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Arthur J. Gallagher reports higher revenue in fourth quarter

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Arthur J. Gallagher reports higher revenue in fourth quarter

Arthur J. Gallagher & Co. saw revenue and net earnings rise in the fourth quarter of 2015 despite a jump in expenses.

Fourth-quarter revenue increased 6.4% over the fourth quarter of 2014 to $1.03 billion, while net earnings rose 21% to $62.3 million, the broker reported Tuesday.

Meanwhile, expenses for the quarter rose 7.5% to $1.31 billion, while investment income and gains realized on books of business sales dropped 32.8% to $15.4 million, the company said in the earnings statement.

Organic growth and acquisitions helped offset the losses, however.

In a conference call to analysts Wednesday morning, Gallagher Chairman, President and CEO J. Patrick Gallagher Jr. said the company had achieved organic growth for the quarter of 4.2% and 5.1% for the year. He also said the company had completed 15 acquisitions with annualized revenues of $46.0 million in the quarter and 44 mergers with revenues of $230 million for the full year.

Mr. Gallagher said that looking forward for 2016, the company would pursue a merger and acquisition strategy similar to that of the past 18 months featuring smaller, tuck-in acquisitions.

He added that Gallagher's merger pipeline remains strong and that the company continues to pay fair prices for its acquisitions.

Full-year revenue rose 13.2% over 2014 to $4.05 billion, while earnings rose 17.6% to $356.8 million.

Expenses for the year jumped 17.6% to $5.10 billion as investment income and gains realized on books of business sales rose 25.3% to $60.9 million.

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