What will be a really, really interesting presentation. Ryan is a very unique company, and as I was just talking to someone else about it, is in building this company in the last 13, 14 years, Pat and the team have had a lot of foresight in building a company for where the market is going. And if you started 15 years ago, you know, E&S and the wholesale business, it was a nice business, but it wasn't close to the size and scale it is today. And they've built a very interesting infrastructure and franchise to where, again, where the business is going.
What I mean by that is, you know, we live in a very, you know, increasingly complex world, and from the insurance industry, that poses a lot of challenges because the insurance industry, you know, has a lot of very good facets to it, but it doesn't always move that quickly. What Ryan has built is really a, you know, very developed franchise of helping more and more complex, complex and changing needs of clients, big and small, forgetting well, what's happening today in the next five, 10 years. That, that sounds like a generalization, but, you know, they're running hundreds and hundreds of different products and product teams that are changing all the time.
And importantly, you know, they've scaled it to an extent that the industry, when I say the industry, the broker community and the client base, is becoming more and more dependent on that structuring, that sculpting capability. So it's a, it's really a fascinating business model. You can't build that overnight. It's been, again, 15 years. In the next 10 years, it's gonna continue to evolve. So with that, one more thing. I have to remember that if you, if you're interested in greater disclosures, they'll be on the Blair website. So with that, I will turn it over to the team. And Pat, if you'd like to kick it off.
Thank you, Adam, and nice to see everyone here, and we're always very excited to come to the William Blair conference because they get some great participation. So we've spent the day with many of your fellow investors that ask really great questions. So we're expecting great questions from this very good-looking audience. So I'm just gonna take you back a little bit in history, and talk about our founding thesis, why we started the company. So risks were becoming much more complex back in 2010 when we started, and they were getting to be much larger and very much more volatile. Climate change was really raising its ugly head, and it's done nothing but get worse since that time. And that was an early stage of what we call social inflation.
Social inflation is really so many things that have happened in the insurance industry that have raised the risk profile and driven up the cost of insurance, driven up the losses that industries incurred, and so much of that has to do with human behavior. So a lot of litigation issues. Litigation financing now used to be kind of a dirty word. Now today, very reputable companies are investing to drive up the cost of settlement and the cost of adjudication. In addition to that, the change in generational attitudes on business, on insurance companies coming in to participate in litigation as jurors. Nuclear verdicts, claims that would have settled for $5 million, now $10 million and $12 million or $15 million. So there's just this social inflation that is driving up costs.
Then, obviously, lawyers are benefiting from somebody willing to pay the financing of their legal bills, that driving up losses as well. Then we have economic inflation, so there's been a lot of turmoil. We anticipated a lot of that, and in order to address that complex environment that we found ourselves in, we needed to really build a team that could deal with that and cope with that. And while we were making the investments, we knew that retail brokers, who were getting much larger through a very solid organic growth and M&A, were really going to be doing a lot of acquisitions and continuing organic growth, and they needed a third-party counterparty that they could rely on.
There were two, but we thought there was a need for a third and one that would do it a bit differently. They were getting larger, and they became our clients. Additionally, there was a retail panel consolidation of the use of wholesalers. They'd been using several hundred, and that was just not going to the market efficiently. They weren't optimizing the value of their scale and scope, and so we knew that they'd consolidate the use of wholesalers. Shortly after we started, the large ones went from, call it 20, down to 3. Aon went to 3, Marsh went to 3, Willis went to 4. That panel consolidation benefited people who made the investment that, that we've made. Additionally, delegated authority, meaning carriers, insurance companies, delegating the underwriting-...
the administration and the distribution to a counterparty, and we saw that as a great opportunity. Our mission statement as we started, was that we wanted to be the intermediary to intermediaries, to bring them specialty lines, insurance products and services. And additionally, be an intermediary to insurance carriers, being an outsourced vehicle for them to delegate underwriting, admin, and distribution. That was a big goal. That was a jackpot, because that's where the industry wanted to go, and that's where it's gone, since we started. So keep in mind the role we play, and we earn it every day. The retail broker is our client. The carrier, we have a duty of care to the carrier to deliver them underwriting profits, growth, scale, and scope resulting in that.
