Arthur J Gallagher lauds ‘outstanding’ Q2 2019 results plus growth in H1 of the same year
Broker Arthur J Gallagher saw “outstanding” results in the second quarter of 2019, while its half year figures, also ending June 30 2019, showed healthy growth in its brokerage segment.
Results for the company's brokerage segment showed revenues for the first half of 2019 were up 14 percent to $2.5 billion from $2.1 billion for the same period in 2018 (reported GAAP). Organic revenues rose 5.8 percent to $2.2 billion in H1 2019 from $2.1 billion in H1 2018 (adjusted non-GAAP).
Net earnings grew by 22 percent to $447.5 million in the first half of 2019 from $366.7 million for the same period a year earlier (reported GAAP).
The firm’s Risk Management segment reported revenues before reimbursements were up 4 percent to $412.4 million in the first six months of 2019 from $397 million (reported GAAP) in the same period a year earlier. Organic revenues were up 3.5 percent to $404.6 million from $390.8 million (adjusted non-GAAP). While net earnings fell 5 percent to $31.7 million from $33.5 million (reported GAAP figures).
The firm highlighted its “outstanding” second quarter operating performance results.
The brokerage segment reported a 13 percent rise in revenues before reimbursement of $1.1 billion for the second quarter of 2019 compared with $1 billion for the same period in 2018 (reported GAAP). While its Q2 2019 net earnings reached $138 million from $127.5 million in Q2 the year previously (reported GAAP). Organic revenues rose by 5.8 percent percent to $1.01 billion in Q2 this year from $957.5 million in the same period for 2018 (adjusted non-GAAP).
Net earnings for the brokerage part of the business increased by 8 percent to $138 million up from $127.5 million reported in Q2 a year earlier.
In Q2, the Risk Management part of the business saw revenue climb 4 percent to $209.1 million in 2019 from $201.9 million in the same period a year before (reported GAAP). However, net earnings fell by 12 percent to $15.5 million from $17.6 million (reported GAAP). Organic revenues grew by 3 percent to $205.1 million in Q2 2019 from $199.1 million (adjusted non-GAAP).
J. Patrick Gallagher, Jr, chairman, president and CEO, said: “We delivered another outstanding quarter of operating performance and are excited about the remainder of 2019. During the second quarter, we posted excellent total revenue growth, terrific organic revenue growth, strong margins and we completed 13 brokerage mergers with $195 million of annualized revenue.”
He added: “Our mid-year internal insurance rate survey suggests global P&C price increases are approaching 5 percent. Further, around half of our surveyed producers see rates moving higher in the second half of 2019. This is when we excel; our talented production staff is fully engaged helping clients and prospects navigate the challenges of an increasing rate environment."
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