Gallagher revenue up in second quarter

Arthur J. Gallagher & Co. reported 2018 second-quarter revenue of $1.66 billion on Thursday, up 11.5% from a year ago.

The Rolling Meadows, Illinois-based brokerage reported net income of $115 million, more than twice the year-ago total.

“Frankly, the team crushed it this quarter, delivering on all measures,” J. Patrick Gallagher Jr., chairman, president and CEO, told analysts during a conference call.

In the brokerage segment, Gallagher reported second-quarter revenue of $1 billion, up 11.6% from a year ago.

The risk management segment reported revenue of $237 million, up about 10% from the second quarter of 2017. Mr. Gallagher said the segment was helped by $2 million of additional Australian performance bonus fees and a $2.5 million ramp up fee in Australia.

The combined brokerage and risk management segments generated organic revenue growth of 6.6%, Mr. Gallagher said.

In the U.S., retail property/casualty brokerage business was up 5.5%, with property and commercial auto pricing up about 5%. Organic growth for Gallagher’s business in the United Kingdom increased 4% and Australia and New Zealand increased 7%, he said.

The brokerage also completed 12 mergers for $145 million in annualized revenues in the quarter.

Revenue for the first six months of the year totaled $3.49 billion, up about 11.6% percent over the prior-year period. Net income totaled $409.7 million, up 27.9% from a year ago.

“We really are riding a lot more new business, which means we’re taking share primarily from the littler players,” Mr. Gallagher said during the analysts call. “We know that 90% of the time when we compete in the marketplace, were not competing with our bigger competitors, we’re competing with the local competitor. And I think our guys and gals in the field are just doing a good job of explaining the value proposition we bring.”

Regarding Brexit, Mr. Gallagher said there is more consternation in Britain now then there was a year ago.

“We don’t have a huge European trade … but we will be making sure that we’re set up properly in Europe,” Mr. Gallagher said.