RYAN SPECIALTY HOLDINGS, INC. (RYAN)

Overview

Founded by Patrick G. Ryan in 2010, we are a service provider of specialty products and solutions for insurance brokers,

agents, and carriers. We provide distribution, underwriting, product development, administration, and risk management

services by acting predominantly as a wholesale broker and a managing underwriter or a program administrator with

delegated authority from insurance carriers. Our mission is to provide industry-leading innovative specialty insurance

solutions for insurance brokers, agents, and carriers.

For retail insurance agents and brokers, we assist in the placement of complex or otherwise hard-to-place risks. For

insurance and reinsurance carriers, we predominantly work with retail and wholesale insurance brokers to source, onboard,

underwrite, and service these same types of risks. A significant majority of the premiums we place are bound in the E&S

market, which includes Lloyd’s of London. There is often significantly more flexibility in terms, conditions, and rates in

the E&S market relative to the Admitted or “standard” insurance market. We believe that the additional freedom to craft

bespoke terms and conditions in the E&S market allows us to best meet the needs of our trading partners, provide unique

solutions, and drive innovation. We believe our success has been achieved by providing best-in-class intellectual capital,

leveraging our trusted and long-standing relationships, and developing differentiated solutions at a scale unmatched by

many of our competitors.

Significant Events and Transactions

Corporate Structure

We are a holding company and our sole material asset is a controlling equity interest in New LLC, which is also a holding

company and its sole material asset is a controlling equity interest in the LLC. The Company operates and controls the

business and affairs of, and consolidates the financial results of, the LLC through New LLC. We conduct our business

through the LLC. As the LLC is substantively the same as New LLC, for the purpose of this discussion we will refer to

both New LLC and the LLC as the “LLC”.

The LLC is a limited liability company taxed as a partnership for income tax purposes, and its taxable income or loss is

passed through to its members, including the Company. The LLC is subject to income taxes on its taxable income in certain

foreign countries, in certain state and local jurisdictions that impose income taxes on partnerships, and on the taxable

income of its U.S. corporate subsidiaries. As a result of our ownership of LLC Common Units, we are subject to U.S.

federal, state, and local income taxes with respect to our allocable share of any taxable income of the LLC and are taxed at

the prevailing corporate tax rates. We intend to cause the LLC to make distributions in an amount that is at least sufficient

to allow us to pay our tax obligations and operating expenses, including distributions to fund any ordinary course payments

due under the Tax Receivable Agreement. See “Liquidity and Capital Resources - Tax Receivable Agreement” for

additional information about the TRA.

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Empower Program

In the first quarter of 2026, we initiated a three-year restructuring program (the “Empower Program”) that will streamline

our brokerage, binding, and underwriting operations, optimize our scale, accelerate our data and technology strategies, and

enhance efficiencies across all of our Specialties. The program is estimated to result in approximately $160 million of

cumulative one-time charges through 2028, funded through operating cash flow, and is expected to generate annual savings

of approximately $80 million in 2029. Actions taken under the Empower Program are expected to be completed by the end

of 2028. Restructuring costs will primarily be included in General and administrative expense, relating to third-party

professional services, technology and data initiatives, and other expenses. The remaining costs will be incurred through

Compensation and benefits expense, predominately relating to third-party contractor and other workforce-related costs.

We began recognizing costs associated with the restructuring plan in the first quarter of 2026. For the three and six months

ended June 30, 2026, we incurred restructuring and related costs of $33.4 million and $39.3 million, respectively, with the

$39.3 million recognized over the first six months of 2026 representing cumulative costs since the inception of the

program. Of the cumulative $39.3 million expense, $25.2 million was incurred in general and administrative expense with

the remaining being workforce-related costs. Restructuring expense within general and administrative expense includes

costs relating to professional services, technology and data initiatives, license fees, and third-party contractors, as well as

non-cash expenses associated with the impairment of internally-developed software. Compensation and benefits

restructuring costs include severance as well as employment costs for services rendered between the notification and

termination dates and other termination payments. While the current results of the Empower Program are in line with

expectations, changes to the total savings estimate and timing of the Empower Program may evolve as we continue to

progress through the program and evaluate other potential opportunities. The actual amounts and timing may vary

significantly based on various factors.

