30 October 2024

Ryan Specialty is in final discussions to buy London-based MGU incubator platform Innovisk Capital Partners from investors that include funds managed by private equity firms BHMS Investments and Abry Partners in the latest example of strong demand from strategic buyers for assets in the sector.

It would also be the latest in a string of acquisitions by the wholesale broking and underwriting giant, with a strong emphasis on adding to its delegated authority business in the US and internationally.

In a statement confirming the news, the buyer said Innovisk would become part of Ryan Specialty Underwriting Managers, with the acquisition expected to close next month.

Insurance Advisory Partners is serving as exclusive adviser to Ryan Specialty, with Ardea Partners exclusive financial advisor to Innovisk.

Innovisk was established in 2017 by former Willis Re and RK Carvill executive David Thomas and seeds, develops and grows MGAs that operate in niche areas of specialty commercial lines.

The platform currently operates around 15 programs across seven MGAs split between the UK and Europe and the US, with backing from a panel of 35-plus A rated carriers.

The firm generated around $58mn of revenue for the 12 months ended 31 July 2024.

Commenting on the potential deal, Ryan Specialty CEO Tim Turner said: “We have tremendous respect for Innovisk. Their outstanding management team has demonstrated a differentiated value proposition to brokers, agents and carriers, and their underwriting talent is among the best in the industry.

“At Ryan Specialty, we see new product innovation and diversification as essential components of the value that we bring to our clients and trading partners. Innovisk clearly shares this view and has made the critical investments to be able to not only launch new products but bring those products to market quickly.”

RSUM chairman and CEO Miles Wuller said the firm was already very familiar with the Innovisk MGUs.

“This highly talented team has distinguished themselves with exceptional underwriting, distribution, operational efficiency and approach to the small to middle market segment. Further, Innovisk’s data-driven underwriting focus and technology built in-house has resulted in attractive loss ratios and deep carrier relationships.

“We believe we have a unique opportunity to accelerate the remarkable growth trajectories of both Innovisk and Ryan Specialty by bringing the two firms together,” he continued.

Innovisk CEO Thomas added that Ryan Specialty has the right leadership and platform to accelerate the growth of the firm he runs and offer significant ongoing opportunity to its employees.

“With the shared mission to innovate where there is need and service clients and trading partners at the highest level, the addition of our team to RSUM will be smooth and empowering for our teammates. We have watched Ryan Specialty grow and earn the reputation as a specialty insurance leader, and we couldn’t be more excited to join this widely respected firm,” he added.

In 2021, WTW sold its majority stake in the MGA incubator to funds managed by BHMS and Abry Partners.

Specialty niches

According to its website, Innovisk invests in and supports a wide range of businesses operating in specialty niche sectors of the insurance market.

Its portfolio in the UK includes property and liability package and professional indemnity MGA Aqueous, Lloyd’s coverholder LeoPanthera, which focuses on financial lines insurance, and worldwide ex-US transactional liabilities specialist Themis.

In the US, it supports Freberg Environmental, D&O/E&O and cyber specialists Celerity Pro, and inland marine underwriter Vindati.

Markets – or risk capital partners as it describes them – include Hamilton, Aegis London, Arch, Newline, Aspen, Chaucer, Argenta, Hiscox, Zurich, Canopius, Allianz, Everest, Lloyd’s, ArgoGlobal, Axa, Tokio Marine, RenRe, WRB Underwriting, QBE and Munich Re.

In June, this publication revealed that the platform had added former Velocity Risk COO Praveen Reddy as its new global president and COO.

At the time, Thomas said: “Innovisk recognized at the outset that at the heart of building high quality MGAs and attracting talent, we needed a deep capability to be effective across the industry value chain, understand our underwriting and distribution performance and communicate will to all partners.”

The founding CEO said that the firm has focused its efforts on establishing an in-house and proprietary technology capability tailored to its underwriting needs, which is enabling it to capture clean data to be analysed by its data and capital management team alongside its MGAs.

The platform has also built significant digital infrastructure to support its broker partners, as it enhances overall efficiencies along with its offshore operations, he added.

Innovisk has a meaningful Indian operation, which drives its data and data management function.

The transaction comes amid what is expected to be greater appetite among sellers of MGAs in the UK because of expected changes to the capital gains tax regime.

Ryan Specialty M&A spree

Ryan Specialty has been the most active buyer of MGAs and other delegated underwriting authority businesses in recent months amid wider signs of strong demand for assets in the space from strategic acquirers.

Wuller said at our Program Manager conference in New York in May that large independent platforms that have invested in delegated authority would be able to “make some noise and make themselves distinct” at a time when a raft of “exceptional” family- and entrepreneur-led MGUs were expected to come to market.

And in the months since, Wuller’s firm has arguably led the way with a series of high-profile acquisitions in the delegated underwriting authority space following its deal to buy UK-based Castel, which closed in May.

In August, it announced its largest deal since All Risks with an agreement to buy builders’ risk specialist program US Assure for $1.075bn up front and up to a further $400mn in contingent consideration.

That was followed by deals announced to buy certain assets of Greenhill Underwriting Insurance Services in the US and Geo Underwriting in Europe, and then in September an agreement to buy Ethos Specialty’s property and casualty business from Ascot.

View this article here: https://www.program-manager.com/news/ryan-specialty-closes-in-on-acquisition-of-mgu-platform-innovisk-capital-partners/ 

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