Arthur J. Gallagher has reported revenues of £6,916.2m in 2021, up from $6,6116.1m in 2020, according to its latest financial results.
The results, released yesterday, showed a 13% increase in revenue over one year. They also showed that EBITDAC between 2020 and 2021 rose from $1,879.1m to $2,202.6m, or 17%, in the same time period.
By segment, the firm had EBITDAC of $2,018.1m in its brokerage business, up from $1,727.6.1m the year before. Meanwhile, its risk management business saw EBITDAC of $184.5m in 2021, up from $151.5m in 2020. Its corporate side, meanwhile, reported an EBITDAC loss of $173.6m in 2021, which was still a relative improvement over its loss in 2020 of $142.2m.
Accompanying the report, J. Patrick Gallagher, chairman, president, and CEO of the firm, said: “I am extremely pleased with how our businesses performed during 2021 and that our 39,000 colleagues continue to deliver the very best insurance and risk management advice to clients and prospects, day-in and day-out. We have terrific momentum, which makes me bullish about our prospects in 2022 and beyond!”
Included within the results are Gallagher’s assessment of the impact of the recovery following the initial fallout of the Covid-19 pandemic.
Relative to Q4 2020, the firm said that by Q4 2021:
- “Nearly all of our Brokerage segment operations’ revenues benefited from our clients’ improving business conditions, which increases insured exposure units (i.e., insured values, payrolls, employees, miles driven, gross receipts, etc.) and covered lives.”
- “Our Risk Management segment operations’ revenues benefited from our clients’ improving business conditions, which increases new arising workers’ compensation and general liability claims.”
- “Our clean energy investments benefited from higher electricity production due to increased demand for electricity from improving business conditions, somewhat offset by the sunset of our 2011-era plants in November and December of 2021.”
Gallagher predicted for this year: “If economic conditions continue to improve, we believe we may continue to see favourable revenue benefits in our Brokerage and Risk Management segments in the first quarter of 2022 relative to the same quarter in 2021. However, if the economic recovery slows, due to the Omicron variant or other factors, we could see less [sic] revenue benefits than we experienced in the second, third and fourth quarters of 2021.”
Gallagher also drew attention to its acquisition of the WTW treaty reinsurance brokerage operations.
It said: “On December 1, 2021, we acquired substantially all of the Willis Towers Watson treaty reinsurance brokerage operations for an initial gross consideration of $3.25bn, and potential additional consideration of $750m subject to certain third-year revenue targets. There are twelve remaining international operations with deferred closings that comprise approximately $180m of the initial purchase consideration that are subject to local regulatory approval and are expected to close in the first and second quarters of 2022.”
Gallagher went on: “We funded the transaction using cash on hand, including $1.4bn of net cash raised in our May 17, 2021 follow-on common stock offering, $850m of net cash borrowed in our May 20, 2021 30-year senior note issuance, $750m of net cash borrowed in our November 9, 2021 10-year ($400m) and 30-year ($350m) senior note issuances and short-term borrowings.”