Key Factors Affecting Our Performance

Our historical financial performance has been, and we expect our financial performance in the future to be, driven by our

ability to:

Pursue Strategic Acquisitions

We have successfully integrated businesses complementary to our own to increase both our distribution reach and our

product and service capabilities. We continuously evaluate acquisitions and intend to further pursue targeted acquisitions

that complement our product and service capabilities or provide us access to new markets. We have previously made, and

intend to continue to make, acquisitions with the objective of enhancing our human capital and product and service

capabilities, entering natural adjacencies, and expanding our geographic presence. Our ability to successfully pursue

strategic acquisitions is dependent upon a number of factors, including sustained execution of a disciplined and selective

acquisition strategy which requires acquisition targets to have a cultural and strategic fit, competition for these assets,

purchase price multiples that we deem appropriate and our ability to effectively integrate targeted companies or assets and

grow our business. We do not have agreements or commitments for any material acquisitions at this time.

Deepen and Broaden our Relationships with Retail Broker Trading Partners

We have deep engagement with our retail broker trading partners, and we believe we have the ability to transact in even

greater volume with nearly all of them. For example, in 2025, our revenue derived from the Top 100 firms (as ranked by

Business Insurance) expanded faster than our Organic revenue growth rate of 10.1%. Our ability to deepen and broaden

relationships with our retail broker trading partners and increase sales is dependent upon a number of factors, including

client satisfaction with our distribution reach and our product capabilities, retail brokers continuing to require or desire our

services, competition, pricing, economic conditions, and spending on our product offerings.

Build Our Delegated Authority Business

We believe there is substantial opportunity to continue to grow our Delegated Authority business, which includes both our

Binding Authority Specialty and Underwriting Management Specialty. We believe that both M&A consolidation and panel

consolidation have a long runway. We believe that both M&A consolidation and the use and reliance on scaled delegated

Underwriting Management will continue to grow. Our ability to grow this business is dependent upon a number of factors,

including a continuing ability to secure sufficient capital support from insurers, the quality of our services and product

offerings, marketing and sales efforts to drive new business prospects and execution, new product offerings, the pricing and

quality of our competitors’ offerings, and the growth in demand for the insurance products.

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Invest in Operations and Growth

We have invested heavily in building a durable business that is able to adapt to the continuously evolving specialty and

E&S markets and intend to continue to do so. We are focused on enhancing the breadth of our product and service

offerings as well as developing and launching new solutions to address the evolving needs of the specialty insurance

industry and markets. Our future success is dependent upon a number of factors, including our ability to successfully

develop, market, and sell existing and new products and services to both new and existing trading partners. We will

continue to prioritize strategic investments that support revenue growth such as investments in talent, de novo formations,

product innovation and solutions, M&A, and technology in order to maximize long-term value creation, which could have

a short-term margin impact.

The Empower Program initiated in the first quarter of 2026 is designed to enhance efficiencies across all of our Specialties.

The efficiencies we gain through the Empower Program are expected to allow us to continue making strategic investments

in growth, top-tier talent, and de novo formations, and address the rapidly evolving needs of our clients.

Generate Commission Regardless of the State of the Specialty and E&S Markets

We earn commissions, which are calculated as a percentage of the total insurance policy premium, and fees. Changes in the

insurance market or specialty lines that are our focus, characterized by a period of increasing (or declining) premium rates,

could positively (or negatively) impact our profitability.

Managing Changing Macroeconomic Conditions

Growth in certain lines of business, such as project-based construction and M&A transactional liability insurance, is

partially dependent on a variety of macroeconomic factors inasmuch as binding the underlying insurance coverage is

subject to the underlying activity occurring. In periods of economic growth, liquid credit markets, and favorable interest

rates, this underlying activity can accelerate and provide tailwinds to our growth. In periods of economic decline, tight

credit markets, and unfavorable interest rates, this underlying activity can slow or be delayed and provide headwinds to our

growth. We believe over the long term these lines of business will continue to grow.

Leverage the Growth of the Specialty and E&S Markets

The growing relevance of the specialty and E&S markets has been driven by the rapid emergence and sustained prevalence

of large, complex, high-hazard, and otherwise hard-to-place risks across many lines of insurance. This trend continued in

2025, with $125 billion of insured catastrophe losses, driven by $52 billion of insured losses related to severe convective

storms (“SCS”) with 19 SCS events that caused losses in excess of $1 billion, which together accounted for the third-

highest annual total for insured losses on record for SCS events, and over $41 billion in losses generated from California

wildfires. The year also included floods in central Texas and the Mississippi valley, causing over 135 fatalities and over $3

billion in insured losses. Additionally, these risks include the potential for more severe hurricanes that occur with greater

frequency, more devastating wildfires, more frequent flooding, escalating jury verdicts and social inflation, geographic

shifts in population density, a proliferation of cyber threats, novel health risks, risks associated with large sports and

entertainment venues, building and labor cost inflation

[Excerpt truncated for page length; source filing is linked above.]

