Arthur J. Gallagher Q3 2021 Earnings Report
Key Takeaways
Arthur J. Gallagher & Co. reported strong Q3 2021 results, with a 17% increase in revenue for the brokerage and risk management segments combined, driven by 10% organic revenue growth. Net earnings increased by 22%, and adjusted EBITDAC grew by 13%. The company completed 5 tuck-in mergers and is on track to acquire Willis Towers Watson's treaty reinsurance brokerage operations in Q4 2021.
Core brokerage and risk management segments combined to post 17% growth in revenue.
Organic revenue growth was 10%.
Net earnings growth was 22%.
Adjusted EBITDAC growth was 13%.
Arthur J. Gallagher
Arthur J. Gallagher
Arthur J. Gallagher Revenue by Segment
Forward Guidance
The company expects to see incrementally higher Brokerage segment costs in fourth quarter 2021, relative to the same quarter in 2020, of approximately $30 million.
Positive Outlook
- Global P/C rates remain firm.
- Improved economic activity is leading to additional insured exposure units.
- Positive policy endorsements.
- Favorable mid-term policy adjustments.
- Benefits and HR consulting business saw higher covered lives and growing demand for special project work resulting from the improving employment situation.
Challenges Ahead
- The pace of economic recovery accelerates, we could see expense increases greater than the estimate provided.
- Changes in worldwide and national economic conditions, including the pace of economic recovery following COVID-19
- Changes in premium rates and in insurance markets generally
- Changes in the insurance brokerage industry’s competitive landscape.
- The extent to which the pandemic impacts our business, operations and financial results will depend on numerous evolving factors, many of which are not within our control and that we may not be able to accurately predict
Revenue & Expenses
Visualization of income flow from segment revenue to net income