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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.
Mergers and acquisitions of insurance agents and brokerages in the United States and Canada set fresh records in 2015 in deals pushed by strong valuations and ongoing private equity interest.