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

The following discussion and analysis summarizes the significant factors affecting the consolidated operating

results, financial condition, liquidity, and cash flows of the Company as of and for the periods presented below. The

following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and the

related notes included elsewhere in this Annual Report on Form 10-K. The discussion contains forward-looking statements

that are based on the beliefs of management, as well as assumptions made by, and information currently available to, our

management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a

result of various factors, including those discussed below and in the sections entitled “Risk Factors” and “Information

Concerning Forward-Looking Statements”.

The following discussion provides commentary on the financial results derived from our audited financial

statements for the years ended December 31, 2025, 2024, and 2023, prepared in accordance with U.S. GAAP. In addition,

we regularly review the following Non-GAAP measures when assessing performance: Organic revenue growth rate,

Adjusted compensation and benefits expense, Adjusted compensation and benefits expense ratio, Adjusted general and

administrative expense, Adjusted general and administrative expense ratio, Adjusted EBITDAC, Adjusted EBITDAC

margin, Adjusted net income, Adjusted net income margin, and Adjusted diluted earnings per share. See “Non-GAAP

Financial Measures and Key Performance Indicators” for further information.

Overview

Founded by Patrick G. Ryan in 2010, we are a service provider of specialty products and solutions for insurance

brokers, agents, and carriers. We provide distribution, underwriting, product development, administration, and risk

management services by acting predominantly as a wholesale broker and a managing underwriter or a program

administrator with delegated authority from insurance carriers. Our mission is to provide industry-leading innovative

specialty insurance solutions for insurance brokers, agents, and carriers.

For retail insurance agents and brokers, we assist in the placement of complex or otherwise hard-to-place risks.

For insurance and reinsurance carriers, we predominantly work with retail and wholesale insurance brokers to source,

onboard, underwrite, and service these same types of risks. A significant majority of the premiums we place are bound in

the E&S market, which includes Lloyd’s of London. There is often significantly more flexibility in terms, conditions, and

rates in the E&S market relative to the Admitted or “standard” insurance market. We believe that the additional freedom to

craft bespoke terms and conditions in the E&S market allows us to best meet the needs of our trading partners, provide

unique solutions, and drive innovation. We believe our success has been achieved by providing best-in-class intellectual

capital, leveraging our trusted and long-standing relationships, and developing differentiated solutions at a scale unmatched

by many of our competitors.

Significant Events and Transactions

Corporate Structure

We are a holding company and our sole material asset is a controlling equity interest in New LLC, which is also

a holding company and its sole material asset is a controlling equity interest in the LLC. The Company operates and

controls the business and affairs of, and consolidates the financial results of, the LLC through New LLC. We conduct our

business through the LLC. As the LLC is substantively the same as New LLC, for the purpose of this discussion we will

refer to both New LLC and the LLC as the “LLC”.

The LLC is a limited liability company taxed as a partnership for income tax purposes, and its taxable income

or loss is passed through to its members, including the Company. The LLC is subject to income taxes on its taxable income

in certain foreign countries, in certain state and local jurisdictions that impose income taxes on partnerships, and on the

taxable income of its U.S. corporate subsidiaries. As a result of our ownership of LLC Common Units, we are subject to

U.S. federal, state, and local income taxes with respect to our allocable share of any taxable income of the LLC and are

taxed at the prevailing corporate tax rates. We intend to cause the LLC to make distributions in an amount that is at least

sufficient to allow us to pay our tax obligations and operating expenses, including distributions to fund any ordinary course

payments due under the Tax Receivable Agreement. See “Liquidity and Capital Resources - Tax Receivable Agreement”

for additional information about the TRA.

54

Table of Contents

Empower Program

In the first quarter of 2026 we are initiating a three-year restructuring program (the "Empower Program") that

will streamline our brokerage, binding, and underwriting operations, optimize our scale, accelerate our data and technology

strategies, and enhance efficiencies across all of our specialties. The program is estimated to result in approximately $160

million of cumulative one-time charges through 2028, and we expect it to generate annual savings of approximately $80

million in 2029. Actions taken under the Empower Program are expected to be completed by the end of 2028.

Acquisitions

On February 3, 2025, the Company completed the acquisition of Velocity Risk Underwriters, LLC

(“Velocity”), an MGU specializing in first-party insurance coverage for catastrophe exposed properties, based in Nashville,

Tennessee.

On May 1, 2025, the Company completed the acquisition of USQRisk Holdings, LLC, a company that

underwrites, structures, prices, and places specialty insurance for corporate clients seeking bespoke, multi-year risk

solutions based in New York and London.