So we have these great relationships with preferred relationships with 97 of the top 100 retail brokers. And then we have relationships with thousands of retail brokers that are part of the top 100, but then thousands that are in the... That didn't sound too good. The top 100, we have 97 of the top 100, and then we have thousands of retail brokers that don't have the capabilities of doing a lot of these things on their own, and they rely on us. So that's how we and why we were founded. The trends have been great over this period. Very soft market for the first 6, 7 years of our existence. Soft meaning very competitive on pricing.
But we earned the market share to become the second largest wholesale broker and really the largest now, managing underwriter, delegated authority. So we're not taking risk, but we're being the outsource provider of the management of that risk. So the current trends, we've had double-digit organic growth since our founding. Quite good margins. We had a great 2023. In our mind, it was a very strong 2023, and we're off to a strong start. Well, we had a very strong Q1, and we're off to a strong start, Q2. There have been secular growth drivers that started back when we started in 2010 and are even stronger today. So the E&S market has grown dramatically. When we started, it was about 4% of the commercial insurance market.
Now it's 2022, 2023, and that's going to continue. It's not gonna keep expanding at those rates, but, the freedom of rate and form is what you've got in terms of the E&S market, excess and surplus lines market. The rest of the 77% of it is highly regulated. You have to get your rates and, and forms approved by each state in which you do business, and so they can't respond in time with these dramatic changing loss costs and complex risks. So that's why the E&S market has become so attractive. We knew that we could only earn this business if we provided them a value prop that others couldn't and didn't provide, or that they couldn't do for themselves. So keep in mind, if a retail broker can deliver the value to their client without us, they're going to do that.
They're gonna do that. So we constantly earn our way each day with these clients by helping them design the product and place it in the right format, with the right capital providers. And the phenomenon over these past 14 years, you used to be able to get a lot of these risks done with one, two, or three companies. Now, it could be 25 companies because of the need to spread the risk in the concept of insurance. So our value prop was built from the beginning. I had the good fortune of hiring this guy, Tim Turner, who's the best insurance executive that I know and I've ever dealt with. And in terms of what he brings to the party an encyclopedic understanding of insurance, but particularly E&S risks. And the second person I hired was an actuary.
Why hire an actuary as a second person? Because we knew that in order to get, earn the delegated authority opportunities from capital providers, that we would have to have the infrastructure. Infrastructure, meaning technology, obviously, but actuarial support. So we have a strong actuarial team, catastrophe modelers, data scientists, just a whole infrastructure that a carrier would otherwise provide. But we have a culture where we can attract top-decile underwriting talent, that it's not easy for carriers to attract or keep if they have them. So that's a value, part of, very important part of our value prop to the carrier community. So as this, these risks have gotten more complex and, climate issues expanding, property rates have escalated dramatically, and I'm sure you're all aware of that.
They've gone up so high that there is some moderating, some leveling, but not in really tough and complex risks, and risks that are loss incurred. So if they've had tough results on their portfolio, they're gonna pay a lot higher premium. So one of the things that we've done, we've based this on having Tim as the President of our company, attracting an incredible pool of talent that are really differentiating. So we earn the business by the differentiating IP we bring through our brokers and our underwriters. The underwriters all report in the Miles, and we have differentiating top-decile talent as underwriters and brokers. And so we win in the marketplace every day, much more than we don't win.
