Ryan Specialty Holdings, Inc. Class A

Good afternoon, and thank you for joining us today for Ryan Specialty Holdings' first quarter 2023 earnings conference call. In addition to this call, the company filed a press release with the SEC earlier this afternoon, which has also been posted to its website at ryanspecialty.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements. Investors should not place undue reliance on any forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today. Listeners are encouraged to review the more detailed discussion of these risk factors contained in the company's filings with the SEC. The company assumes no duty to update such forward-looking statements in the future, except as required by law. Additionally, certain non-GAAP financial measures will be discussed on this call and should not be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most closely comparable measures prepared in accordance with GAAP are included in the earnings release, which is filed with the SEC and available on the company's website. With that, I'd now like to turn the call over to founder, chairman, and chief executive officer of Ryan Specialty,

Good afternoon, and thank you for joining us to discuss our first quarter results. With me on today's call is our president, Tim Turner, our CFO, Jeremiah Bickham, our CEO of Underwriting Managers, Miles Wooler, along with Noah Angeletti and Nick Messick from Investor Relations. First quarter represents a great start to the year. We grew total revenue 18.3%, led by organic growth of 12.9%. building on 20.1% organic growth in the first quarter of 2022. We also achieved double-digit growth in adjusted EBITDA and adjusted net income on a year-over-year basis. In the first quarter, we saw broad-based strength in many lines of business, including continued growth in property. The specific headwinds we noted on our prior calls were in line with our expectations and offset some of our property tailwinds. We anticipate that these headwinds will persist into at least the second quarter. Overall, I'm very pleased with our performance, especially when viewed in the context of the volatile macroeconomic environment. Despite headlines in the banking sector, persistent inflation, and heightened macroeconomic uncertainty, we believe our firm will continue to perform well through this economic cycle. Our products are largely compulsory, and as risks become ever more complex, we are uniquely positioned to provide our clients with the experience, expertise, and innovation they require to seamlessly manage their insurance needs. Growth in the E&S marketplace continues to outpace the overall P&C insurance market, and is providing solutions that would not otherwise be attainable for hard-to-place risk. Given today's macroeconomic and broader insurance challenges, the E&S market is resilient, nimble, and offers Ryan Specialty a tremendous opportunity for growth. Specific to Ryan Specialty, our specialized and industry-leading broker teams navigated the complexities of the market, including each of the micro-cycles within the hundreds of lines that comprise commercial insurance, providing solutions that are uniquely tailored to our clients' needs. Our delegated authority specialties in binding and underwriting management continue to generate underwriting profit on behalf of our trading partners and deliver strong top-line growth. Through widespread marketing exercises and strong relationships with our carrier trading partners, our experts find coverage for hard-to-place risks by crafting and weaving together large towers of capacity for our clients. This is particularly valued by our clients in the challenging insurance market. We have also expanded our ability to serve brokers, agents, and carriers through innovation and the creation of alternatives to traditional insurance placements. This is especially meaningful in areas like cat property and transportation. We continue to serve our clients and trading partners with distinction. thanks to the exceptional team we've assembled since our founding, and we take great pride in developing the next generation of teammates and leaders. We continue to make targeted investments during the quarter, adding underwriters and brokers to further deepen our current capabilities and develop areas we anticipate our clients will need in the future. With that end, we've seamlessly picked up from where we left off in 2022, when we onboarded the largest production class in our history. These investments, particularly in the recruitment of new colleagues, offer the greatest returns for our shareholders and are part of a proven winning formula to maintain our long-term growth prospects. On the M&A front, our pipeline remains robust, including opportunities that would bring foundational capabilities and wholesale employee benefits. As a reminder, we closed the highly strategic acquisition, Griffin Underwriting Services, at the beginning of the year, and it is contributing to both our binding authority and brokerage specialties. We remain disciplined in our pursuit of acquisitions, particularly in the current environment, as we will only move forward when all of our criteria are met. Every acquisition must be a strong cultural fit, strategic and accretive, as is evident by our consistently strong performance. We do not require acquisitions to achieve our growth targets in any given period. Looking ahead, I remain confident that 2023 will be another strong year for our firm. We are well positioned to capture the broader ENS tailwinds while capitalizing on our specific areas of accelerated growth. Our flexible business model continues to enable us to quickly adapt and pivot to ever-changing market conditions. I'm proud of our entire team for staying focused and delivering outstanding results for our clients, trading partners, and shareholders. Our differentiated business model continues to stand apart from the competition and sets us up to continue delivering significant value for years to come. Now I'm pleased to turn it over to Tim. Tim.

