Arthur J Gallagher celebrates strong 2018 results driven by acquisitions

Boost by some 48 acquisitions, Arthur J Gallagher & Co enjoyed strong growth in 2018 with revenues and earnings in both its brokerage and risk management units well up on the year before.

Its chairman, president and CEO J Patrick Gallagher described the Q4 results in particular as “fantastic” as the company looks to continue this momentum in 2019. The company also revealed it has already completed seven acquisitions this year and many more in the pipeline.

The brokerage segment alone grew by 11 percent to post revenues of $4.2 billion in 2018 (reported GAP); its new earnings last year increased by 38 percent to reach $573 million. Organic revenues for the same segment (adjusted non-GAPP) rose 5.6 percent to $3.9 billion in 2018 up from $3.7 billion in 2017.

Its risk management segment posted revenues of $798 million, an 8 percent increase on the year before; this segment posted net earnings of $70 million, a 26 percent improvement on 2017. Organic revenues reached $786.3m in 2018 up 7.1 percent from $734.2m in 2017.

Combined year end results for the firm’s brokerage and risk management segments showed total revenue growth of 10.8 percent in 2018, of which 5.9 percent was organic revenue. Its net earnings also increased by 37 percent compared with 2017.

Combined Q4 results for the company’s brokerage and risk management segments showed revenue growth of 11.1 percent, with organic revenue contributing 5.8 percent to this. Combined net earnings were up 47 percent.

The company also noted that its clean energy investments had a terrific fourth quarter and full year 2018, posting net earnings of $22.0 million and $118.6 million, respectively.

"We finished 2018 with a fantastic fourth quarter," said Gallagher. "Total company fourth quarter 2018 diluted net earnings per share was $0.63 and total company adjusted diluted net earnings per share was $0.53, up 62% and 15%, respectively.”

The results report said: “The insurance rate environment and exposure growth continue to be a slight revenue tailwind for Gallagher in most geographies. This is an excellent environment for our professionals to demonstrate their expertise, their market knowledge and our capabilities."

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