Arthur J. Gallagher & Co. has disclosed its financial results for the quarter and the full year ending December 31, 2023.
In the fourth quarter of 2023, the brokerage segment of Gallagher reported revenues of US$2,051.5 million compared to US$1,704.3 million in the same period of 2022. Net earnings for this segment were US$24.8 million, a decrease from US$143.3 million in the fourth quarter of 2022.
Earnings before interest, taxes, depreciation, amortisation, and changes (EBITDAC) in the segment were US$539.9 million, up from US$457.6 million in the previous year. Diluted net earnings per share were US$0.11, down from US$0.66 in the fourth quarter of 2022.
After adjustments, the brokerage segment's revenues stood at US$2,047.5 million with net earnings of US$445.1 million and EBITDAC of US$646.9 million, indicating a per-share earning of US$2.01. This compares to adjusted revenues of US$1,712.0 million, net earnings of US$357.3 million, EBITDAC of US$532.6 million, and per-share earnings of US$1.65 in the fourth quarter of 2022.
On the risk management segment, Gallagher reported revenues of US$340.4 million, an increase from US$290.6 million in the fourth quarter of 2022. The net earnings for this segment were US$42.3 million, up from US$36.4 million in the previous year, and EBITDAC was reported at US$70.2 million, compared to US$53.8 million in 2022. Adjusted figures for this segment indicate revenues of US$340.3 million, net earnings of US$45.6 million, and EBITDAC of US$71.5 million, with per-share earnings of US$0.21.
The total company, as reported, had revenues of US$2,393.1 million, a notable increase from US$1,995.2 million in the fourth quarter of 2022. However, the company reported a net loss of US$39.6 million, compared to net earnings of US$135.5 million in the same period of the previous year. EBITDAC for the total company was US$514.3 million, up from US$452.1 million in 2022, with a per-share loss of US$0.15.
Adjusted total figures for the company show revenues of US$2,389.0 million, net earnings of US$408.4 million, and EBITDAC of US$669.0 million, with per-share earnings of US$1.85. These adjusted figures compare to revenues of US$2,002.6 million, net earnings of US$321.6 million, EBITDAC of US$530.1 million, and per-share earnings of US$1.49 in the fourth quarter of 2022.
Gallagher’s chairman and CEO J Patrick Gallagher, Jr commented on the financial results, indicating strong performance in the fourth quarter and highlighting the company's growth in revenue, particularly in its core brokerage and risk management segments. The company also completed 14 new mergers during the quarter with estimated annualised revenues of US$410 million.
Looking at the results for Gallagher in the UK, Michael Rea, UK CEO highlighted that the business achieved organic growth of 16% in its specialty division and 8% in its retail division in Q4 2024. The specialty division had an “excellent quarter, capping off an outstanding year”, he said, and saw growth across all six of its key trading teams; energy, aerospace, construction, financial lines, property & casualty and marine.
“Our 4,000 colleagues operating in our UK & Ireland retail division achieved strong organic growth despite the economic headwinds facing many of our clients,” he said. “During 2023, we continued our acquisition journey adding four more firms to Gallagher and building on our specialisms in education, leisure and our expanding business in Ireland.”
He noted that in Q4 2024, Pen Underwriting launched its first presence in Lloyd’s and will diversify this over time from a marine risk focus to include other lines of business that have Lloyd’s distribution. In addition, the underwriting business launched a new intellectual property insurance proposition and expanded into new international territories with its acquisition of the Norwegian firm Fender Marine.
“We continue to attract the very best talent in the insurance sector to Gallagher and in 2023 we welcomed over 1200 new colleagues to our UK team,” he said. “I am exceptionally grateful for the hard work of all of our colleagues. Our team in the UK and the fantastic culture we have at Gallagher is key to our success and I look forward to continuing to grow our business and doing the right thing for our clients in 2024.”
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