A. J. Gallagher reports 26% rise in net earnings in Q1’24 results

Global insurance broker A. J. Gallagher & Co. has reported net earnings of $612.7 million for the first quarter of 2024, an increase of 26% on the $486.6 million seen a year earlier, driven by a strong performance in both its brokerage and risk management businesses.

Group-wide, revenues before reimbursements rose from $2.7 billion in Q1 2023 to $3.2 billion in Q1 2024, as EBITDAC improved to $1.1 billion from $875 million.

In the firm’s brokerage segment, revenues before reimbursements increased to $2.9 billion from $2.4 billion, and EBITDAC rose from $880.6 million in Q1 2023 to $1.1 billion in Q1 2024. The brokerage segment’s net earnings increased 27% year-on-year to $652.6 million.

Gallagher’s risk management division also performed well in the first quarter of 2024, generating revenue before reimbursements of $352.8 million, up from the $297.6 million seen a year earlier. EBITDAC increased year-on-year from $55.9 million to $70.5 million, as the segment’s net earnings rose 17% to $39.3 million.

Somewhat offsetting the solid result in the brokerage and risk management segments, Gallagher’s corporate business fell to a net loss of $79.2 million in Q1 2024, compared to a net loss of $62.2 million in Q1 2023.

“We had a great first quarter to begin 2024. Our core brokerage and risk management segments combined to post 20% revenue growth, including 9.4% organic revenue growth. At the same time, we grew net earnings by 26% and adjusted EBITDAC by 19%,” said J. Patrick Gallagher, Jr., Chairman and CEO.

“First quarter primary insurance renewal premiums were up 7%. Property increases were up nearly 10% and casualty increases were approaching 7%, overcoming headwinds from professional lines like D&O and cyber. Reinsurance carriers are broadly maintaining their discipline on pricing, terms and conditions, while meeting increased client demand with incremental capacity. Overall, our insurance and reinsurance carrier partners continue to behave rationally, pushing for rate increases where it’s needed by line of business, industry and geography.

Customers are buying more insurance. Our first quarter data is showing solid customer business activity and mid-term policy endorsements, audits and cancellations combined were again ahead of last year’s levels. We are also seeing continued labor market strength and further increases in new claims arising, also pointing to a resilient economic backdrop for our clients.

“As I look across our business, we remain well positioned to win new clients and retain our existing customers. I believe we have the best team in the business, with leading talent and expertise, stellar service, superior analytics, vast amounts of data and a wide global reach. We are in an enviable industry position and I am excited about the remainder of 2024 and beyond!” he added.

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