Related Parties |
9 Months Ended |
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Sep. 30, 2024 | |
| Related Party Transactions [Abstract] | |
| Related Parties |
Related Parties Ryan Investment Holdings
Ryan Investment Holdings, LLC (“RIH”) was formed as an investment holding company designed to aggregate the funds
of Ryan Specialty and Geneva Ryan Holdings, LLC (“GRH”) for investment in Geneva Re Partners, LLC (“GRP”). GRH
was formed as an investment holding company designed to aggregate investment funds of Patrick G. Ryan and other
affiliated investors. Two affiliated investors are LLC Unitholders and directors of the Company, and another is an LLC
Unitholder and employee of the Company. Ryan Specialty does not consolidate GRH as the Company does not have a
direct investment in or variable interest in this entity.
The Company holds a 47% interest in RIH and GRH holds the remaining 53% interest. RIH has a 50% non-controlling
interest in GRP and the other 50% is owned by Nationwide Mutual Insurance Company. GRP wholly owns Geneva Re, Ltd
(“Geneva Re”), a Bermuda-regulated reinsurance company, and GR Bermuda SAC Ltd (the “Segregated Account
Company”). The Segregated Account Company has one segregated account, which is beneficially owned by a third-party
insurance company (the “Third-party Insurer”). RIH is considered a related party variable interest entity under common
control with the Company. The Company is not most closely associated with the variable interest entity and therefore does
not consolidate RIH. The assets of RIH are restricted to settling obligations of RIH, pursuant to Delaware limited liability
company statutes.
The Company is not required to contribute any additional capital to RIH, and its maximum exposure to loss on the equity
method investment is the total invested capital of $47.0 million. The Company may be exposed to losses arising from the
equity method investment as a result of underwriting losses recognized at Geneva Re or losses on Geneva Re’s investment
portfolio. RIH has committed to contribute additional capital to GRP over the next several years. Patrick G. Ryan, through
a trust of which he is the beneficiary and co-trustee, has committed to personally fund any such additional capital
contributions. Any such additional capital contributions under this commitment will not affect the relative ownership of
RIH’s common equity.
Geneva Re
The Company has a service agreement with Geneva Re to provide both administrative services to, as well as disburse
payments for costs directly incurred by, Geneva Re. These direct costs include compensation expenses incurred by
employees of Geneva Re. The Company had $0.4 million and $0.2 million due from Geneva Re under this agreement as of
September 30, 2024 and December 31, 2023, respectively.
Ryan Re Services Agreements with Geneva Re
Ryan Re, a wholly owned subsidiary of the Company, is party to a services agreement with Geneva Re to provide, among
other services, certain underwriting and administrative services to Geneva Re. Ryan Re receives a service fee equal to
115% of the administrative costs incurred by Ryan Re in providing these services to Geneva Re. Revenue earned from
Geneva Re was $0.3 million and $0.4 million for the three months ended September 30, 2024 and 2023, respectively, and
$1.1 million for the nine months ended September 30, 2024 and 2023. Receivables due from Geneva Re under this
agreement were $1.1 million and $0.7 million as of September 30, 2024 and December 31, 2023, respectively.
On April 2, 2023, Ryan Re entered into a services agreement with Geneva Re in accordance with which Ryan Re
subcontracted certain services to Geneva Re that Ryan Re is required to provide to the segregated account of the
Segregated Account Company on behalf of the Third-party Insurer. The Company incurred expense of $2.7 million and
$2.2 million during the three months ended September 30, 2024 and 2023, respectively, and $7.9 million and $5.4 million
during the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 and December 31,
2023, the Company had prepaid expenses of $7.9 million and $5.3 million, respectively, related to this services agreement.
The prepaid expenses are included in Other currents assets on the Consolidated Balance Sheets.
Company Leasing of Corporate Jets
In the ordinary course of its business, the Company charters executive jets for business purposes from Executive Jet
Management (“EJM”), a third-party service provider. Mr. Ryan indirectly owns aircraft that he leases to EJM for EJM’s
charter operations for which he receives remuneration from EJM. The Company pays market rates for chartering aircraft
through EJM, unless the particular aircraft chartered is Mr. Ryan’s, in which case the Company receives a discount below
market rates. Historically, the Company has been able to charter Mr. Ryan’s aircraft and make use of this discount. The
Company recognized expense related to business usage of aircraft of $0.2 million for the three months ended
September 30, 2024 and 2023, and $1.0 million and $0.9 million for the nine months ended September 30, 2024 and 2023,
respectively.
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