Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

a9461bc73047dd44fc9e897b0d8fa84bc504c15670c97012c6c94ea998d3ac3f

Arthur J. Gallagher & Co. (AJG) is a global insurance brokerage, risk management, and consulting services company **[0000950170-24-013370_ajg-20231231.htm:8]**. The company operates primarily through two main segments: brokerage and risk management, offering services such as insurance and reinsurance placements, risk management, and employer-sponsored benefit programs **[0000950170-24-013370_ajg-20231231.htm:8]**. AJG's product lines include traditional group insurance coverages like medical, dental, vision, disability, and life insurance, as well as retirement services, compensation consulting, executive life, and HR consulting **[AJG_3392675_16]** **[AJG_3401889_15]**.

1. **Brokerage** - Provides insurance and reinsurance brokerage services to a wide range of clients, including commercial, nonprofit, and public sector entities, focusing on insurance placements, risk management, and employer-sponsored benefit programs **[0000950170-24-013370_ajg-20231231.htm:8]**.
2. **Risk Management** - Led by Gallagher Bassett, focuses on third-party claims settlement and administration, with significant revenue from workers' compensation claims, liability claims, and specialty product offerings such as medical malpractice and cyber liability **[AJG_3401889_18]** **[AJG_3378772_17]**.
3. **Traditional Group Insurance Coverages** - Offers medical, dental, vision, disability, and life insurance, representing a substantial portion of the company's annual revenue **[AJG_3392675_16]** **[AJG_3401889_15]**.
4. **Retirement Services** - Provides consulting and management services for retirement plans and related financial products **[AJG_3392675_16]** **[AJG_3401889_15]**.
5. **Compensation Consulting** - Offers expertise in designing and managing compensation programs for organizations **[AJG_3392675_16]** **[AJG_3401889_15]**.
6. **Executive Life** - Provides life insurance solutions tailored for executives and high-net-worth individuals **[AJG_3392675_16]** **[AJG_3401889_15]**.
7. **HR Consulting** - Delivers human resources consulting services, including strategy development and implementation **[AJG_3392675_16]** **[AJG_3401889_15]**.

71e7b16c6e1445bf9540e9f9996202bf5f0f0b035d5a9ad413f471e84461c8b0

| Metric / Quarter           | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Acquisitions Closed        | **17**  **[0001193125-23-016262_d369508dex991.htm:3]**  | **10**  **[0001193125-23-122244_d222048dex991.htm:1]**  | **15**  **[0000950170-23-038474_ajg-20230630.htm:63]**  | **12**  **[0000950170-23-056014_ajg-20230930.htm:65]**  | **14**  **[0001193125-24-015499_d721955dex991.htm:1]**  | **12**  **[0001193125-24-113968_d828567dex991.htm:2]**  | **12**  **[0000950170-24-086937_ajg-20240630.htm:57]**  | **3**  **[0000950170-24-118320_ajg-20240930.htm:59]**  |
| Organic Fee Revenue Change | **15.6%**  **[0001193125-23-016262_d369508dex991.htm:5]**  | **14.3%**  **[0001193125-23-122244_d222048dex991.htm:3]**  | **18.1%**  **[0000950170-23-038474_ajg-20230630.htm:69]**  | **17.9%**  **[0000950170-23-056014_ajg-20230930.htm:71]**  | **13.2%**  **[0001193125-24-015499_d721955dex991.htm:5]**  | **13.3%**  **[0000950170-24-050950_ajg-20240331.htm:53]** **[0001193125-24-113968_d828567dex991.htm:3]**  | **7.7%**  **[0000950170-24-086937_ajg-20240630.htm:63]**  | **6.0%**  **[0000950170-24-118320_ajg-20240930.htm:65]**  |

9d954c452355c93eea420456a4367385c3291990a8902588b5763ea31fb8750c

| Metric [Unit: USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Brokerage Segment**      | **1,704.3**  **[0001193125-23-016262_d369508dex991.htm:13]**  | **2,375.2**  **[0001193125-23-122244_d222048dex991.htm:10]**  | **2,088.4**  **[0001193125-23-196121_d460519dex991.htm:14]**  | **2,122.1**  **[0000950170-23-056014_ajg-20230930.htm:46]**  | **2,051.5**  **[0001193125-24-015499_d721955dex991.htm:14]**  | **2,864.9**  **[0000950170-24-050950_ajg-20240331.htm:37]**  | **2,376.3**  **[0000950170-24-086937_ajg-20240630.htm:40]**  | **2,396.4**  **[0000950170-24-118320_ajg-20240930.htm:42]**  |
| **Risk Management Segment**| **323.7**  **[0001193125-23-016262_d369508dex991.htm:13]**  | **330.8**  **[0001193125-23-122244_d222048dex991.htm:10]**  | **353.6**  **[0001193125-23-196121_d460519dex991.htm:14]**  | **369.4**  **[0000950170-23-056014_ajg-20230930.htm:46]**  | **379.2**  **[0001193125-24-015499_d721955dex991.htm:14]**  | **391.4**  **[0000950170-24-050950_ajg-20240331.htm:37]**  | **398.0**  **[0000950170-24-086937_ajg-20240630.htm:40]**  | **410.0**  **[0000950170-24-118320_ajg-20240930.htm:42]**  |
| **Corporate Segment**      | **0.3**  **[0001193125-23-016262_d369508dex991.htm:14]**  | **0.1**  **[0001193125-23-122244_d222048dex991.htm:11]**  | **(0.1)**  **[0001193125-23-196121_d460519dex991.htm:15]**  | **0.5**  **[0000950170-23-056014_ajg-20230930.htm:46]**  | **1.2**  **[0001193125-24-015499_d721955dex991.htm:15]**  | **0.4**  **[0000950170-24-050950_ajg-20240331.htm:37]**  | **1.1**  **[0000950170-24-086937_ajg-20240630.htm:40]**  | **0.4**  **[0000950170-24-118320_ajg-20240930.htm:42]**  |
| **Total Revenues**         | **2,028.3**  **[0001193125-23-016262_d369508dex991.htm:14]**  | **2,706.1**  **[0001193125-23-122244_d222048dex991.htm:11]**  | **2,441.9**  **[0001193125-23-196121_d460519dex991.htm:15]**  | **2,492.0**  **[0000950170-23-056014_ajg-20230930.htm:46]**  | **2,431.9**  **[0001193125-24-015499_d721955dex991.htm:15]**  | **3,256.7**  **[0000950170-24-050950_ajg-20240331.htm:37]**  | **2,775.4**  **[0000950170-24-086937_ajg-20240630.htm:40]**  | **2,806.8**  **[0000950170-24-118320_ajg-20240930.htm:42]**  |

32b9aedca5916fdb16f6824dd2b2072b7e51a25810950e70890222c910fb4fab

1. With the rising multiples in middle-market acquisitions, particularly for deals exceeding $15 million in revenue, how does Gallagher plan to remain disciplined and avoid overpaying for acquisitions in a competitive market where valuations are increasing?  **[AJG_3403687_22]** 

2. Despite having a robust pipeline of over 100 potential mergers representing approximately $1.5 billion in annualized revenue, you've noted a slowdown in deal closures during the first three quarters; what specific strategies are you implementing to ensure these potential deals materialize, especially given external factors like the presidential election year?  **[AJG_3403687_2]** **[AJG_3403687_12]** 

