29 October 2014 Insurance

AJG posts strong organic growth for Q3

Arthur J. Gallagher (AJG) enjoyed strong growth in the third quarter of 2014, as the broker saw solid organic growth in its combined brokerage and risk management segments.

The segment had 38 percent growth, of which 7.1 percent was organic growth, in adjusted revenues to $967.2 million, compared with $700.9 million in the same period of the prior year.

Under the accountancy term EBITDAC, which Gallagher defines as net earnings before interest, income taxes, depreciation, amortization and the change in estimated acquisition earnout payables, the broker made $242.6 million, an increase of 43 percent compared with $170.2 million in the third quarter of 2013.

AJG’s brokerage segment posted adjusted revenue growth of 45 percent, of which 5.8 percent was total organic. Its risk management segment posted organic revenue growth of 11.7 percent.

“We had an excellent quarter on all measures,” said J. Patrick Gallagher, chairman, president and chairman. “The integration of our larger mergers continues as planned and on schedule and we are continuing our proven strategy of smaller tuck-in mergers.

“Large or small, our teams are melding quickly and our combined capabilities are creating game-changing sales opportunities around the world. In the rating environment, we continue to see evidence that insurance pricing is rational and we are not seeing evidence of the carriers having any appetite for large rate swings seen in the past. We believe this is a healthy and sustainable environment for our customers, the brokers and the carriers.”

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