Gallagher brokerage revenue increases 4.5% in Q4
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Arthur J. Gallagher & Co. on Thursday reported a 4.5% increase in fourth-quarter brokerage revenue, to $1.25 billion.
Total revenue increased 3.8%, to $1.46 billion. Net earnings increased 47.4% to $214.1 million.
For the year, brokerage revenues increased 7.3%, to $5.17 billion. Total revenue increased 5.9%, to $5.99 billion. Net earnings increased 30.5%, to $1.04 billion.
“We delivered an excellent quarter in the midst of a pandemic,” said J. Patrick Gallagher, chairman, president and CEO, during the brokers’ earnings call on Thursday after the markets closed.
Globally, property/casualty rates “continued to march higher during the fourth quarter” and increased about 8% across Gallagher’s footprint, with wholesale rates higher than retail.
Terms and conditions have been increasing, and capacity constrained, particularly for umbrella, cyber and public company directors and officers liability business, Mr. Gallagher said.
Mr. Gallagher said he anticipates similar property/casualty market conditions continuing in 2021. He said while the economy is growing, “the pace of the recovery remains uncertain.”
“We see a very robust new business year ahead in ’21 and ’22,” he said, however.
Mr. Gallagher said the brokerage completed 10 mergers, accounting for $100 million of estimated annualized revenues, during the fourth quarter, while a handful more, representing $85 million in annualized revenue, have been completed this year. This includes the acquisition of the United Kingdom-based specialty brokerage The Bollington Wilson Group Ltd., which was completed in February.
There are plans for acquisitions representing $300 million in annualized revenue, he said.
Mr. Gallagher said the merger of Willis Towers Watson PLC and Aon PLC will present many opportunities for Gallagher as it becomes one of the three largest brokers. “We’re in a very, very good position,” he said.