3. There has been a significant increase in workforce and lease termination charges compared to the previous year, which you attributed to workforce optimization and offshoring efforts; can you provide more insight into the scale of these changes and how they are impacting your operational efficiency and employee engagement?  **[AJG_3403687_15]** 

4. Given that contingent commissions can be affected by casualty market pressures and recent storms, potentially impacting earnings by a few million dollars, how are you addressing the potential volatility in contingent revenues to ensure stable financial performance?  **[AJG_3403687_26]** **[AJG_3403687_10]** **[AJG_3403687_23]** 

5. You have around $700 million in annualized revenue from term sheets that are signed or being prepared; historically, what percentage of such deals have successfully closed, and how confident are you in converting this pipeline into actual growth given that some deals can take years to finalize?  **[AJG_3403687_24]** 

b9ff7119d7c6bd5fa8b81b7850f8212d78d47d52c62db1956b2e232c96e97d90

Acquisitions Closed

Organic Fee Revenue Change

2b7d71dbe52dfd4405cd48de5b4e70bfb7c94e4febe9c8d59b1d750fd2dd072a

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Per Share]

EPS - Diluted [USD, Per Share]

aab4eafcc1f89ebfa0fa5fcb20fffd9567ab273c98d333fb8411fd7779c5fe7d

- Two firms in the global brokerage and risk management markets have larger revenues than AJG  **[0000950170-24-013370_ajg-20231231.htm:31]** .
- Insurance and reinsurance carriers that market, distribute, and service a portion of their products directly  **[0000950170-24-013370_ajg-20231231.htm:12]** .
- Banks, consulting and accounting firms, and technology companies that provide alternative risk management products or services  **[0000950170-24-013370_ajg-20231231.htm:12]** .
- Global independent third-party claims administrators  **[0000950170-24-013370_ajg-20231231.htm:12]** .
- Regional third-party claims administrators  **[0000950170-24-013370_ajg-20231231.htm:12]** .
- Insurance-owned claims administrators  **[0000950170-24-013370_ajg-20231231.htm:12]** .
- Legal firms in certain jurisdictions  **[0000950170-24-013370_ajg-20231231.htm:12]** .

5f9d59acf31260d8d2f31919cecad11706cf88c3792e169beecf8b505228b5ed

United States

United Kingdom

Australia

Canada

New Zealand

Other Foreign

Total Revenue

2069e944ddaf258b946c4e5a594a4ef4a394264c45cdf4842780efa719d2839a

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

f352601a8f685c478349378cf6bfe131d9c41ec96c30a467b61fb21ba1c24916

f3a09c475a52c8147c480803adbbc7b8b3ef28131225239b3c11fb5c7408f1d5

- Total Revenue: $2,716 million (+12% YoY)  **[0001193125-25-017328_d926210dex991.htm:15]** **[0000950170-24-013370_ajg-20231231.htm:185]**   
- Brokerage: $2,296 million (+12% YoY)  **[0001193125-25-017328_d926210dex991.htm:15]** **[0001193125-25-017328_d926210dex991.htm:14]**   
- **Risk Management: $405 million (+52% YoY)**  **[0001193125-25-017328_d926210dex991.htm:14]** **[0000950170-24-013370_ajg-20231231.htm:185]**   
- Net Income: $258 million (vs. -$32 million YoY)  **[0001193125-25-017328_d926210dex991.htm:15]** **[0000950170-24-013370_ajg-20231231.htm:185]**   
- **EPS (Diluted): $1.12 (vs. -$0.16 YoY)**  **[0001193125-25-017328_d926210dex991.htm:15]** **[0000950170-24-013370_ajg-20231231.htm:185]**   
- D&A: $213 million (+12% YoY)  **[0001193125-25-017328_d926210dex991.htm:15]** **[0000950170-24-013370_ajg-20231231.htm:185]**   
- Interest Expense: $102 million (+30% YoY)  **[0001193125-25-017328_d926210dex991.htm:15]** **[0000950170-24-013370_ajg-20231231.htm:185]**   

dbbb99c9c8df34184f7c31e49b7a6ab6f2318f378ad2730727a963c9a57e5c58

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: Q4 2024 and FY 2025
- **Guidance**:
  1. **Brokerage Segment Organic Growth**: 6% to 8% for 2025  **[AJG_3403687_3]** .
  2. **Risk Management Segment Organic Growth**: 6% to 8% for 2025  **[AJG_3403687_4]** .
  3. **Fourth Quarter 2024 Organic Growth**: Around 8% for the brokerage segment  **[AJG_3403687_3]** .
  4. **Full Year 2024 Brokerage Organic Growth**: Around 7.5%  **[AJG_3403687_1]** .
  5. **Fourth Quarter 2024 Risk Management Segment Organic Growth**: Around 7%  **[AJG_3403687_1]** .
  6. **Full Year 2024 Risk Management Segment Organic Growth**: Pushing 9%  **[AJG_3403687_1]** .
  7. **Fourth Quarter 2024 Risk Management Segment Margins**: Around 20.5%  **[AJG_3403687_1]** .
  8. **Full Year 2024 Risk Management Segment Margins**: Around 20.5%  **[AJG_3403687_1]** .
  9. **Fourth Quarter 2024 Brokerage Segment Margin Expansion**: 90 to 100 basis points  **[AJG_3403687_3]** .
  10. **Full Year 2024 Margin Expansion**: About 70 basis points, 90 basis points excluding Buck merger impact  **[AJG_3403687_3]** .
  11. **M&A Capacity for 2024**: Around $3 billion, with another $4 billion for 2025  **[AJG_3403687_4]** .
  12. **Fiduciary Investment Income**: No significant change expected for Q4 from September IR Day estimates  **[AJG_3403687_6]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Brokerage Segment Organic Growth**: 7% to 9% for the full year  **[AJG_3394345_0]** **[AJG_3394345_2]** .
  2. **Risk Management Segment Organic Growth**: Around 9% for the full year, with 7% in the next two quarters  **[AJG_3394345_1]** **[AJG_3394345_3]** .
  3. **Risk Management Segment Margins**: Approximately 20.5% for the full year  **[AJG_3394345_1]** **[AJG_3394345_3]** .
  4. **Brokerage Segment Adjusted EBITDAC Margin Expansion**: 90 to 100 basis points for the second half, leading to about 60 basis points full-year expansion, or 80 basis points without Buck acquisition impact  **[AJG_3394345_2]** .
  5. **M&A Funding**: $3.5 billion for 2024 and $4 billion in 2025  **[AJG_3394345_4]** .
  6. **Investment Income**: Embedding two 25-basis-point rate cuts in the second half  **[AJG_3394345_3]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Brokerage Organic Growth**: 7% to 9% for the full year  **[AJG_3380796_3]** **[AJG_3380796_5]** **[AJG_3380796_1]** .
  2. **Brokerage Segment Adjusted EBITDAC Margin**: 90 to 100 basis points expansion for each of the next three quarters, leading to about 60 basis points full-year expansion  **[AJG_3380796_3]** .
  3. **Risk Management Segment Organic Growth**: 9% to 11% for the full year  **[AJG_3380796_2]** .
  4. **Risk Management Segment Adjusted EBITDAC Margin**: Approximately 20.5% for the full year  **[AJG_3380796_2]** .
  5. **Mergers and Acquisitions**: Strong pipeline with around 50 term sheets, representing $350 million of annualized revenue  **[AJG_3380796_2]** .
  6. **Capital Management and M&A Funding**: $3.5 billion capacity for 2024, over $4 billion for 2025  **[AJG_3380796_4]** .
  7. **Investment Income and Rate Cuts**: Embedding two 25-basis-point rate cuts in the second half  **[AJG_3380796_4]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Brokerage Segment Organic Growth**: 7% to 9% for the full year  **[AJG_3370892_0]** **[AJG_3370892_2]** **[AJG_3370892_5]** **[AJG_3370892_4]** .
  2. **Risk Management Segment Organic Growth**: 9% to 11% for the full year  **[AJG_3370892_1]** **[AJG_3370892_2]** .
  3. **Risk Management Segment Margins**: Around 20% for the full year  **[AJG_3370892_1]** **[AJG_3370892_2]** .
  4. **Brokerage Segment Margin Expansion**: Potential for around 60 basis points of expansion if organic growth is higher  **[AJG_3370892_2]** .
  5. **Impact of M&A on Brokerage Segment Margins**: 40 basis points of pressure due to M&A roll-in, mostly from Buck  **[AJG_3370892_2]** .
  6. **Interest Income Sensitivity**: $5 million impact per rate cut by the Fed per year  **[AJG_3370892_13]** .
  7. **Tax Credit Utilization**: About $150 million worth of tax credits in 2024  **[AJG_3370892_15]** .
  8. **M&A Funding Capacity**: About $3.5 billion capacity for 2024 using free cash and incremental borrowings  **[AJG_3370892_3]** .