Thank you very much, Pat. We had a strong start to 2023 across our specialties, and our entire team remains determined to maintain that momentum throughout the year. Ongoing industry trends such as social inflation, climate change, and older mass tort claims combined with economic inflation are driving more risks into the ENS marketplace, which offers significantly more freedom of rate and form. we remain well-positioned to continue successfully executing our playbook. Diving into our specialties, our wholesale brokerage specialty achieved another quarter of strong growth, balanced across most lines of business. In property, we are seeing multiple forces at play, including recent years' elevated loss activity for both attritional and secondary perils, inflation driving higher costs of materials and labor, higher reinsurance pricing, and diminished capital levels. This has led to a historically hard market, which continued into April with significant rate increases. We expect the hard property market to continue as the effects of reinsurers de-risking their portfolios at January 1 and April 1 reinsurance renewals are felt. and as insurers approach a continued challenging renewal at 6.1 and 7.1. These factors are driving the flow of new business into the non-admitted market, and our industry-leading team of experts allow us to fill that need with innovative insurance solutions. We believe property will continue to be a strong driver of growth in 2023. Our transportation practice had another strong quarter and continues to see substantial flow fueled by social inflation and carrier need for continued rate increases. We continue to win our fair share of business and remain well positioned to capitalize on additional growth opportunities. In our casualty practice, we are seeing higher loss trends, inflation, and reserving issues that are driving more flow into the E&S channel, particularly in lines like healthcare, sports and entertainment, higher education, habitational, and real estate. Regarding the recent events in the banking sector, to date, we have seen only a modest impact on D&O focused on the banking sector. While losses may end up being material to the market, at this time, we do not see a systemic risk for D&O insurers or any signs the market is materially hardening. However, there remains some uncertainty about further banking failures, and we are closely monitoring the market as the risks evolve. But especially in times of uncertainty, our producers add value and deliver the best solutions to our clients. We believe wholesale brokerage is well positioned to grow consistently in the coming months and years. In our binding authority specialty, we saw another quarter of solid growth in traditional binding, which includes smaller commercial businesses, somewhat limited by capacity constraints and personal lines. We continue to see further potential for panel consolidation as a long and steady growth opportunity, and we are well positioned to execute. Our underwriting management specialty continued to post strong results, led by steady and profitable growth in property and casualty, and our reinsurance MGU, Ryan Rhee. As Pat noted, the specific headwinds in certain lines in the first quarter were in line with our expectations. Specifically, we saw a rapid rate decline in public company D&O, lower external M&A and IPO volumes in transactional liability, and delayed project-based starts in construction. Pricing in the ENS market largely held firm or is accelerating in many lines of business, with property continuing to see the most rate momentum. Exceptions are public company D&O, where we saw further rate pressure, and cyber, which is now seeing modest rate declines. As with all cycles, as pricing continues to increase and certain lines are perceived to reach pricing adequacy, we see admitted markets step back in on certain placements, particularly within large towers. But overall, the standard market carrier competition has yet to meaningfully impact rate or flow in the aggregate. As we frequently noted, we expect the flow of business into the non-admitted market to continue to be a significant driver of Ryan Specialty's growth, more so than rate. With that, I will now turn the call over to our Chief Financial Officer, Jeremiah Bickham, who will give you more detail on the financial results of our first quarter. Thank you.