The greatest business on earth

The greatest business on earth | Insurance Business

The greatest business on earth
A conversation with J Patrick Gallagher Jr is likely to leave one with no doubt as to why insurance is a worthy career path for young job seekers. Gallagher points to Arthur J Gallagher & Co’s own internship program, which his father established in the 1960s.

“We’ll have 300 to 350 interns globally this year,” he says. “We’re introducing young people… and we’re basically saying, ‘You’ve got to look at this incredible industry. You can be an introvert and succeed; you can be the most extroverted salesperson and succeed. If you’re a hardworking, smart person, this is the greatest business on earth.’”

And why does Gallagher believe that’s the case?

“Number one, it’s the most important business. There’s no global trade without insurance,” he says. “Number two, it’s huge. And number three, it’s incredibly lucrative.
I don’t know anybody in my career that was good at this industry that didn’t get to the end of their career with enough money to put their kids through college and to retire comfortably.”

But there’s one aspect of insurance that Gallagher says particularly piques the interest of young people.

“I was in New Orleans nine days after [Hurricane] Katrina,” he says. “It looked like an atom bomb blew up. To put that in perspective, the area of damage, if it had happened in the UK, would have gone from Scotland to the English Channel. The federal government… didn’t put that town back together. The insurance industry put that town back together. And when we have an injured party, we’re the industry that takes them through the hospital and gets them back in their job. When your house burns down, we fix it. So what I say to young people is, ‘What other industry can say that, at the end of the day, what they do is put people’s lives back together?’ And that resonates with young people.”

The family business
Gallagher himself began as an AJG intern in 1972. His grandfather, Arthur James Gallagher, founded the organisation, and his father also worked in the brokerage.

“When I graduated from eighth grade in 1966, I went to work with my dad for a couple of weeks during the summer,” Gallagher says, recalling his time spent working as a file boy. “I came out of that thinking I really liked those people, and it seemed to be an exciting thing to do. My grandfather was also a huge proponent and would always tell me it was the best business on the planet… I guess I’m one of those guys who was lucky enough to find his way early on.”

He began working for the company full time in 1974 as a production account executive, and was promoted to vice president of operations in 1985. He’s been president and CEO of AJG since 1995.

Reflecting on two decades spent in the company’s most senior leadership role, Gallagher identifies three standout achievements.

“I’m very proud of the people I’ve hired throughout my career,” he says. “I’ve been very lucky to make some very good picks. I’m also very proud of what those people have accomplished. One of the greatest blessings of my life is I’ve been at the same place full-time for 42 years, and I’m working with my best friends. That can be challenging, but it’s still very rewarding.”

Finally, Gallagher points to the culture he’s helped build at AJG as one of his proudest accomplishments.

“We do feel like a smaller family enterprise,” he says. “We’ve been able to keep thatculture focused on our core values, which we refer to as the Gallagher Way. Those are the tenets written by my uncle in 1984, as we became public. I travel the world and visit our offices, and I can tell you, whether I’m in an office in Australia or in Denver, that culture hangs together.”

And Gallagher believes that unique culture is what sets AJG apart from its competitors around the world.

“This is a very aggressive company,” he says. “We are out to tell people that they should trade with us, that we’re the best at advising them on their insurance, and we truly believe that. We believe we’re operating in the most important business on the planet.”

But despite outward competitiveness, Gallagher says, “we’ve got a culture of teamwork. We get people who join us through the acquisition process and, within 30 days,
they’re saying, ‘I can’t believe how supportive people are.’”

Today and tomorrow
Discussing today’s landscape, Gallagher agrees with those who say the industry is changing at a faster pace than ever.

“I think it’s a heck of a challenge,” he says, “and that’s a big part of the fun and a big part of the importance we play for our clients in helping them deal with a world that’s becoming riskier, a world that’s becoming closer and closer, and a world where information is attainable literally instantaneously. I think the big challenge in all of that for us is to make sure that we stay very much knowledgeable about the risks our clients face and are very good at continuing to be… the best at helping them handle those risks.”

In spite of the rapid pace of change in the industry, Gallagher says AJG will continue to focus on the same four core areas that have led the company to become the third-largest insurance broker in the world.

The first of those is organic growth.

“We don’t like to lose clients, and we have a very good retention rate,” Gallagher says. “And we go out aggressively to get new clients every day.

“Number two,” he continues, “we want to convince the best operators in our business – in the agency/brokerage/consulting world – to join us through mergers and acquisitions. And believe me, there’s a lot of competition. So when you see us announce an acquisition, they had a lot of choice, and I’m proud that they chose to join us.”

Productivity and company culture round out the company’s other areas of focus. “Those four things are the four pillars of every strategic decision we make,” Gallagher says, “and that’s what we’re focused on.”