Arthur J. Gallagher & Co. reported total revenue of $ 1.9 billion for the second quarter, an increase of 22.2% over the same period last year, although organic revenue growth was lower than some of its competitors reported so far.  The broker also reported several acquisitions during the quarter, but its largest proposed acquisition ever, as agreed during the quarter, fell apart with Aon PLC's decision to complete the acquisition of Willis Towers Watson PLC. That deal had been changed to include a side agreement to sell various Willis companies to Gallagher, in an attempt to address competition concerns.
Gallagher's nuclear brokers reported revenue of $ 1.39 billion, an increase of 1
The property / accident rate continued to rise during the second quarter, says J. Patrick Gallagher Jr., President, CEO and CEO of the company.
"Global P / C interest rates remain fixed overall and at the same time we see increased economic activity," he says.
Increased premium renewals in the second quarter were similar to the first quarter, he said. US retail sales increased by about 8%, Canada increased by 9%, the United Kingdom increased by 8% and Australian interest rates increased by 6%, Gallagher said.
In its risk management business area, which includes its claims management business, Gallagher reported revenue of $ 245 million, an increase of 28.4% and up to 20% on an organic basis, Gallagher said.
The unit benefited from new business, increased employment compensation claims and "and a simpler pandemic year comparison," he said.
Gallagher reported a net profit of $ 201.8 million, an increase of 24.7% over the same period last year.
During the quarter, Gallagher completed seven brokerage acquisitions, which are expected to generate $ 34.1 million in annual revenue.
Mr. Gallagher said that while the company would have been happy with the opportunity to buy a large portion of Willis' reinsurance business and other Willis business, it has a full pipeline of smaller acquisition targets and will continue with its "tuck-in" acquisition strategy.
In response to an analyst's question about employment restrictions in the terminated agreement to buy much of Willi's business, Gallagher said there were certain restrictions in the agreement.
“We intend to honor them; they are not extensive, but in general we are not limited in our ability to employ general production talent, he says.