Arthur J. Gallagher brokerage revenue rises in Q3Posted On: Oct. 25, 2019 12:08 PM CST
Corrected: An earlier version of this story stated incorrect total revenue and earnings figures and an incorrect percentage increase for brokerage revenue. The story has been updated.
Arthur J. Gallagher & Co. on Thursday reported a 14% increase in brokerage revenue, to $1.2 billion, for the third quarter ended Sept. 30.
Total revenue for all units, including its third-party administrator business and clean energy investments, increased 3.8% to $1.79 billion. Net earnings increased 6.4% to $165.8 million. This compares with a 13.1% revenue increase in the second quarter and an 8.2% net earnings increase.
The broker completed 11 brokerage acquisitions in the third quarter, accounting for an estimated annualized revenue of $70 million, said J. Patrick Gallagher, chairman, president and CEO, during the broker’s earnings call Thursday.
This brings the brokerage’s total for the year to 35, accounting for more than $330 million of annualized revenue, he said.
Rates in the United States are up about 5%, with workers comp “the only line not showing incremental pricing strength,” Mr. Gallagher said.
Reiterating a theme he expressed during the second quarter earnings call, Mr. Gallagher said, “This is not a hard market. It’s getting firmer, there’s no question about it,” but “there’s still plenty of capacity” and deals are getting done, he said.
He said, Gallagher has been training its people to “get out in front of this and explain to your clients that in fact in many instances rates are lower today than they were in 2005.”