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20 Years…..
2
The Roots of Risk Strategies…..
• The Opposite
– Client focused, not
internally focused
– Consultative, not
transactional
– Lean, flat structure
– Keen expertise
– Problem solvers
– Provide solutions to
risk challenges, not
just sell insurance
– Not too corporate
3
RSC Today
4
Vision, Values, Strategy
Values
Committed to our clients
Focused on the success
of our people
Collaborative & engaged
culture
Build for the future
People Goals
Leadership $400M to $500M revenue
Help our people grow and 25% to 27% EBITDA
realize their potential
Purpose
Attract, develop retain top
Attract top talent talent
Development programs for Recognized leader in
all employees specialty practices
Clear career paths Respected & Top 10 broker for strategic
Differentiated
carriers
Succession
National
Broker/Risk
Advisor
Practices Revenue Growth
Employee benefits, New clients
private client, Focus on retention
entertainment, fine arts,
professional services, Collaboration & cross sell
private equity, financial M&A
services, healthcare, real Proprietary programs
estate, higher education,
Deeper, strategic carrier
transportation, non-
relationships
profits
5
Marketplace Dynamics
Net Investment Income
5.0%
1.0%
0.0%
08 09 10 11 12 13 14 15 16 17
• Precipitating events
– Harvey, Irma, Maria, Nate
– Mexico earthquakes
– California wildfires
– Coupled with:
• 12+ years of a declining market
• Challenging investment income environment
• Years of reserve releases to prop up profitability
• Direct Impact
• AIG - $3.1B net loss forecast
• Lloyd’s - $4.5B to $6B net incurred loss forecast
• Everest Re and XL – both at over $1.3B in net claims
• World market to experience aggregate claims of $100B to $150B
• Capital event for many insurers The worldwide (re)insurer market is
underpinned by a single interconnected (and now significantly
diminished) capital base – much of it non traditional capital
7
What Does This all Mean to Us?
• Soft market
– Declining rates, premiums, revenue
– Leading with price
– Lack of differentiation
– Resources and technical expertise take a backseat
– “No pain” = Fewer looks….
• Changing market
– Expertise matters Carriers will take a back-to-basics approach to
underwriting which inspires back-to-basics selling and broking
– Regardless of what happens with rates, clients and prospects will
want creativity and resources to address their total cost of risk
– This requires a shift in perspective from selling price to focusing on
solutions and problem solving
– It’s our time to really shine…..
8
Cross Sell – The Opportunity
9 479
8 677
7 989
6 1,485
5 2,196
4 3,094
3 4,380
2 7,359
1 15,209
9
CIAB: Cyber is the New Cat Risk and Insuretech
10
2018 Objectives
• 92% retention
• Growth >2%
• Round out our clients – one more policy each
• Reduce number of wholesalers by 50%
11
Longer term objectives
12
Revenue
13
EBITDA
TTM August
2017 PF $ %
EBITDA $61,686,000
14
RSC’s Business Mix
Employee Benefits
24%
Commercial P&C
Personal Lines 63%
13%
~5% Growth
235,000,000 $233,227,000
230,000,000
225,000,000
$221,699,000
220,000,000 $218,603,000
215,000,000
$211,511,000
210,000,000
205,000,000
200,000,000
Revenue
2015 PF 2016 PF 2017 PF TTM 2018 Plan*
16
Agencies Joining Risk Strategies in 2017
Terrell Insurance Services
• Charles Terrell
• Joined RSC March 2017
• Collinsville, TX
• Personal, Commercial, & Benefits
▪ Data includes 15 public and private equity backed insurance brokers from all U.S. geographies
➢ 3 public brokers
➢ 12 private equity backed brokers
▪ These firms represent the most active acquirers in the insurance brokerage industry
➢ In total, these 15 firms completed over 650 acquisitions in 2015, 2016 and Q1 2017
➢ Median Revenue for the over 650 acquired firms was approximately $4.5 million
▪ The median revenue for the 15 acquirers is $870 million
➢ Max: $4.2 billion
➢ Min: $90 million
Source: SNL Financial as of April 2017 (based on Announcement Date). Includes whole company,
franchise and asset sales.
Acrisure (PE) 42 41 12 95
Hub (PE) 35 38 8 81
Broad Street (PE) 26 28 11 65
AssuredPartners (PE) 30 26 4 60
Arthur J. Gallagher 19 23 9 51
Confie Seguros (PE) 19 16 1 36
NFP (PE) 16 9 3 28
Hilb Group (PE) 8 15 4 27
Alera Group (PE) 0 22 0 22
USI (PE) 6 10 4 20
Risk Strategies (PE) 5 10 2 17
Marsh McLennan 7 5 3 15
Brown & Brown 12 5 0 15
Alliant (PE) 8 6 1 15
Source: SNL Financial as of April 2017 (based on Announcement Date). Includes whole company,
franchise and asset sales.