c4f5ff9c49502eb877b54f0388a86fb94008e514b79566653f9fe3975e6e5587

| Name                  | Position                                                                 | Start Date | Short Bio                                                                                                                                                                                                 |
|-----------------------|--------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| J. Patrick Gallagher, Jr. | Chairman since 2006, Chief Executive Officer since 1995, President 1990 - 2024 | 1974       | J. Patrick Gallagher, Jr. has spent his entire career with AJG, starting as a Production Account Executive in 1974. He has been CEO since 1995 and Chairman since 2006, bringing 50 years of experience  **[0000950170-24-013370_ajg-20231231.htm:58]** **[0000950170-24-035183_ajg-20240322.htm:10]** . |
| Thomas J. Gallagher   | President since 2024                                                     | 2024       | Thomas J. Gallagher is the President of AJG since 2024. He was previously President of Global Property/Casualty Brokerage Operations from 2017 to 2024  **[0000950170-24-013370_ajg-20231231.htm:58]** .                                               |
| Patrick M. Gallagher  | Executive Vice President, Chief Operating Officer since 2024             | 2024       | Patrick M. Gallagher is the Executive Vice President and COO at AJG since 2024. He was previously Corporate Vice President and President of Property/Casualty Brokerage Operation in the Americas  **[0000950170-24-013370_ajg-20231231.htm:58]** .     |
| Walter D. Bay         | Corporate Vice President, General Counsel, Secretary since 2007          | 2007       | Walter D. Bay has been serving as Corporate Vice President, General Counsel, and Secretary at AJG since 2007  **[0000950170-24-013370_ajg-20231231.htm:58]** **[0000950170-23-002456_ajg-20221231.htm:51]** .                                                                                     |
| Mark H. Bloom         | Corporate Vice President, Global Chief Information Officer since 2022    | 2022       | Mark H. Bloom is the Corporate Vice President and Global CIO at AJG since 2022. He was previously Global CIO at Aegon N.V. from 2016 to 2021  **[0000950170-24-013370_ajg-20231231.htm:58]** .                                                         |
| Joel D. Cavaness      | Chairman, Americas Specialty (Wholesale Brokerage) since 2024            | 2024       | Joel D. Cavaness has been serving as Chairman, Americas Specialty (Wholesale Brokerage) since 2024 at AJG. He has been a Corporate Vice President since 2000  **[0000950170-24-013370_ajg-20231231.htm:58]** .                                         |
| Douglas K. Howell     | Corporate Vice President, Chief Financial Officer since 2003             | 2003       | Douglas K. Howell has been serving as the Corporate Vice President and CFO of AJG since 2003, overseeing the financial operations of the company  **[0000950170-24-013370_ajg-20231231.htm:58]** **[0000950170-23-002456_ajg-20221231.htm:51]** .                                                  |
| Scott R. Hudson       | Corporate Vice President, President of Risk Management Operations since 2010 | 2010       | Scott R. Hudson has been serving as Corporate Vice President and President of Risk Management Operations at AJG since 2010  **[0000950170-24-013370_ajg-20231231.htm:58]** .                                                                           |
| Vishal Jain           | Corporate Vice President since 2016, Chief Service Officer since 2014    | 2014       | Vishal Jain has been serving as Corporate Vice President at AJG since 2016 and as Chief Service Officer since 2014.                                                                                      |
| Christopher E. Mead   | Corporate Vice President, Chief Marketing Officer since 2017             | 2017       | Christopher E. Mead has been serving as the Corporate Vice President and Chief Marketing Officer at AJG since 2017  **[0000950170-24-013370_ajg-20231231.htm:58]** **[0000950170-23-002456_ajg-20221231.htm:51]** .                                                                               |
| Susan E. Pietrucha    | Corporate Vice President, Chief Human Resource Officer since 2007        | 2007       | Susan E. Pietrucha has been serving as the Corporate Vice President, Chief Human Resource Officer at AJG since 2007  **[0000950170-24-013370_ajg-20231231.htm:58]** **[0000950170-23-002456_ajg-20221231.htm:51]** .                                                                              |
| William F. Ziebell    | President of Employee Benefit and Consulting Brokerage Operations since 2017 | 2017       | William F. Ziebell has been serving as the President of Employee Benefit and Consulting Brokerage Operations at AJG since 2017. He has been a Corporate Vice President since 2011  **[0000950170-24-013370_ajg-20231231.htm:58]** .                     |
| Richard Harries       | Director                                                                 | 2024       | Richard Harries was appointed to the Board of Directors of AJG on July 24, 2024. He has over 35 years of experience in the insurance industry  **[0001193125-24-184856_d841953dex992.htm:0]** **[0001193125-24-184856_d841953d8k.htm:2]** .                                                     |

