Gallagher Reports 20% Growth Amid Ongoing Price Increases
Arthur J. Gallagher & Co. has reported notable financial growth despite a fluctuating insurance market. For the third quarter, the company’s revenue surged by over 20%, significantly benefiting from strategic acquisitions.
Financial Highlights
In a call with analysts, CEO J. Patrick Gallagher Jr. revealed that Gallagher achieved a revenue total of $3.33 billion for the third quarter, marking a 20.2% increase from the previous year. Excluding acquisitions and currency effects, organic revenue grew by 4.8%.
Casualty and Property Insurance Trends
The insurance landscape is currently mixed. Gallagher noted that while global property insurance renewal premiums decreased by 5%, casualty insurance rates continued to rise. The overall increase for casualty rates was 6% across various lines:
- Workers Compensation: +1%
- General Liability: +4%
- Commercial Auto: +5%
- Umbrella Liability: +8%
- Directors and Officers Liability: -2%
U.S. casualty lines saw a growth of 8%, signaling ongoing demand in this sector.
Acquisition Strategy
Gallagher’s robust growth can be attributed to its aggressive acquisition strategy. In the third quarter alone, the company completed six acquisitions, including the significant $13.8 billion purchase of AssuredPartners in August. This acquisition is part of Gallagher’s commitment to expanding its brokerage operations.
Core Business Performance
In its core brokerage segment, Gallagher reported a revenue of $2.92 billion, reflecting a 22% increase. Additionally, risk management revenues, which include Gallagher Bassett, rose by 8.8% to $402.1 million.
Earnings Overview
Despite the revenue growth, net earnings for the quarter fell by 12.9%, totaling $273.6 million. However, earnings before interest, taxes, depreciation, and amortization increased by 17.7% to reach $812.9 million.
Overall, Gallagher’s performance illustrates resilience in a challenging insurance market amid ongoing price adjustments across different sectors.