We have a culture that is a platform, not only incentivizes people to perform at a very high level. They're all on variable cost. All the brokers are on variable cost. The underwriters are not, but they get paid for their performance on producing underwriting profits. So the duty of care for the managing underwriter is to the capital provider. So growth is not their primary goal. Underwriting profits are their primary goal. So what we've been doing is expanding our total addressable market through organic growth, double digit, as I said, every year since we started, but also through a very robust M&A strategy. We've been building a moat that we think is really quite protective, expanding our total addressable market. So, for example, we just expanded in a major...
in a minor way, but in a major impact for us in Europe, because we feel that there's a great opportunity there. So our strategy is aligned with our clients and our trading partners. So there's this talk about retailers getting back into doing what we do, and there, there's some of the retailers have, in fact, purchased wholesalers, but we're still growing with those retailers very nicely. And our two biggest, two of our biggest clients, Marsh & McLennan, have started de novos. We have invested $ billions in this, in the infrastructure of what we have, so it's very difficult for people to replicate what, in fact, we've put, we've put together, to value, to the, to the benefit of our, of our clients. So we're constantly looking to expand our total addressable market. We do a lot of that through product innovation.
So not only geographic expansion, but product expansion, and that gives us a differentiating value prop to our clients. We structure ourselves around industry specialization, so we have property industry experts, casualty industry experts, but then healthcare, construction, energy. We go through all the major industries, sports and entertainment. So aligning our expertise with the retail brokers' expertise and the underwriters' expertise to get the best outcomes for their clients. We are known as innovative, and we are known as empowering our talent, and those two value those two sets of values have really been a core of our success.
M&A, as I said, has been a significant part of our success, and I wanted to say that in our investor call, we got questions about M&A, and we said we have a very robust pipeline, very robust pipeline. Well, what would you do? What kind of acquisitions, or what kind of limits would you put on it? Would you make a billion-dollar acquisition? Yeah, we can afford that, and we could do that. And we're not gonna do it unless it has a cultural fit, first of all, a strategic fit, secondly, and is accretive, thirdly. And we keep a very tight discipline on that. But we've made just short of 60 acquisitions to blend with this organic growth. So we've been the beneficiary of this year's acquisitions becoming next year's organic growth, and following years.
So we say we're built for double-digit organic growth, but we have a balance sheet that allows for a lot of acquisition. There are several billion of opportunities out there. We never would do that in a year, for certain, but we do have a governor. Here's the governor, our Chief Financial Officer. We're highly underleveraged now. So we have a lot of cash, and we have a lot of aspiration, but we're very careful about what and who we would bring in. But we're not gonna go above 4, a tad above 4x in leverage, and only that if we knew we could pay it down quickly. So we're not. We're a public company, so some people would say that's fairly highly leveraged. In our peer group, that's not highly leveraged. The PEs are much higher leverage than that.
Our core competitors are much more highly leveraged than that, but that's the level, the height of our, of our comfort. So we do have ambitions on M&A, and we do believe that there's a lot of growth ahead of us, both organically and inorganically. So it's the exceptional talent that differentiates us, but we have tremendous new business capabilities and are delivering on new business. 'Cause our people are really differentiated, and they fight like hell to win, and they're winners. We have a lot of, of the top talent in the industry. So I'll just close by saying, you know, we're built for, we're built for double-digit rates of growth. We've invested billions to get this value prop on behalf of our clients, and we think we're ready to bring a lot of value to our clients and trading partners.
Now I'm gonna turn it over to the governor. Governor?
Thank you, Pat. So I'm gonna quickly, in five minutes or less, touch on the building blocks of growth and then some aspects of our financial profile. The first part, many of this will be a call back to what you've just heard from Pat. So four main pillars that have driven our growth thus far and that have years to go because they're underpinned by secular trends. The first two are related to our clients. Best clients in the world, retail brokers. As they pour billions into M&A, they're buying clients for us 'cause remember, we're preferred with 97 of the top 100. The other thing that retailers do that benefits us is that years ago, they decided instead of using hundreds or even dozens of wholesale intermediaries, they should shrink that to a very short list of highly sophisticated, highly scaled intermediaries.