77dccecc47a25108a0c440ec2d9411f67912ee51784b216f7c69235f3683c6ba

| Program Details          | Program 1          |
|--------------------------|--------------------|
| Approval Date            | **July 28, 2021**  **[0000950170-24-118320_ajg-20240930.htm:89]**  |
| End Date/Duration        | **No expiration date**  **[0000950170-24-118320_ajg-20240930.htm:89]**  |
| Total additional amount  | **$1.5 billion**  **[0000950170-24-118320_ajg-20240930.htm:89]**  |
| Remaining authorization amount | **N/A** (No specific remaining amount provided) |
| Details                  | The program allows repurchase of common stock at advantageous times and prices through various means. It is flexible with no obligation to repurchase a specific amount and can be suspended at any time.  **[0000950170-22-021298_ajg-20220930.htm:103]** **[0000950170-23-002456_ajg-20221231.htm:54]** **[0000950170-24-013370_ajg-20231231.htm:61]** **[0000950170-24-086937_ajg-20240630.htm:87]** **[0000950170-22-014287_ajg-20220630.htm:99]** **[0000950170-23-056014_ajg-20230930.htm:100]** **[0000950170-23-002456_ajg-20221231.htm:95]** **[0000950170-23-038474_ajg-20230630.htm:85]** **[0000950170-23-018841_ajg-20230331.htm:71]** **[0000950170-23-018841_ajg-20230331.htm:83]**  |

efc3d8c429c77edea4178f175d87a2e14279c5fa844b961db8642d8ffef2ab2e

2e25ef8903cfd53aca3520738952ab410c8defcd5ca90c8a0573d81535f49b54

- **Double-digit organic growth** in reinsurance brokerage is driven by the company's strong capabilities in casualty reinsurance and integrated approach, enabling it to **outperform competitors**.  **[AJG_3413851_27]** **[AJG_3413851_26]**
- **Increased claim frequency and complexity**, particularly in casualty lines, are benefiting the company as Gallagher Bassett can showcase its value to customers, leading to revenue growth.  **[AJG_3413851_23]**
- The company's **superior data and analytics capabilities** are helping it **win new business** and **gain market share** from smaller brokers, contributing to expected **organic growth of 6% to 8%** even without relying on rate increases.  **[AJG_3413851_25]**

a94456ffeca4604825936cf85de32e2ce1def0c32662c46106ba1e2a708de576

- **Slowing International Retail Brokerage Growth**: Gallagher's international retail brokerage growth continues to cool off, with Canada experiencing a decline of a couple of percent, impacted by lower contingents.  **[AJG_3413851_22]**  Management acknowledged that while some geographies are performing well, the slowdown in Canada affects the overall international retail growth.
- **Potential Margin Pressure from Increased Headcount**: The company plans to add 1,000 or 2,000 employees, and it is suggested that in five years, this number could double.  **[AJG_3413851_12]**  While management believes the business remains scalable, such a significant increase in headcount could pressure margins if revenue growth does not keep pace.
- **Exposure to Catastrophic Events Like California Wildfires**: Gallagher is actively managing hundreds of claims resulting from the California wildfires.  **[AJG_3413851_8]**  This exposure to catastrophic events could impact profitability due to increased workload and potential costs associated with claims management.

ac945254426156a4967e6522df5a5512a8df34bb51079eebc2aba4918bf626d0

1. **Brokerage Organic Growth Outlook**  
   **Q:** Is the 6%-8% '25 brokerage organic growth guidance still expected?  
   **A:** Yes, we reaffirmed the **6%-8%** organic growth guidance for '25, with net new business contributing about half and rate and exposure each about a quarter. This estimate doesn't assume tailwinds from potential casualty rate increases or impacts from wildfires.  **[AJG_3413851_13]** **[AJG_3413851_19]** **[AJG_3413851_25]** 

2. **AssuredPartners Acquisition Impact**  
   **Q:** How will the AssuredPartners deal affect M&A activity and growth?  
   **A:** With minimal overlap in pipelines, we expect AssuredPartners to significantly enhance our tuck-in acquisition activity, especially in regions we're not currently in. Their strong team and pipeline will be highly accretive. The **$1.3 billion** from the green shoe provides extra cash for this pipeline.  **[AJG_3413851_14]** **[AJG_3413851_15]** 

3. **Reinsurance Brokerage Growth Drivers**  
   **Q:** What's driving Gallagher's strong reinsurance brokerage growth?  
   **A:** Our reinsurance brokerage outperforms due to a great sales team, robust analytics, and capabilities in capital management consulting. Integration with our wholesale and retail units offers better insights to primary carriers, contributing to double-digit organic growth.  **[AJG_3413851_25]** **[AJG_3413851_26]** 

4. **Contingents and Supplementals Variance**  
   **Q:** Why were contingents lower this quarter, and what's the outlook?  
   **A:** Contingents were lower by about **$7 million** due to slightly higher loss ratios from carriers and underperformance in three Canadian contracts. However, this isn't a trend, and we expect contingents to bounce back, with annual growth combined at about **8%**.  **[AJG_3413851_9]** **[AJG_3413851_10]** **[AJG_3413851_18]** 

5. **Impact of Casualty Reserves on Business**  
   **Q:** How does adverse development in casualty affect Gallagher Bassett?  
   **A:** Increased claim activity helps us as we get paid per claim. As claims become more complex, our capabilities in managing claim outcomes become more valuable to clients, potentially driving growth in our Risk Management segment.  **[AJG_3413851_22]** **[AJG_3413851_23]** 

6. **India Operations and Scalability**  
   **Q:** Do you need to add staff in India post-AssuredPartners deal?  
   **A:** We expect to increase staff in India by additional **thousands** next year due to organic and acquisition growth, even as technology enhances efficiency. This scalability contributes to better margins over time.  **[AJG_3413851_11]** **[AJG_3413851_12]** 

7. **Risk Management Segment Growth**  
   **Q:** Why is Risk Management's organic growth guidance lower for '25?  
   **A:** The business experiences variability due to large contracts ("elephant hunting"). While we guided to **6%-8%** growth, we have promising new business in the pipeline and opportunities in government programs, suggesting potential for higher growth.  **[AJG_3413851_10]** 

8. **International Retail Brokerage Variance**  
   **Q:** How is international organic growth compared to U.S.?  
   **A:** Growth varies by geography. Some regions like Latin America are experiencing strong growth, while Canada saw a slight slowdown. Overall, certain geographies are performing extremely well, contributing to our global growth.  **[AJG_3413851_21]** **[AJG_3413851_22]** 

9. **California Wildfires Impact**  
   **Q:** What is the impact of the California wildfires on operations?  
   **A:** We've reached out to thousands of clients and are assisting with hundreds of claims. While not heavily involved in personal lines there, we'll be busy for months. The full impact on day-to-day activities is not yet determined.  **[AJG_3413851_8]** 

10. **Market Competition and M&A Multiples**  
    **Q:** Does increased M&A activity affect competition for tuck-ins?  
    **A:** Our tuck-in acquisitions continue at attractive multiples, not at elevated levels seen in larger deals. The AssuredPartners acquisition was opportunistic, signaling potential value in the market.  **[AJG_3413851_23]** 

f6c14538bcc2ff8edebc81869a75cf9ba5d7c43535955fe7246e4bb33ffb77e3

AJG posted double-digit reinsurance brokerage gains and reconfirmed 6%-8% organic growth for 2025. Despite Canada softness and planned headcount increases that may pressure margins, its integrated approach and analytics continue to drive outperformance.

