The insurance industry offered more familiar terrain. In 2009 he announced the creation of Ryan Specialty to help cover complex or unusual risks that many traditional firms don’t offer policies for, such as losses tied to various types of severe weather driven by climate change or computer hacks.
Social Inflation
Ryan Speciality also helps brokers handle so-called social inflation, or the increasing costs of claims arising from what one insurance company director calls “anti-corporate sentiment.” It refers to everything from expanding definitions of liability to more plaintiff-friendly legal decisions.
“You really need experts who understand how to manage these risks,” Ryan said. The specialty-insurance market “is only about 17% of the commercial market, but it’s a very prominent 17%. And it’s where the growth is.”
Other aspects of his second career are more familiar. Ryan Specialty’s growth strategy is a reprise of his Aon playbook, focused on buying company after company. It’s made about 40 acquisitions, including last year’s purchase of Florida-based insurance specialist All Risks, its largest deal to date.
It’s a strategy driven by Ryan’s focus on what he sees as the industry’s fragmentation. Small and midsize insurance outfits scattered across the country are failing to take advantage of one of the core principles of insurance, which is to broadly distribute risk, he said.
It’s also given him the motivation to keep going.
“I like the fragmentation of the industry,” he said. “That has kept stimulating my entrepreneurial and building motivations.”
This article was provided by Bloomberg News.