Gallagher publishes financial results for second quarter

Gallagher publishes financial results for second quarter | Insurance Business America

Insurance News

Gallagher publishes financial results for second quarter

EMEA boss points to “fantastic” period for UK operations

Insurance News

By
Terry Gangcuangco

Arthur J. Gallagher & Co. has published its financial results for the second quarter of 2023.

Here’s how the global brokerage performed in the period in terms of net earnings:

Segment

Q2 2023 net earnings/(loss)

Q2 2022 net earnings/(loss)

Brokerage

US$290.3 million

US$311.7 million

Risk Management

US$36.7 million

US$28.6 million

Corporate

US$(91.2 million)

US$(55.2 million)

Total company

US$235.8 million

US$285.1 million

Commenting on the numbers, Gallagher chair, president, and chief executive J. Patrick Gallagher, Jr., said in a release: “We had a fantastic second quarter. Our core brokerage and risk management segments combined to post 20% reported revenue growth, 10.8% organic revenue growth, a 14% reported net earnings margin, and we improved our adjusted EBITDAC margin 52 basis points.

“Also during the quarter, we completed 15 new mergers with approximately US$349 million of estimated annualised revenue.”

EBITDAC is net earnings before interest, income taxes, depreciation, amortisation, and the change in estimated acquisition earnout payables, while EBITDAC margin is EBITDAC divided by total revenues for the brokerage segment and revenues before reimbursements for the risk management segment.

The CEO went on to report: “Second quarter global insurance renewal premiums were up 12%, ahead of the 8% to 10% renewal premium change we were seeing throughout 2022 and first quarter 2023. Mid-year reinsurance renewals showed hard market conditions similar to what we saw in January 2023 renewals.

“And, during the second quarter and thus far in July, our data is not showing a slow-down in our customers’ business activity. We are seeing higher exposure units, payrolls, and employee counts.

“Looking ahead, we expect insurance and reinsurance pricing increases to continue in 2023 and perhaps throughout 2024. Continued pricing increases, combined with global exposure growth, provide a favourable backdrop for our talented production team to outperform. Overall, I am thrilled with our second quarter performance and excited about our future.”

Similarly, in Britain, EMEA (Europe, the Middle East, and Africa) chief executive Simon Matson also pointed to the “fantastic quarter” for Gallagher’s UK broking and underwriting operations.

“Our specialty division achieved organic growth of 19%, building on the 17% achieved in Q1, which is an outstanding performance so far in 2023,” Matson noted. “Our UK & Ireland retail division achieved 11%, adding to the 7% in Q1, which is also a fantastic achievement. This growth was as a result of both new business wins and retention of existing clients.”

It was highlighted that the aerospace, property and casualty, construction, and energy teams delivered standout performance for the specialty division, while the retail division achieved what was described as its “best-ever” trading quarter.

Matson added: “Pen Underwriting has continued investing in its marine specialism this quarter, building quickly on its April entry into the sector with a second acquisition, Norwegian MGA Fender Marine. Pen has also bolstered expertise in this area with a succession of senior hires [at] our marine specialist subsidiaries Freeboard Maritime and Vessel Protect.”

Globally, Gallagher employs more than 43,000 people who serve clients in over 130 countries.

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