3cf1345bc1a43b6711e0ead41c7553438722328e041f86196c57a4aa800c964f

c3dbdb2580c75187577171cce30c734d035ad94e3cbcd6f23e3f51a2dbcb8ee2

**Annual guidance for 2025:**
- **Brokerage Organic Growth**: 6% to 8%  **[AJG_3413851_13]**  (no change from 6% to 8%  **[AJG_3403687_3]** )  
- **Benefits**: 5%  **[AJG_3413851_13]**  (no prior guidance)  
- **Reinsurance**: 9%  **[AJG_3413851_13]**  (no prior guidance)  
- **Risk Management Organic Growth**: 6% to 8%  **[AJG_3413851_10]**  (no prior guidance)  
- **Contingents and Supplementals**: bounce back in 2025  **[AJG_3413851_9]**  (no prior guidance)  

9bdda933181b0ae0fd4b5119d025578f4532288b04c00a9b67061c62c7479c1e

**Quarterly guidance for Q4 2024:**
- **Brokerage Segment Organic Growth**: Around 8%  **[AJG_3403687_3]**  (no prior guidance)  
- **Risk Management Segment Organic Growth**: Around 7%  **[AJG_3403687_1]**  (no change from ~7%  **[AJG_3394345_1]** **[AJG_3394345_3]** )  
- **Risk Management Segment Margins**: Around 20.5%  **[AJG_3403687_1]**  (no prior guidance)  
- **Brokerage Segment Margin Expansion**: 90 to 100 basis points  **[AJG_3403687_3]**  (no change from 90–100 bps  **[AJG_3394345_2]** )  
- **Fiduciary Investment Income**: No significant change expected for Q4 from September IR Day estimates  **[AJG_3403687_6]**  (no prior guidance)

**Annual guidance for FY 2024:**
- **Brokerage Segment Organic Growth**: Around 7.5%  **[AJG_3403687_1]**  (no change from 7–9%  **[AJG_3394345_0]** **[AJG_3394345_2]** )  
- **Risk Management Segment Organic Growth**: Pushing 9%  **[AJG_3403687_1]**  (no change from ~9%  **[AJG_3394345_1]** **[AJG_3394345_3]** )  
- **Risk Management Segment Margins**: Around 20.5%  **[AJG_3403687_1]**  (no change from ~20.5%  **[AJG_3394345_1]** **[AJG_3394345_3]** )  
- **Brokerage Segment Margin Expansion**: About 70 basis points, 90 bps excluding Buck  **[AJG_3403687_3]**  (raised from ~60 bps, 80 bps excluding Buck  **[AJG_3394345_2]** )  
- **M&A Capacity for 2024**: Around $3B  **[AJG_3403687_4]**  (lowered from $3.5B  **[AJG_3394345_4]** )

**Annual guidance for FY 2025:**
- **Brokerage Segment Organic Growth**: 6% to 8%  **[AJG_3403687_3]**  (no prior guidance)  
- **Risk Management Segment Organic Growth**: 6% to 8%  **[AJG_3403687_4]**  (no prior guidance)  
- **M&A Capacity for 2025**: Around $4B  **[AJG_3403687_4]**  (no change from $4B  **[AJG_3394345_4]** )  

21613e0ff146342536e3d02c95ac55e4dc8ba8b458328c516f1c77be5391c09a

4f3c91fbe4a08d40c6487ab35f6d27ddd2c171afc06104ec0af6b7a7b674bf09

| Name               | Start Date | End Date | Reason for Change |
|--------------------|------------|----------|-------------------|
| Ernst & Young LLP | 1973  **[0000950170-24-013370_ajg-20231231.htm:189]**    | Present  | Current auditor   |

54bdaa0ac407f4f7c3cb224648c0b804ef1ca43855ff91711c7026225dc1c32e

9c4e79bb77a668c8b13a526063b05d11a89e2939cdd38b6992d2158494f31181

- Total Revenue: $2,806.8 million  **[0000950170-24-118320_ajg-20240930.htm:42]** **[0000950170-24-118320_ajg-20240930.htm:6]** , up 13% YoY  
- Brokerage: $2,396.4 million  **[0000950170-24-118320_ajg-20240930.htm:42]** **[0000950170-24-118320_ajg-20240930.htm:6]** , up 13% YoY  
- Risk Management: $410.0 million  **[0000950170-24-118320_ajg-20240930.htm:42]** **[0000950170-24-118320_ajg-20240930.htm:6]** , up 11% YoY  
- Operating Income (EBIT): $310.4 million  **[0000950170-24-118320_ajg-20240930.htm:6]** **[0000950170-24-118320_ajg-20240930.htm:56]** , up **113%** YoY  
- Net Income: $312.6 million  **[0000950170-24-118320_ajg-20240930.htm:6]** , up 12% YoY  
- Diluted EPS: $1.39  **[0000950170-24-118320_ajg-20240930.htm:6]** , up 9% YoY  
- United Kingdom: $512.9 million  **[0000950170-24-118320_ajg-20240930.htm:42]** , up 17% YoY  
- Australia: $152.0 million  **[0000950170-24-118320_ajg-20240930.htm:42]** , up **28%** YoY  
- Other Foreign: $141.9 million  **[0000950170-24-118320_ajg-20240930.htm:42]** , up 12% YoY  

89e69ff932df84d8b927d35f7c0ed8d1553efb7475078192c7749366d4375ae9

3969d1cd9cf72684e3b932acacc8b98f4be714c91673dfa7386d98a6116c8fb8

Number of acquisitions closed in the Brokerage segment (count)

Number of acquisitions closed in the Risk Management segment (count)

Number of acquisitions since January 1, 2002 (count)

Workforce at end of period in Risk Management segment (count)

Workforce at end of period in Brokerage segment (count)