Well, that strategy is very well understood, but there's still a lot of work to do, even among the top 10 and certainly the top 100 and below retailers, to drive that strategy deep in the organization, and that's just on the wholesale brokerage side, which is 65% of our business. The other 35 is delegated authority. Retailers are just starting to put together short list panels on that side, and we are positioned to disproportionately benefit when that happens. Growth driver number 3 is the E&S market, which, as Pat said, is highly dynamic. We are specialists in this market. It's represents almost 80% of our portfolio, and historically, it's grown at 2x the rate of the admitted market, and we think that's a trend that has a lot of legs.
The last critical pillar of our growth is our special sauce, and building on what Pat said, it's really underpinned by two main things. One is our history, our really our DNA-level commitment to innovation. So our ability to spin out new products, anticipate our clients' needs, and then expand our TAM. So up until recently, we were entirely P&C. We expanded into wholesale employee benefits, alternative risk, and reinsurance underwriting. We can talk about any or all of those in the question session later. So second, the other part of our special sauce is talent. So we talk about being a destination of choice for top talent.
We accomplish that through our culture, which is both empowering and entrepreneurial, and then, of course, we represent an earnings potential here for brokers and underwriters that really doesn't exist anywhere else other than maybe one or two shops. So when you put all this together at the scale and scope that we have, that's the moat that we're, that we're talking about. Even if you could identify talent at our scale to replicate what we have, it would almost be cost prohibitive to acquire that and build it. So we think that our competitive position is extremely defensible, and it's gonna continue to allow us to take market share. That's why we say that we're double-digit growers through the pricing cycle.
So if you take away nothing else about our growth profile, take away this: You don't need double-digit growth in pricing for us to grow double-digit organically. You don't even need double-digit growth in the E&S market. If that settles down to something in, like, the mid-single digits, we can turn that into double-digit organic growth routinely. Quickly on our financial profile, so our investment strategy, we are investing organically in our platform but also through M&A. As Pat said before, our M&A strategy is really an organic growth strategy because today's M&A is tomorrow's organic growth. Like, we take great businesses, typically double-digit organic growers on their own, they're very specialized, and we make them even better. So that's gonna be a fuel for our organic growth going forward.
Our free cash flow profile, so critical to take away that we're mostly selling compulsory products, so think high base of recurring revenue. Second, low CapEx. We're an asset-light business model. Historically, our CapEx needs have been less than 2% of revenue. And then third, high variable cost structure. So the majority of our cost on our P&L is comp, and most of our comp is variable. We utilize commissions on the wholesale brokerage side, which is 65% of our business, pay-for-performance culture. Think high variable cost. Capital allocation. So we've said it time and time again, M&A is our highest priority. We've got a very robust, ambitious pipeline. As Pat said, we think that there's billions of dollars worth of opportunities out there. If it's strategic and accretive, it could be a $20 million acquisition, it could be a billion-plus.
As long as it checks our strategic boxes, cultural fit, we'll, we'll look at it, and we'll do it within prudent limits of leverage, which we think it's not a target, but it's an expectation that 3-4 times is where we'll spend most of our time. We would go above 4 briefly, but expect to come back down. Right now, we're under 2 times total net leverage, so we have a ton of dry powder to tackle this ambitious M&A pipeline. Final margins. So we believe that investing for organic growth is, should be the priority over optimizing margin today. But where we are in terms of our scale, both our organic growth and also our Accelerate 2025 program, which is really an investment program in efficiencies, it's not an either/or discussion. So last year, we finished with just over 30% margin.
The high end of our guide range for margin this year is 31.5, and we think in the medium term, we could get to a 35% margin at our current business mix, and even quicker if the business mix of M&A tilts towards delegated authority. So let me leave you with that and turn it over to Tim.
Thanks, Jeremiah, and welcome, everyone. It's great to be here. I would like to start out by reaffirming what Pat and Jeremiah have said to a degree, that the market remains very firm in the E&S space in North America. Stamping results are not the be-all, end-all. They're really meant to be looked at on an annual basis, but we do get to see them quarterly, and they remain double digit. That's specific to the gauge on the dumping and the shedding from the standard markets, unprofitable, volatile, property, and casualty business that they can't get regulatory approval for the right rates, terms, and conditions, so they non-renew it. That's a real big opportunity for us. As you know, it's the governor on the new flow that comes into the channel, but we're about much more than that.