On May 16, 2025, the Company completed the acquisition of 360° Underwriting, an MGU specializing in

commercial construction, based in Dublin and Galway, Ireland.

On July 1, 2025, the Company completed the acquisition of certain assets of J.M. Wilson Corporation (“JM

Wilson”), a binding authority and surplus lines broker specializing in transportation insurance, headquartered in Portage,

Michigan.

On December 1, 2025, the Company completed the acquisition of Stewart Specialty Risk Underwriting Ltd., an

MGU specializing in underwriting large-account, high-hazard property and casualty solutions, based in Toronto, Canada.

We believe these acquisitions complement our product capabilities, enhance our human capital, expand our

total addressable market, and provide us access to new markets in new geographies. See “Note 4, Mergers and

Acquisitions” in the footnotes to the consolidated financial statements in this Annual Report for further discussion.

Key Factors Affecting Our Performance

Our historical financial performance has been, and we expect our financial performance in the future to be,

driven by our ability to:

Pursue Strategic Acquisitions

We have successfully integrated businesses complementary to our own to increase both our distribution reach

and our product and service capabilities. We continuously evaluate acquisitions and intend to further pursue targeted

acquisitions that complement our product and service capabilities or provide us access to new markets. We have previously

made, and intend to continue to make, acquisitions with the objective of enhancing our human capital and product and

service capabilities, entering natural adjacencies, and expanding our geographic presence. Our ability to successfully

pursue strategic acquisitions is dependent upon a number of factors, including sustained execution of a disciplined and

selective acquisition strategy which requires acquisition targets to have a cultural and strategic fit, competition for these

assets, purchase price multiples that we deem appropriate and our ability to effectively integrate targeted companies or

assets and grow our business. We do not have agreements or commitments for any material acquisitions at this time.

Deepen and Broaden our Relationships with Retail Broker Trading Partners

We have deep engagement with our retail broker trading partners, and we believe we have the ability to transact

in even greater volume with nearly all of them. For example, in 2024, our revenue derived from the Top 100 firms (as

ranked by Business Insurance) expanded faster than our Organic revenue growth rate of 10.1%. Our ability to deepen and

broaden relationships with our retail broker trading partners and increase sales is dependent upon a number of factors,

including client satisfaction with our distribution reach and our product capabilities, retail brokers continuing to require or

desire our services, competition, pricing, economic conditions, and spending on our product offerings.

55

Table of Contents

Build Our Delegated Authority Business

We believe there is substantial opportunity to continue to grow our Delegated Authority business, which

includes both our Binding Authority Specialty and Underwriting Management Specialty. We believe that both M&A

consolidation and panel consolidation have a long runway. We believe that both M&A consolidation and the use and

reliance on scaled delegated Underwriting Management will continue to grow. Our ability to grow this business is

dependent upon a number of factors, including a continuing ability to secure sufficient capital support from insurers, the

quality of our services and product offerings, marketing and sales efforts to drive new business prospects and execution,

new product offerings, the pricing and quality of our competitors’ offerings, and the growth in demand for the insurance

products.

Invest in Operations and Growth

We have invested heavily in building a durable business that is able to adapt to the continuously evolving

specialty and E&S markets and intend to continue to do so. We are focused on enhancing the breadth of our product and

service offerings as well as developing and launching new solutions to address the evolving needs of the specialty

insurance industry and markets. Our future success is dependent upon a number of factors, including our ability to

successfully develop, market, and sell existing and new products and services to both new and existing trading partners.

We will continue to prioritize strategic investments that support revenue growth such as investments in talent, de novo

formations, product innovation and solutions, M&A, and technology in order to maximize long-term value creation, which

could have a short-term margin impact.

The Empower Program initiated in the first quarter of 2026 is designed to enhance efficiencies across all of our

specialties. The efficiencies we gain through the Empower Program are expected to allow us to continue making strategic

investments in growth, top-tier talent, de novo formations, and address the rapidly evolving needs of our clients.

Generate Commission Regardless of the State of the Specialty and E&S Markets

We earn commissions, which are calculated as a percentage of the total insurance policy premium, and fees.

Changes in the insurance market or specialty lines that are our focus, characterized by a period of increasing (or declining)

premium rates, could positively (or negatively) impact our profitability.

Managing Changing Macroeconomic Conditions

Growth in certain lines of business, such as project-based construction and M&A transactional liability

insurance, is partially dependent on a variety of macroeconomic factors inasmuch as binding the underlying insurance

coverage is subject to the underlying activity occurring. In periods of economic growth, liquid credit markets, and

favorable interest rates, this underlying activity can accelerate and provide tailwin

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]