator

conference. today's concludes This

You participation. at time. Thank for you may this your your lines disconnect

Ryan Specialty (RYAN) 28 Feb 232022 Q4 Earnings call transcript