Gallagher’s Q3 results show steady growth in key segments

Arthur J Gallagher & Co (Gallagher) has reported its financial results for the third quarter ended September 30, 2024, showing growth in both brokerage and risk management revenue.

The company reported total revenue of $2.77 billion, up from $2.45 billion in the year-ago quarter, a 13% increase across its core segments driven by organic growth, acquisitions and favorable market conditions.

In the brokerage segment, revenue increased to $2.4 billion, up from $2.1 billion in the third quarter of 2023. Net income in the brokerage segment reached $383 million, up from $339 million a year ago , with EBITDAC of $691.5 million and diluted earnings per share (EPS). of $1.70.

Brokerage segment adjusted revenue, which accounts for divestitures, personnel changes and acquisition costs, was $2.37 billion, with adjusted EBITDAC of $797.7 million and earnings per share of $2.50.

Meanwhile, revenue in the risk management segment increased to $369.7 million from $331 million in the third quarter of 2023. The segment reported net income of $44.6 million and EBITDAC of $74.1 million, resulting in earnings per share of $0.20. Adjusted revenue was $369.6 million, EBITDAC was $76.9 million and EPS was $0.22.

Reported Enterprise segment revenue was $0.4 million, with a net income loss of $113.5 million, up slightly from a loss of $97.3 million in the third quarter of 2023. Adjustments for corporate transactions, legal fees and tax adjustments resulted in an adjusted net income loss of $103.4 million, or $0.46 per share.

For the combined brokerage and risk management segments, reported revenues totaled $2.77 billion, with net income of $427.6 million, EBITDAC of $765.6 million and diluted earnings per share of $1.90. Total adjusted earnings were $2.74 billion in revenue, $609.7 million in net income, $874.6 million in EBITDAC and an EPS of $2.72.

Commenting on the results, J. Patrick Gallagher, Jr. (pictured above), Chairman, President and CEO, noted that the third quarter demonstrated sustained financial growth with a 13% increase in combined brokerage and risk management revenues and organic growth Net profit increased by 12% from 6%.

“Most importantly, our core culture is thriving,” Gallagher said. “For the first nine months of the year, revenue increased 16%, organic growth was 8%, net income increased 19% and adjusted earnings per share increased 17%.”

Gallagher said global renewal premiums remained stable in the third quarter, as reported in September. He noted that recent hurricanes in the U.S. have not yet significantly impacted insurance prices for October, but are expected to add complexity to property reinsurance renewals in January.

“Changes in customer burdens, including medium-term policy adoption, continue to be positive and new claims are increasing; “Both indicate solid economic activity in our clients’ businesses,” he said.

Gallagher also addressed the recent storms and flooding and expressed his support for affected customers and colleagues. Gallagher experts helped customers manage their coverage and claims.

“Looking forward, we are very well positioned. Our net new business is up year-over-year, renewal premiums continue to rise and our M&A pipeline is robust. The opportunities that lie ahead are enormous and I am very excited about our long-term prospects,” he said.

What do you think about this story? Please share your comments below.