a9450376226222e1d9b97ae84ff0083a3fe42df8b4579f8790d38e8bc6064643

| Year | Amount Due (in millions) | Debt Type              | Interest Rate (%) | % of Total Debt |
|----------|------------------------------|----------------------------|-----------------------|---------------------|
| 2024     | $100.0 **[0000950170-24-118320_ajg-20240930.htm:21]**               | Note Purchase Agreement    | 4.72 **[0000950170-24-118320_ajg-20240930.htm:21]**          | 1.2% = (100.0 / 8,332.9) * 100 **[0000950170-24-118320_ajg-20240930.htm:21]** |
| 2024     | $325.0 **[0000950170-24-118320_ajg-20240930.htm:21]**               | Note Purchase Agreement    | 4.58 **[0000950170-24-118320_ajg-20240930.htm:21]**          | 3.9% = (325.0 / 8,332.9) * 100 **[0000950170-24-118320_ajg-20240930.htm:21]** |
| 2025     | $200.0 **[0000950170-24-118320_ajg-20240930.htm:21]**               | Note Purchase Agreement    | 4.31 **[0000950170-24-118320_ajg-20240930.htm:21]**          | 2.4% = (200.0 / 8,332.9) * 100 **[0000950170-24-118320_ajg-20240930.htm:21]** |
| 2026     | $640.0 **[0000950170-24-118320_ajg-20240930.htm:21]**               | Note Purchase Agreements   | 4.36-4.85 **[0000950170-24-118320_ajg-20240930.htm:21]**     | 7.7% = (640.0 / 8,332.9) * 100 **[0000950170-24-118320_ajg-20240930.htm:21]** |
| 2027     | $478.0 **[0000950170-24-118320_ajg-20240930.htm:21]**               | Note Purchase Agreements   | 3.46-4.14 **[0000950170-24-118320_ajg-20240930.htm:21]**     | 5.7% = (478.0 / 8,332.9) * 100 **[0000950170-24-118320_ajg-20240930.htm:21]** |
| 2028     | $200.0 **[0000950170-24-118320_ajg-20240930.htm:21]**               | Note Purchase Agreements   | 4.34-4.55 **[0000950170-24-118320_ajg-20240930.htm:21]**     | 2.4% = (200.0 / 8,332.9) * 100 **[0000950170-24-118320_ajg-20240930.htm:21]** |
| 2031     | $400.0 **[0000950170-24-118320_ajg-20240930.htm:21]**               | Senior Notes               | 2.40 **[0000950170-24-118320_ajg-20240930.htm:21]**          | 4.8% = (400.0 / 8,332.9) * 100 **[0000950170-24-118320_ajg-20240930.htm:21]** |
| 2032     | $69.0 **[0000950170-24-118320_ajg-20240930.htm:21]**                | Note Purchase Agreement    | 4.09 **[0000950170-24-118320_ajg-20240930.htm:21]**          | 0.8% = (69.0 / 8,332.9) * 100 **[0000950170-24-118320_ajg-20240930.htm:21]** |
| 2033     | $350.0 **[0000950170-24-118320_ajg-20240930.htm:21]**               | Senior Notes               | 5.50 **[0000950170-24-118320_ajg-20240930.htm:21]**          | 4.2% = (350.0 / 8,332.9) * 100 **[0000950170-24-118320_ajg-20240930.htm:21]** |
| 2034     | $1,315.0 **[0000950170-24-118320_ajg-20240930.htm:21]**             | Senior Notes & Agreements  | 5.29-6.50 **[0000950170-24-118320_ajg-20240930.htm:21]**     | 15.8% = (1,315.0 / 8,332.9) * 100 **[0000950170-24-118320_ajg-20240930.htm:21]** |
| 2051     | $850.0 **[0000950170-24-118320_ajg-20240930.htm:21]**               | Senior Notes               | 3.50 **[0000950170-24-118320_ajg-20240930.htm:21]**          | 10.2% = (850.0 / 8,332.9) * 100 **[0000950170-24-118320_ajg-20240930.htm:21]** |
| 2052     | $350.0 **[0000950170-24-118320_ajg-20240930.htm:21]**               | Senior Notes               | 3.05 **[0000950170-24-118320_ajg-20240930.htm:21]**          | 4.2% = (350.0 / 8,332.9) * 100 **[0000950170-24-118320_ajg-20240930.htm:21]** |
| 2053     | $600.0 **[0000950170-24-118320_ajg-20240930.htm:21]**               | Senior Notes               | 5.75 **[0000950170-24-118320_ajg-20240930.htm:21]**          | 7.2% = (600.0 / 8,332.9) * 100 **[0000950170-24-118320_ajg-20240930.htm:21]** |
| 2054     | $1,100.0 **[0000950170-24-118320_ajg-20240930.htm:21]**             | Senior Notes               | 5.75-6.75 **[0000950170-24-118320_ajg-20240930.htm:21]**     | 13.2% = (1,100.0 / 8,332.9) * 100 **[0000950170-24-118320_ajg-20240930.htm:21]** |

63a5eca91654cfc018131270288c0802ef887657b6274f2da116813f8e3dafee

1. **Organic Growth Guidance**  
   **Q:** What assumptions underlie the 7%-9% organic growth guidance?  
   **A:** The **7%-9% organic growth** guidance for 2024 assumes current pricing and exposure levels remain consistent throughout the year. Not all business units are expected to be within this range; benefits may be at the lower end, while reinsurance and specialty could be at the higher end. Growth is expected to come roughly equally from new business, rate increases, and exposure growth. **Benefits** might grow closer to **7%**, while reinsurance and specialty could be at **9%** or above (see  **[AJG_3370892_4]** ,  **[AJG_3370892_5]** ,  **[AJG_3370892_12]** ).

2. **Reinsurance Market Outlook**  
   **Q:** How is the reinsurance market evolving, and what is the expected impact?  
   **A:** After navigating a challenging market last year, the company sees continued strength in reinsurance. Pricing remains firm with increased demand. Approximately **45%** of reinsurance business is booked on January 1st, and the favorable market conditions are expected to support growth opportunities in 2024 (see  **[AJG_3370892_15]** ).

3. **M&A Strategy and Impact**  
   **Q:** Has the acquisition landscape changed, and how are recent acquisitions performing?  
   **A:** The company continues successful acquisitions, including larger bank-owned brokers. Recent acquisitions like **Buck** are showing strong organic growth. These acquisitions bring valuable talent and expertise, energizing teams—a phenomenon termed the **"Gallagher effect"**—and creating immediate growth opportunities (see  **[AJG_3370892_8]** ,  **[AJG_3370892_9]** ).

4. **Interest Rate Sensitivity**  
   **Q:** How sensitive is interest income to potential Fed rate cuts?  
   **A:** For every **25 basis point** rate cut by the Fed, interest income could decrease by **$5 million** per year. Approximately **45%** of interest income is from the U.S., with the remainder from international operations, so global central bank policies also impact interest income (see  **[AJG_3370892_13]** ,  **[AJG_3370892_16]** ).

5. **Casualty Market Outlook**  
   **Q:** What is the outlook for casualty pricing and reserves?  
   **A:** Inflation may impact casualty reserves set during periods of low inflation. Carriers are concerned about reserve adequacy, which may lead to price increases over several years as they adjust to inflationary pressures and address potential reserve shortfalls (see  **[AJG_3370892_6]** ).

6. **Contingent Commissions**  
   **Q:** How did contingent revenues perform, and what is the outlook?  
   **A:** Contingent revenues increased by **30%** in the quarter, slightly exceeding expectations due to strong underwriting results. For 2024, contingent revenues are expected to grow within the overall **7%-9%** organic growth guidance (see  **[AJG_3370892_18]** ,  **[AJG_3370892_20]** ).

7. **Risk Management Growth**  
   **Q:** Where is the most growth in claims management coming from?  
   **A:** Growth is driven by large risk management accounts and outsourced claims from insurance companies, both large and regional. Outsourcing claims to the company leads to superior outcomes and can improve insurers' **ROE** by up to **2 points**, contributing to strong performance in the Risk Management segment (see  **[AJG_3370892_17]** ,  **[AJG_3370892_18]** ).

8. **Operating Margins**  
   **Q:** Did incentive comp timing affect Brokerage margins, and what's the impact?  
   **A:** There was slight favorable timing in incentive compensation expenses, but it was anticipated and had minimal impact on margins—less than **one percentage point**—and was included in prior margin expansion guidance (see  **[AJG_3370892_11]** ).

9. **Use of AI and Centers of Excellence**  
   **Q:** Any changes in plans for Centers of Excellence and AI deployment?  
   **A:** The company plans to double the number of employees in Centers of Excellence over the next **5-7 years** as the business grows. Standardized processes enable effective deployment of **AI**, enhancing job quality and efficiency for employees (see  **[AJG_3370892_10]** ).

10. **Earn-out on Willis Re Deal**  
    **Q:** Have you reserved to the maximum on the Willis Re earn-out?  
    **A:** Yes, the maximum has effectively been reserved, with about **$50 million** of accretion to go through the financial statements next year (see  **[AJG_3370892_6]** ,  **[AJG_3370892_21]** ).

11. **Canadian Market Growth**  
    **Q:** Is there a slowdown in Canadian market growth?  
    **A:** The Canadian operations have seen organic growth slow from double digits to around **5%**, which is still strong given past performance. This aligns with market shifts, and similar growth levels are expected in 2024 (see  **[AJG_3370892_20]** ,  **[AJG_3370892_23]** ).

