Agent of Change
Industry Icon Patrick G. Ryan reflects on his 60 years in the insurance industry.
Patrick G. Ryan stepped in his first insurance job 60 years ago, selling life insurance.
“I wanted to go into insurance because I really felt I could sell,” Ryan said. “And I wanted to be in an industry where you could be entrepreneurial. The only ceiling on your success was self-imposed.”
Ryan still hasn’t hit that ceiling.
After 41 years as the founder and CEO of Aon, Ryan retired — but didn’t slip quietly away. In 2010, he launched a new business Ryan Specialty. Ryan, founder, chairman and CEO of Ryan Specialty, was recently awarded the coveted title of the Inside P&C Honors Insurance Broking CEO of the year.
The award “is deeply meaningful for me,” Ryan said. “I love the insurance industry. I love the broking role. And I’ve worked very hard to enhance that role as a broker, as an advisor and as an advocate for insurance.
“I’m very proud to receive the award on behalf of my 3,400 teammates. The insurance industry has been fundamental to my life, my family’s life…it’s an opportunity to really impact society.”
The Early Days
While Ryan, a fresh finance and literature graduate of Northwestern University, quickly realized life insurance wasn’t where he wanted to be.
“I liked the business side of the insurance industry. So I was attracted to the commercial property and casualty space,” Ryan said.
Ryan, whose father ran a Ford dealership in Milwaukee, saw an opportunity: what if car dealers could be licensed insurance agents, selling life, disability and car insurance to customers?
That business idea “wasn’t even embryonic [at the time],” Ryan recalled. “It didn’t exist.”
Ryan launched the first Finance and Insurance department at a car dealership in suburban Chicago in 1962, selling insurance products on behalf of Continental Casualty Company, now the primary subsidiary of CNA Financial. That move changed the auto dealership industry.
The Automotive Hall of Fame dubbed Ryan “The Founder of Dealership Financing.”
“The rules he established for this new and valuable profit center ensured that it became a fundamental part of dealership operations. Ryan also developed a training program that groomed licensed agents for work in the nascent F&I departments that implemented his vision,” Automotive New said.
Ryan created his first company in 1964 to train sales representatives to sell auto, life and disability at car dealerships.
“I called it Pat Ryan and Associates, because I wanted it to sound bigger than it was,” Ryan said. He was 26, and the company had one other employee.
A Life Changing Moment
By 1968, Pat Ryan & Associates was selling $15 million in annual premiums. He took the firm public in 1971 to help raise capital to meet long-term goal of diversifying to multiple insurance products. In 1976, he acquired Globe Life, a move that changed his life.
Ryan didn’t want to be in the life, accident and health business.
“They wanted me to run the business… but I didn’t want to be in that business,” Ryan said. “Then while I was shaving, I said, you dummy. You’re not going into the accident heath business. You’re getting a printing machine, a money printing machine.”
The 70-year-old company had $500 million in hard assets, paid 8% cash dividends and had $100 million of free cash flow, Ryan said.
I welcome competition. Competition is great. It makes us all better.
“I had a dream, the dream was to expand our fledging brokerage business — but I didn’t have the capital to do that. [Global Life] did. I went to the board and said, I’ll do it.”
“That was an inflection point that was life changing, career changing, industry changing,” Ryan said.
Within a month of buying Global Life, Ryan bought the seventh largest insurance broker in the world, catapulting the fledgling Ryan insurance brokers into the managing general underwriting business. It created the foundation of the company which would continue to grow to become Aon Corp., the second largest insurance broker today.
A New Chapter
After retiring from Aon, Ryan said 2010 presented a unique opportunity. After the financial crisis, “there was dynamic change going on. The world was getting riskier. I saw an unmet need that we could fill,” Ryan said.
Against a backdrop of broker consolidation, Ryan said he saw a need for insurance specialists.
“There was a need for increased focus on skills by industry risk, by product risk. Because of the freedom of rating for E&S there was an opportunity to be innovative and I’ve always loved innovation,” Ryan said.
In July, Ryan Specialty went public, reaching a market capitalization today of roughly $108 billion. It was almost 50 years to the day of Ryan's first IPO: Pat Ryan & Associates, which went public in 1971. That company eventually changed its name to Ryan Insurance Group, merged into Combined Insurance and was renamed Aon in 1987.
A third company Ryan founded, The Warranty Group, was sold to Onex who later sold to Assurant.
Ryan said he continues to see the insurance industry evolving to meet the changing risks of the world.
“The way to succeed in this business is to focus on certain areas. The real need is on specialty lines, because that’s where the changing risks develop and reside,” Ryan said. “The insurance industry has always been a great cradle of innovation. “
He said there’s still room for start ups and new carriers to respond to the ever changing risk landscape.
“I welcome competition. Competition is great,” Ryan said. “It makes us all better.”