Year founded: 1927
Adjusted revenues in 2017: US$4.6 billion
Employees worldwide in 2017: 26,783
Gallagher: Everything you need to know
Arthur J. Gallagher & Co. and its subsidiaries provide insurance brokerage, consulting, and third-party claims settlement and administration services to entities around the world. Gallagher is the world’s fourth largest insurance broker/risk manager based on revenues, and the largest property and casualty third-party claims administrator globally as of 2017. Its expertise across industries, as well as insurance and risk management solutions, is unsurprisingly vast, ranging from automotive and healthcare to energy and transportation, from management liability and property to cyber and fine arts. Gallagher also has offerings in benefits and HR consulting, captives and alternative risk transfer, and reinsurance, among others.
The company’s client service capabilities span more than 150 countries, a huge expansion from the first family-run agency that was set up in Chicago in 1927 by Arthur Gallagher. Its retail brokerage operations boast 500-plus offices located primarily across North America, the United Kingdom, Australia, Bermuda, the Caribbean, and New Zealand. Its wholesale brokerage operations, meanwhile, count offices in over 65 locations in the United States, Australia and Bermuda, alongside an approved Lloyd’s of London broker.
New name, new chapter
While celebrating its 90th anniversary in 2017, the company announced a rebranding from Arthur J. Gallagher to just Gallagher, though the parent company’s name continues to be Arthur J. Gallagher & Co. In line with the rebranding, the brokerage giant revealed a new logo that replaced the design that had been used since the 1960s.
“The past five years have been transformational for our company. More than 300 merger partners have joined the organisation, which has grown to 26,000 employees across 34 countries,” said Chris Mead, chief marketing officer for Gallagher. “This growth presents us with an enormous opportunity to establish a more unified, compelling retail brand that differentiates us in the marketplace and creates opportunities for the future.”
Shortening the name was also intended to reflect the way in which many Gallagher clients already referred to the company.
90 years in the making
After opening the doors to his own agency, Gallagher’s namesake founder continued to expand the company in the 1930s, hiring two new producers and pioneering the concept of risk management while also focusing on commercial insurance. After the Second World War, Gallagher’s three sons returned from their service in the US Navy and joined the company, foreshadowing the incoming generation of leaders.
Fast forward to the 1970s, Gallagher established its international presence when it co-founded Lloyd’s broker Gallagher, Hinton & Vereker Ltd. in London. In 1975, Gallagher set up an office in Bermuda and later in the year, its team wrote Gallagher’s first self-funded employee benefits plan. Three years later, Gallagher’s revenues reached US$25 million, and, in 1984, Gallagher went public with an initial common stock offering.
The 1990s saw Gallagher forming a domestic wholesale brokerage division and establishing a joint venture in Australia. On its 75th anniversary, Gallagher hit US$1 billion in revenues and was named one of Fortune’s 1000 largest companies.
A frequent acquirer
Between January 01, 2010 and December 31, 2016, Gallagher completed almost 300 acquisitions. By 2016, 34% of Gallagher’s brokerage revenues and 15% of Gallagher’s risk management revenues were coming from outside of the US. In 2017, Gallagher completed 39 transactions, more than half of which were within its US retail P&C and benefits operations, and in the first half of 2018, the company made another 18 acquisitions.
Attracting new talent
J. Patrick Gallagher, Jr., chairman, president and CEO of Gallagher, is passionate about insurance, calling it “the greatest business on Earth,” and wants young people to know that the sector offers great career paths for millennials. The Gallagher Summer Internship Program (GSIP) brings hundreds of the best and brightest college students together each year, and aims to spread the message about insurance.
“The GSIP has been running for 52 years and it still revolves around my grandfather’s mantra that insurance is the greatest business on the planet,” said Gallagher, Jr., himself a GSIP intern back in 1972. “Over the years, we’ve developed a unique method of bringing young people into the insurance industry, focusing on whether they have the right personality, skills and drive to be successful in the industry. We don’t just go for business majors or risk management majors. It’s really about personality and whether we think they would enjoy the industry.”
With the average age of the insurance industry professional falling between 50 and 55 years old, getting younger recruits onboard is key to filling a talent gap looming over the industry.
“One point that seems to resonate with these young folks is that insurance really is there to help people and put people’s lives back together,” Gallagher, Jr. told Insurance Business. “I was in New Orleans seven days after Hurricane Katrina struck in 2005. It looked like an atom bomb had gone off. Look at New Orleans now. The federal government didn’t put that city back together; the insurance industry did.
“When we’re standing outside a burned-down home, we can’t get the valuable photographs back for the homeowner, but we can rebuild the house and help them with living expenses during that process. We help people whose lives have been turned upside down. That message really hits home with the interns.”
In 2018, approximately 440 students participated in GSIP in the US, though hundreds more joined Gallagher hubs spread out across the world. By the end of the program, around 70% are eligible to get a full-time offer and 58% of those potential hires are converted into full-time roles. Those who accept job offers are then part of the three-year training and development program, Gallagher Career Associate Program (GCAP).
“The GCAP has been unbelievably important to our success at Gallagher. It has allowed us to bring young people into the industry, train them to work in the Gallagher way, and teach them vast expertise that covers multiple insurance career paths,” said Gallagher, Jr. “They’re helping us grow organically and they’re bringing exciting new skillsets with them.”