12. **Amortization in Risk Management**  
    **Q:** Why is there an increase in amortization of intangibles in Risk Management?  
    **A:** The increase is due to the recent acquisition of a plan manager in Australia, adding **$60 million** in revenue to the disability business, leading to higher amortization expenses (see  **[AJG_3370892_22]** ).

34530572e5782118afae8ea505eed4a0aeefcbfed3b795aa25d595fca642f880

5c3f1a02f91671263e68c706fc7ddd3eedf13a8d606bbf05df3fc29ed94b2a22

1. **Brokerage Growth Outlook**  
   **Q:** Will brokerage growth slow in the rest of the year?  
   **A:** Management remains bullish on the environment, not seeing a downturn as clients are employing more people and there's robust activity at Gallagher Bassett **[AJG_3380796_5]**. They expect to maintain organic growth in the **7% to 9% range** each of the next three quarters, similar to the first quarter **[AJG_3380796_5]**.

2. **Margin Expansion Guidance**  
   **Q:** Why did margin expansion guidance change from 100 to 90–100 basis points?  
   **A:** The guidance remains consistent at **90 to 100 basis points** of margin expansion **[AJG_3380796_6]**. Any previous reference to 100 basis points was toward the higher end of that range, and the slight difference reflects ongoing investments in the business **[AJG_3380796_6]**.

3. **Impact of FTC Noncompete Rule**  
   **Q:** How will potential removal of noncompetes by FTC impact the company?  
   **A:** Management believes the FTC's proposed rule will have little impact on their business **[AJG_3380796_7]**. Their agreements with staff use nonsolicitation clauses, which they expect to remain enforceable **[AJG_3380796_7]**. They emphasize their strong culture and being a great place to work as key to retaining talent **[AJG_3380796_7]**.

4. **M&A Strategy and Capacity**  
   **Q:** Will you pursue larger acquisitions to utilize $4 billion capacity?  
   **A:** While open to larger deals when opportunities arise, such as the **$1 billion** Wesfarmers acquisition and the **$4 billion** Willis transaction **[AJG_3380796_9]**, management focuses mostly on smaller tuck-in acquisitions among the approximately **29,900** brokers smaller than the top 100 in the U.S. **[AJG_3380796_9]**. They have the capacity to spend **$3.5 billion** this year and **$4 billion** next year on acquisitions **[AJG_3380796_9]**.

5. **California Margins and Noncompetes**  
   **Q:** Are California margins lower due to lack of noncompetes?  
   **A:** Management states that their California margins are not lower **[AJG_3380796_8]**. They've been operating in California for **50 years**, are significant in the market, and their people love working there **[AJG_3380796_8]**.

6. **Property Insurance Pricing Impact**  
   **Q:** Will moderation in property rates affect organic growth?  
   **A:** Property rates increased but at a moderated pace **[AJG_3380796_10]**. Increased demand for coverage, especially in reinsurance, offsets potential rate moderation **[AJG_3380796_10]**. Clients are buying full coverage at higher prices, and exposure values are up, contributing positively to growth **[AJG_3380796_10]**.

7. **Workers' Compensation Trends**  
   **Q:** Any signs of change in workers' compensation pricing?  
   **A:** Workers' compensation remains flat, with no significant changes in frequency, severity, or pricing **[AJG_3380796_12]**. It is "flat as a pancake," according to management **[AJG_3380796_12]**.

8. **Wholesale Brokerage Breakdown**  
   **Q:** Can you provide a breakdown of open brokerage vs. binding within wholesale?  
   **A:** Open brokerage achieved **16%** growth this quarter **[AJG_3380796_11]**. Binding authority business is higher than mid-single digits, at around **10–11%** growth **[AJG_3380796_11]**.

03d217720b1ca330c3c767b3583ef9205603a58d46c1ed1c442997825b71a79a

- **Risk Management segment's organic growth is slowing**, with guidance adjusted to around **9%** for the full year, down from the prior range of **9% to 11%**. This indicates potential deceleration in growth for this segment.  **[AJG_3394345_23]**
- **Contingent commissions may be impacted by uncertainties in casualty reserves**, with the company acknowledging that they are being cautious on casualty and that there could be some adjustments, which might affect earnings.  **[AJG_3394345_16]**
- **M&A activity is below expectations**, with only **$700 million** spent in the first half out of the **$3.5 billion** available for mergers and acquisitions in 2024, suggesting potential challenges in deploying capital for growth.  **[AJG_3394345_7]**

4b00deedf5ef5730a27b166b2c631bcf50cc5e3c85039feae6adf0f5dcf3af53

- **Wholesale organic growth exceeded expectations**, reaching **11%** in the quarter due to a **31% increase in submissions during June**, indicating a continued use of wholesalers and no significant shift back to the primary market.  **[AJG_3394345_5]**
- The **Risk Management segment remains a near double-digit grower**, with growth rates of **12% in '22**, **13% in '23**, and expected to be **around 9%** this year. The company is seeing increasing opportunities in the **$2 million to $10 million** customer segment, with new business sales nearly doubled compared to five years ago.  **[AJG_3394345_17]**
- **Expansion of net new business**, with the spread between new and lost business increasing by a full point year-to-date June. Significant investments of about **$1 billion** over the last **5-7 years** in resources and capabilities are expected to drive better net new business performance.  **[AJG_3394345_11]**

6e9917dce5f282d38fbfa66f9ca1342d3d7042822016538c6ecf819dd57c4b54

- **Arthur J. Gallagher’s growth in Canada has decelerated from double-digit organic growth to around 5%**, potentially indicating market saturation or increased competition.  **[AJG_3370892_23]**
- **The company's benefits business is expected to grow at the lower end of the 7% to 9% range**, suggesting slower growth in that segment compared to others.  **[AJG_3370892_25]** **[AJG_3370892_4]**
- **Reinsurance rate increases may not be as strong as the previous year**, which could limit organic growth in that segment.  **[AJG_3370892_16]**

ec2b8231e0dfabff14e391064bfdc58d390a2a9e4d153de7e1f829559df73859

- **Management remains very bullish on the company's prospects**, expecting to deliver another excellent year of financial performance.  **[AJG_3380796_24]** **[AJG_3380796_19]**
- **Strong organic growth in the Brokerage segment is expected to continue** in the 7% to 9% range each quarter for the full year, driven by robust client activity and a favorable business environment, including higher interest rates and ongoing inflation.  **[AJG_3380796_5]** **[AJG_3380796_19]**
- **Anticipated increases in casualty insurance rates over the next three quarters** are expected to benefit the company, as there is a growing tone of concern around casualty rate adequacy among carriers and clients, potentially leading to higher revenues.  **[AJG_3380796_15]** **[AJG_3380796_19]**

4e243e2d91024c4b22f7392e9fd3a8d776fde069dd96543d9d97c67a715d43b9

1. **2025 Brokerage Organic Growth Guidance**  
   **Q:** What are components of 2025 brokerage organic growth?  
   **A:** The company expects brokerage organic growth of **6% to 8%** in 2025, with half coming from new business exceeding lost business, and the rest split between exposure and rate increases. The benefits business is assumed to grow around **5%**, and reinsurance around **9%**.  **[AJG_3403687_8]** **[AJG_3403687_11]** 