We're about capturing existing E&S business, going head-to-head with our competitors. While we don't win every deal, we're winning a high percentage of the time, and we know that because the top 100 clients share our competitors' results as they share our results with them. So it's very transparent, and we know where we line up against our competitors. Again, our, our, our model is all about A-rated talent. We, we really try to avoid B players, B talent, and it makes a big difference when you're going head-to-head with these competitors. Very specialized, as you know, very technical. There's no generalists anymore in the wholesale market and the delegated underwriting authority space. It's very tight and very narrow. So within property, obviously, cat property is a big driver of business. It's not the only one, but it's the one that gets the most headlines.
Our contention is global warming's not going away. Today, it's 120 degrees in Phoenix. That's never happened in early June. So we get indicators all the time. 14-16 named storms are predicted for the wind season. There's no carrier, standard or E&S carriers, who are putting up big limits on cat property. It just continues to be a big issue. Wildfire, not looking good for the wildfire season later this summer. And convective storm, right in the center of the country, continues to be a loss leader for many of these carriers. So we continue to see more property flow into the channel. We're set up to capture it. We know we're winning again, head-to-head competition on existing business. Casualty, something we read about every day in the news.
Unfortunately, social inflation and our cities, our environment that we're in, it's very dangerous, and there's a lot of catastrophic claims that are coming in. The loss reserve factors, loss cost adjustment factors, are causing reserves from 15-19 to continue to deteriorate. Lots of CEOs of insurance companies questioning whether they have rate adequacy on the 2020, 2021, and 2022 years. The losses are really deteriorating in high-hazard classes of business, the very same practice group verticals that we've invested in. So transportation, habitational, long-tail, high-hazard business that has a legacy that is tied to latency, very difficult to rate, very difficult to structure. You know, that's how we're set up to really accelerate into these narrow channels like construction and again, transportation.
The entire transportation sector, as an illustration, is a loss leader in the reinsurance world. It's not just long-haul trucking. It's any commercial risk with a large fleet, thousands of heavy and extra-heavy vehicles. They're coming into the E&S market for their lead umbrella. And then, of course, livery and shared economy, just 100% pouring into the E&S market. And it's one that we strategically saw a few years ago. We made key acquisitions to beef up and strengthen our bench, if you will, for broking and underwriting. And that's really the theme that you'll see as Miles will get into more detail. Pat's vision from day one was to attract A talent, invest in the best brokers in these practice group verticals, but to build proprietary underwriting product right behind it. So our value proposition is industry-leading.
Brokers need us now for our broking expertise, our depth and breadth, and our ability to handle large volumes of business, and our ability to bring innovation and new underwriting solutions in right behind it. So those two really separate us and differentiate us from our competitors. It's really working well. Innovation, my partners have talked about it. It's speed to market. There's a lot of creative competitors out there, but it takes a while, and it takes too long for many of them to create a product quickly as these loss leaders emerge. And now that we have our own fronting paper with Nationwide, we have our own ability to get in and create solutions and get the reinsurance market to support us. And we can create proprietary product, like high net worth public entity and municipality solutions.
We can get in the market very quickly as we see the market shifting. With our approximate $25 billion in premium, we have a real front-row seat on any movement in these high-hazard areas, and we can get in quickly to create this product. That, again, gives us an edge and a leg up against our competitors on product, extending our value proposition so that we can get control of the marketing exercise. There's 105 wholesale-only property and casualty E&S insurance companies in America today. 15 years ago, there were less than a dozen. So the product that's available for us to use and distribute to create these solutions is strong. It's not enough, believe it or not. In some of these distressed areas, we need more product. So we're constantly innovating and trying to get more carriers to give us proprietary product.
It's working. As Pat said, we have, we have a great second quarter going. We're very confident that we'll be industry-leading, continue to be industry-leading, and we appreciate your support. Thank you.
