Ryan Specialty (a leading international specialty insurance firm) has signed a definitive agreement to acquire Velocity Risk Underwriters from funds managed by Oaktree Capital Management. Based in Nashville, Tennessee, Velocity is a leading managing general underwriter (MGU) providing first-party insurance coverage for catastrophe-exposed properties. It will become a part of the Ryan Specialty Underwriting Managers division of Ryan Specialty.
Velocity was launched in 2015 to focus on US property catastrophe risks, providing hard-to-secure coverage for perils such as named storms, earthquakes, tornados, and hail, emphasizing the middle market and small to medium commercial businesses. And geographically, Velocity has a national footprint with a robust presence in Florida, Texas, and the Southeast.
As of this deal and subject to regulatory approval, Velocity’s wholly owned E&S carrier, Velocity Specialty Insurance Company (VSIC), will be acquired by FM – a leading commercial property mutual insurance company representing many of the world’s largest organizations.
Velocity generated about $81 million of operating revenue for the 12 months ended December 31, 20241, and is to be acquired by Ryan Specialty for an upfront cash consideration of $525 million, subject to customary purchase price adjustments. The upfront cash consideration is exclusive of VSIC and any earnout consideration.
This acquisition of Velocity is expected to close in early 2025.
Insurance Advisory Partners and Howden Capital Markets & Advisory served as financial advisors to Velocity and Oaktree, and Debevoise & Plimpton served as legal counsel to Velocity and Oaktree. And J.P. Morgan Securities served as exclusive financial advisor to Ryan Specialty and Sidley Austin served as legal counsel to Ryan Specialty. Willkie Farr & Gallagher served as legal counsel to FM.
KEY QUOTES:
“Adding Velocity to our property catastrophe portfolio significantly enhances our ability to serve our wholesale clients and further solidifies Ryan Specialty Underwriting Managers as the preeminent delegated authority platform in the country. This talented team has developed robust technology, portfolio management, and data analytics capabilities that augment their innovative underwriting and claims approach. We are looking forward to having the Velocity team as a part of the Ryan Specialty family.”
– Miles Wuller, President and CEO of Ryan Specialty Underwriting Managers
“VSIC’s focus on property insurance and expertise in understanding the new risk landscape that many businesses face aligns perfectly with FM’s mission and may eventually allow us to provide our clients with an even broader suite of products and solutions to meet risks today and in the future. We are excited to welcome VSIC to the FM family and strengthen our strategic relationship with Ryan Specialty.”
– Malcolm Roberts, Chairman and CEO of FM
“We are thrilled about the synergy of our industry-leading property underwriting and claims capability with the Ryan Specialty organization and with FM acquiring our E&S balance sheet. With this strategic transaction, Velocity gains expanded access to markets and additional resources to continue on its growth journey. With our E&S balance sheet becoming part of an incredibly well-rated and capitalized entity in FM, it further enhances the security and capacity we bring to the wholesale market.”
– Phil Bowie, Executive Vice Chairman of Velocity
“Through this transaction, Velocity will continue delivering exceptional service to brokers, customers, and capital sources. Ryan Specialty maintains the same foundational values and innovative culture that we have created and live every day at Velocity. The combination of these incredible organizations will allow our teammates to further their skills and provides the opportunity for Velocity to accelerate the growth of our managing general underwriter to even greater heights. Joining Ryan Specialty is the right home for the future of our team; we’re all looking forward to our future together.”
– Jake Rothfuss, CEO of Velocity
“We are proud to have partnered with Phil, Jake, and the entire Velocity team and wish them success in the next chapter of the company’s growth.”
– Greg Share, Managing Director of Oaktree
