AM Best Revises Performance Assessment Outlook to Positive for Ryan Specialty Underwriting Managers International Limited and Ryan Specialty Netherlands B.V.
AM Best has revised the outlook to positive from stable and affirmed the Performance Assessment (assessment) of PA-2 (Excellent) of Ryan Specialty Underwriting Managers International Limited (RSUMI) (United Kingdom) and its subsidiary, Ryan Specialty Netherlands B.V. (RSN) (Netherlands).
RSUMI was formerly Castel Underwriting Agencies Limited and the subsidiary was Castel Underwriting Europe B.V., prior to the acquisition of their shareholding by Ryan Specialty Holdings Inc. (NYSE:RYAN) on 1 May 2024.
The assessment reflects RSUMI's excellent underwriting capabilities, excellent governance and internal controls, excellent financial condition, excellent organizational talent and excellent depth and breadth of relationships. The positive outlook reflects AM Best's expectation that as RSUMI continues to grow its operations, its financial condition will further strengthen aided by earnings diversification, favourable cash generation, low reliance on debt and extended financial support from the wider Ryan Specialty group (the group). AM Best also expects RSUMI to enhance its excellent level of governance and internal controls through the group's continued support and oversight.
RSUMI, through its model of investing in and supporting managing general agents (MGA) and underwriting teams (collectively "underwriting cells"), has access to expert and experienced underwriters. Underwriting capabilities further benefit from RSUMI's in-house underwriting staff. Since launching in 2014, RSUMI has demonstrated its ability to grow its underwriting cells whilst providing profitable business to its capacity providers. While RSUMI has divested some of its underwriting cells over the years, it has managed to attract experienced talent and provide connections to capacity providers, which is a supporting factor in the underwriting capabilities component. A partially offsetting factor to this component is the limited track record of some of RSUMI's programmes due to the model of divesting underwriting cells prior to 2019.
RSUMI's governance and internal controls benefit from its scale, relative to many other delegated underwriting authority enterprises (DUAEs) in the market. The company has an appropriate committee structure, designed for the scale and sophistication of its operations, which support the board of directors. The company undergoes external reviews and performs internal reviews regularly, covering underwriting and compliance. RSUMI's governance and internal controls are expected to benefit from the group's support and oversight. The limited integration of systems with (re)insurance partners is considered a partially offsetting factor to the governance and internal controls component, albeit a common theme in the U.K. market.
RSUMI's financial position is supported by its consistently profitable operations since inception. Overall earnings benefit from the broad range of programmes underwritten by the company, reducing dependence on any single counterparty. The acquisitive nature of RSUMI's business model is expected lead to variable financial resource requirements over time; however, AM Best expects this to be funded by the group through capital injections to avoid undue strain on RSUMI's financial condition. RSUMI's ownership by Ryan Specialty is considered a positive to the company's financial condition and provides an avenue for additional financial resources, if required.
RSUMI's senior management team is experienced and has a proven track record in the industry. The company's board of directors brings further experience and oversight. The organisational structure is well-defined with a clear path of reporting duties.
RSUMI offers a range of programmes in its core markets in the United Kingdom and Europe, as well as internationally. The company has relationships with a high number of well-rated capacity providers. A significant portion of RSUMI's processed premium is placed with capacity providers that have supported RSUMI for at least five years.
As a wholly-owned subsidiary, RSN's operations exhibit a number of commonalities with RSUMI. RSN is regarded as strategically and financially important as RSUMI's platform in Europe, providing access to business in the European Economic Area. RSN is integrated with RSUMI and has common underwriting practices, with generally consistent underwriting performance expected.
This press release relates to Performance Assessments that have been published on AM Best's website. For all information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the Performance Assessments referenced in this release, please see AM Best's website. For additional information regarding the use and limitations of Performance Assessments, please view Guide to Best's Performance Assessments for Delegated Underwriting Authority Enterprises. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.
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