Miles.
Oh, it's all right. Go ahead. Oh, sorry.
No, it's all right. Please, please.
Miles on there, delegating on the regulatory platform.
No, that's okay.
We appreciate the time, and I know we've used the clock, so I'll be here for questions.
I went too long.
Okay.
We're over that.
Sorry.
So we'll kick off Q&A. We'll see. I'll kick off with one question, and then we'll open it up. You know, maybe a little historic perspective on the, on the wholesaling E&S business, that when I think about the business 10, 15 years ago, always played an important role, but when I, when I talked to the brokers, so your, your main client, the brokers, to me, it was, you know, I'd say more of an accommodation, that they couldn't find a home for a risk. They had this really unique situation. Take some amount of time, XYZ didn't want it, they'd go to the wholesale market. And there was a big place for that.
Well, it wasn't a small market, but today, when I talk with the brokers, your, your main client, and the- these are more the good-sized clients, it, it's more a matter that the, the brokers are really dependent on Ryan, you know, the wholesale channel. So to, to me, it's, you know, when I look at it, it sort of flipped. Almost the leverage in the business has flipped, where you're more dependent on the brokers than you are because they're clients, but today it seems like the brokers are really becoming more and more everyday dependent on you. So if I can ask, what do you think is the, excuse me, one or two factors that sort of have flipped that switch over?
I would say the first thing is the complexity of the risks and the need for that really special intellectual property that these experts that we have trained, developed, hired some industry experts, and that the partnership that they can get with us just gives them a much better opportunity to win the business, keep the business, renew the business. That's it.
I would add that our commitment to a very high level of execution, sense of urgency, always putting the client first and proving it every day. These aren't one-off sales. These are repeat customers, repeat sales. We're doing. We have thousands of deals that we have to work on at any one given time, so you're tested repeatedly over and over and over, and we're the last stop. So you're only as good as your last deal, so to speak, and we really pride ourselves on getting 5,000 people to execute at a very high rate of speed, as close to mistake-free as we can be, and I think that wins us more new business every day.
Great. Great. Well, open up for questions to the... Frank.
Can you tell us about the restructuring program? I've forgotten the name that you've given it, but please give us some idea. Are you? Is it completed? You know, where are you in that process?
So, we've, we've called it Accelerate 2025. It is a restructuring program, but fundamentally it, it's different from a lot of the programs that you've, you've heard about, from various companies because a more traditional program would just be focused on cost-cutting, just firing people and hoping that you don't have to rehire them in the future. Our program was really spawned out of taking a look at some middle and back office functions that we had, duplicates of across the company, right? Because we grew up through acquisition. These functions, think of them as, non-core, non-strategic, ripe for innovation and consolidating them into one shared service model, and then strategically sourcing the labor for that. So there's, there's some outsourcing involved in the program, but it's really driving efficiency and then taking as many-...
The revenue producing folks, so they have more time to produce revenue and deal with clients. So you've got this great byproduct of we're, we're saving money on things that are non-core to our business, but then our underwriters and our brokers have more time to underwrite and broker, so it actually makes us faster. It'll help us integrate acquisitions quicker. The good news about the program, because we're not just cutting costs, we're investing in this infrastructure, that the savings go beyond the $60 million that we've anticipated for 2025. We can actually go a little bit further with the program, and then just by the nature of what we're building, the, the savings will actually grow over time. Last year, we said that most years we're going to scale on an underlying basis. We've resumed that this year.
So how you get to the full 150 basis points margin improvement this year is a combination of some savings from the program, some underlying savings. Next year, the full 60 minus some reinvestment will fall to the bottom line, plus the underlying scaling of our business. And then beyond that, once the program is fully up and running, it'll actually amplify the annual scaling that we can achieve. And that's why I say confidently that without compromising investments in long-term growth, we can get to a 35% margin in the not-too-distant future.
Over there. Hey, guys, can I just follow up on that?