2. **M&A Activity and Pipeline**  
   **Q:** How is M&A pipeline and impact of election year?  
   **A:** The M&A pipeline is strong, with **60 term sheets** prepared representing **$700 million** in revenue. Despite a general slowdown, the company expects a return to a more robust market post-election. Historically, they close a significant portion of such deals.  **[AJG_3403687_12]** **[AJG_3403687_25]** 

3. **Margins and 2025 Outlook**  
   **Q:** Any early margin thoughts for 2025?  
   **A:** With expected **6% to 8%** organic growth in 2025, there is an opportunity for margin expansion. The company plans to leverage scale advantages, technologies, and offshore centers of excellence to improve margins despite wage inflation and other expenses.  **[AJG_3403687_19]** 

4. **Contingent Commissions and Storm Impact**  
   **Q:** Will storms affect contingent commissions?  
   **A:** The company anticipates minimal impact from recent storms, estimating a potential decrease of only **a couple of million dollars**, which wouldn't significantly affect organic growth or contingents.  **[AJG_3403687_10]** **[AJG_3403687_26]** 

5. **Reinsurance Growth and Demand**  
   **Q:** What's driving robust reinsurance growth despite flat pricing?  
   **A:** Strong demand for reinsurance and consulting capabilities is fueling growth. The company is seeing **8% to 9%** organic growth in reinsurance, driven by increased utilization and clients' need for expertise in capacity management.  **[AJG_3403687_21]** **[AJG_3403687_20]** 

6. **Casualty Pricing Trends**  
   **Q:** Are casualty prices increasing?  
   **A:** There is definite concern on casualty pricing across the board. Umbrella rates are rising at about **10%**, and U.S. casualty lines are up a **full point** in Q3 versus Q2. This may lead to some price hardening on the casualty side.  **[AJG_3403687_7]** 

7. **International Growth vs. U.S.**  
   **Q:** How is international retail performing compared to U.S.?  
   **A:** International operations grew **10%** this quarter, led by Australia and New Zealand, which "killed it." The U.S. retail was slightly lower, but overall growth remains strong with no areas of concern internationally.  **[AJG_3403687_9]** 

8. **Life Insurance Sales Impact**  
   **Q:** What's the impact of lumpy life insurance sales?  
   **A:** Life insurance sales added about **1 point** to organic growth. Delays affected Q2 and Q3, but half of that has already been recouped in October. The life insurance business is about **$125 million**, explaining its impact on organic growth.  **[AJG_3403687_5]** **[AJG_3403687_28]**  

9. **Wholesale and E&S Market Trends**  
   **Q:** What's the trend in wholesale and E&S lines?  
   **A:** There is continued strong submission flow into the wholesale operation RPS, with no slowdown. The E&S market is growing and maintaining accounts, with open brokerage and reinsurance organic growth at **8% to 9%**.  **[AJG_3403687_20]** **[AJG_3403687_21]** 

10. **Customer Budgets and Rates**  
    **Q:** How are customer insurance budgets changing?  
    **A:** Budgets are increasing due to growth in exposure units amid a robust economy. Clients are expanding, leading to higher budgets. The company cautions that rates are up (property **4%**, general liability **6%**), and works with clients on coverage and risk retention strategies.  **[AJG_3403687_16]** 

11. **Valuations and Acquisition Multiples**  
    **Q:** Why did acquisition multiples decrease this quarter?  
    **A:** One acquisition was priced below market due to opportunities for improvement, lowering the average multiple. The company emphasizes pricing discipline, aiming for fair prices that balance value and integrating great people.  **[AJG_3403687_14]** **[AJG_3403687_23]** 

12. **Brokerage Organic Growth Decrease**  
    **Q:** Why did brokerage organic growth decrease sequentially?  
    **A:** Despite a slight decrease, underlying organic growth is steady around **7.5%** each quarter when adjusting for seasonality in reinsurance and life insurance sales. Rate differentials are not significant between quarters.  **[AJG_3403687_17]** 

a70b49823f97d74fab47aebcca5a78997d21a258b2fb8d99d2ec2d1a9511fee1

- **Potential slowdown in organic growth in upcoming quarters**: The company acknowledged that **first-quarter growth** was boosted by a **large reinsurance weighting**, and subsequent quarters may have lower growth. "Elyse, we do have a large first quarter and it is heavily weighted to reinsurance. So you would naturally expect us to... maybe the first quarter is a touch above the next 3 quarters..."  **[AJG_3380796_5]**
- **Slight decrease in margin expansion expectations**: The company adjusted margin expansion guidance from **100 basis points to 90-100 basis points** for the next three quarters. "Is it just maybe Q1 was a little bit better... just trying to kind of square the updated out-quarter margin view with what you told us in March?" "Well, listen, I think that the CFO commentary document has kind of said 90 to 100, I think, consistently... So I think our guidance feels about the same."  **[AJG_3380796_6]**
- **Flat performance in Workers' Compensation line**: The Workers' Comp business is "**just as flat as a pancake**," with no signs of growth. "It's really just kind of flat."  **[AJG_3380796_12]**

29e08718d15c2b1b94cf90c17ca4c18c99fdb504a410b83e8bf3273d1bff3d17

- **AJG has a robust M&A pipeline with significant capacity for acquisitions**, expecting continued great opportunities and indicating potential for significant growth through M&A.  **[AJG_3403687_12]**
- **Strong international growth is driving overall performance**, with international operations up 10% this quarter, led by Australia and New Zealand.  **[AJG_3403687_9]**
- **Positive pricing environment in casualty lines is boosting brokerage revenue**, with umbrella coverage rates rising about 10%, and casualty lines up a full point in the third quarter versus the second quarter.  **[AJG_3403687_7]**

2081514d04e416ce098e44b74acc6cfed29858ff6c68cab394a66a5567eee013

- **Increased workforce and lease termination charges due to offshoring and workforce optimization could lead to higher restructuring costs and potential operational disruptions.**  **[AJG_3403687_15]**
- **Competitors are making large acquisitions to improve their middle market capabilities, which may increase competition and pressure on AJG's market share in this key segment.**  **[AJG_3403687_18]**
- **A general slowdown in M&A activity, possibly influenced by the upcoming presidential election, could hinder AJG's growth strategy that relies heavily on acquisitions to drive revenue expansion.**  **[AJG_3403687_12]**

2e7736b61886442e2c881029ef7f9f46ab3df4f0fcf367ca3ae1e7da28d3821c

- **AJG is actively expanding through strategic acquisitions**, including the recent purchase of a **$60 million** revenue disability business in Australia, enhancing their risk management capabilities and contributing to growth.  **[AJG_3370892_22]**
- **Strong performance and expectations in reinsurance and specialty segments**, with AJG projecting these businesses to be at the upper end of the **7% to 9%** organic growth range in 2024, benefiting from increased demand and pricing, and limited competition able to match their capabilities.  **[AJG_3370892_25]** ,  **[AJG_3370892_5]**
- **Superior book of business driving increased contingent revenues**, with contingent revenues up **30% in the quarter**, indicating that AJG's book of business is superior to the competition.  **[AJG_3370892_19]**

d4587cd8d061aa85319fd3e83c7d913efc3b21fdb686f92b01c080df5dac9518

Arthur J. Gallagher & Co. (AJG)

Financials