Gallagher revenue up in third quarter

Arthur J. Gallagher & Co. saw revenue increase and earnings fall in its third-quarter results released Thursday.

Total revenue for the brokerage edged up to $1.48 billion in the third quarter of 2016, a 1.9% increase over the third quarter last year. Revenue for its retail brokerage operation increased 5% to $877.6 million.

“Every single division around the world posted organic growth in the quarter … domestically we saw about 4% organic growth,” said J. Patrick Gallagher Jr., chairman, president and CEO of the brokerage, on a conference call with analysts on Friday.

Insurance rates in the U.S. market are stable and slightly soft internationally, he said.

Gallagher, which for years has expanded aggressively via acquisitions, saw a slight downturn in its merger activity in the third quarter with a total of just seven deals, averaging $4 million in revenue.

“Third-quarter acquisition activity was a little slower than normal, but our pipeline remains very robust,” Mr. Gallagher said.

Gallagher’s net earnings fell 7.5% to $130.4 million. A spokeswoman for Gallagher declined to give further details; but on the call, Chief Financial Officer Douglas K. Howell said: “Overall margin expansion was a bit muted because we had some adverse domestic medical plan experience in the quarter … it’s unfortunate but it does happen from time to time.”