Gallagher’s Q3 results reveal steady growth in key segments

Arthur J Gallagher & Co (Gallagher) has released its financial results for Q3, ending September 30, 2024, showing growth in both brokerage and risk management revenues.

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

In the brokerage segment, revenues rose to $2.4 billion, up from $2.1 billion in Q3 2023. Net earnings in the brokerage segment reached $383 million, up from $339 million last year, with an EBITDAC of $691.5 million and diluted earnings per share (EPS) of $1.70.

Adjusted revenue for the brokerage segment, which factors in divestitures, workforce changes, and acquisition costs, was $2.37 billion, with an adjusted EBITDAC of $797.7 million and EPS of $2.50.

Revenues in the risk management segment, meanwhile, grew to $369.7 million from $331 million in Q3 2023. The segment reported net earnings of $44.6 million and an EBITDAC of $74.1 million, translating to an EPS of $0.20. Adjusted revenue was $369.6 million, with EBITDAC at $76.9 million and an EPS of $0.22.

Reported revenue in the corporate segment was $0.4 million, with a net earnings loss of $113.5 million, slightly widening from a $97.3 million loss in Q3 2023. Adjustments for corporate transactions, legal costs, and tax adjustments resulted in an adjusted net earnings loss of $103.4 million, or $0.46 per share.

For the combined brokerage and risk management segments, reported revenue totalled $2.77 billion, with net earnings of $427.6 million, EBITDAC of $765.6 million, and diluted EPS of $1.90. Adjusted totals were $2.74 billion in revenue, $609.7 million in net earnings, $874.6 million in EBITDAC, and an EPS of $2.72.

J Patrick Gallagher, Jr (pictured above), chairman, president, and CEO, commented on the results, noting that the third quarter saw sustained financial growth, with combined brokerage and risk management revenues rising 13%, organic growth at 6%, and net earnings up by 12%.

“Most importantly, our bedrock culture is thriving,” Gallagher said. “Through the first nine months of the year, revenues have increased 16%, organic growth is 8%, net earnings have increased 19% and adjusted EPS is up 17%.”

Gallagher indicated that global renewal premiums in the third quarter remained stable, as previously shared in September. He noted that recent hurricanes in the US have not yet significantly influenced insurance prices for October but are expected to add complexity to January property reinsurance renewals.

“Client exposure changes, including mid-term policy endorsements, continue to be positive, and new arising claim counts are growing; both indicating solid economic activity across our clients’ businesses,” he said.

Gallagher also addressed recent storms and flooding, expressing support for affected clients and colleagues, with Gallagher professionals assisting clients in managing their coverages and claims.

“Looking ahead, we are very well positioned. Our net new business is up from prior year, renewal premiums continue to increase and our M&A pipeline is robust. The opportunities ahead of us are immense and I am very excited about our long-term prospects,” he said.

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