Global insurance brokerage Arthur J. Gallagher & Co. has released its financial results for the third quarter of 2019, reporting stable earnings when compared with the previous year, as well as organic revenue growth of 5.8%.
Net earnings came to $137.1 million in Q3 2019, showing a minor decline from the $138.4 million recorded last year.
When looking at the first nine months of the year, however, revenues increased slightly, from $1.74 billion in 2018 to $1.79 billion this year.
For the brokerage segment specifically, earnings increased by 23.6% to $151.1 million for the quarter, while revenues went up 14.0% to $1.2 billion for the first nine months of the year.
The risk management segment of the company, meanwhile, saw earnings decline by 1.8% to $16.2 million for the quarter, but revenue growth of 6.3% to $211.6 million for the first nine months.
“We delivered an outstanding quarter of operating performance, and we are well positioned for a strong finish to 2019,” said J. Patrick Gallagher, Jr., Chairman, President and CEO of Arthur J. Gallagher.
“During the third quarter, our core brokerage and risk management segments combined to post 16% growth in earnings per share; 13% growth in revenues, of which 5.8% was organic revenue growth; net earnings margin improved by 78 basis points; and adjusted EBITDAC margins expanded by 66 basis points.”
He added that the brokerage completed 14 tuck-in mergers during the third quarter, with approximately $85 million of annualised revenues, bringing the first nine months total to 38 mergers with $351 million of annualised revenues.
Gallagher also commented on the current pricing environment, noting that global P&C rates had improved since mid-year and are now increasing at about 5% in the aggregate, based on its internal data.
“In early October, we also surveyed our producers and consultants regarding their clients’ exposure units,” Gallagher continued. “Over 75% said their customers continued to grow their payrolls and exposure units during the third quarter and more than 95% of these respondents said they were seeing similar or stronger client exposure growth as they begin working on 2020 renewals.”
“An environment of increasing rates and increasing exposure units is one in which our clients rely on our talented production staff to deliver the best insurance, risk management and benefits consulting advice as they leverage our vast array of resources and capabilities,” he concluded.