Arthur J. Gallagher & Co. reported robust financial results for the fourth quarter and full year of 2024, marking its 16th consecutive quarter of double-digit revenue growth. The brokerage and risk management firm highlighted strong organic revenue growth, improved margins, and a series of acquisitions, including its pending acquisition of AssuredPartners.
Fourth Quarter 2024 Financial Highlights
- Total revenue: $2.68 billion, up from $2.39 billion in Q4 2023.
- Net earnings: $258.2 million, compared to a loss of $39.6 million in Q4 2023.
- Adjusted EBITDAC: $805 million, a 21.5% increase from Q4 2023.
- Diluted earnings per share (EPS): $1.12, up from a loss of $0.15 in Q4 2023.
- Adjusted EPS: $2.13, compared to $1.82 in Q4 2023.
- Brokerage segment revenue: $2.3 billion, a 12% increase from Q4 2023.
- Risk management segment revenue: $369.4 million, up from $340.4 million in Q4 2023.
- Completed 20 mergers, contributing an estimated $387 million in annualized revenue.
Chairman and CEO J. Patrick Gallagher, Jr. stated, “Our core brokerage and risk management segments combined to deliver our 16th consecutive quarter of double-digit revenue growth, including organic revenue growth of 7%. Our fourth quarter net earnings margin and adjusted EBITDAC margins increased to 13.5% and 31.4%, respectively, and adjusted EBITDAC grew 17%.”
Full-Year 2024 Performance
- Total revenue: $11.4 billion, up from $9.93 billion in 2023.
- Net earnings: $1.47 billion, a 52% increase from 2023.
- Adjusted EBITDAC: $3.57 billion, compared to $2.99 billion in 2023.
- Diluted EPS: $6.50, up from $4.42 in 2023.
- Adjusted EPS: $10.09, compared to $8.70 in 2023.
- Brokerage segment revenue: $9.93 billion, up 15% from 2023.
- Risk management segment revenue: $1.45 billion, a 13% increase from 2023.
Gallagher noted that the insurance market remained strong throughout the year, with renewal premium increases above 5%, particularly in casualty lines such as umbrella and commercial auto. He also pointed out that January 2025 reinsurance renewals were favorable for property and specialty reinsurance buyers.
“Overall, the global P/C insurance market continues to grow with fourth quarter primary renewal premium increases, both rate and exposure combined, consistent with the past two quarters,” continued Gallagher. “Thus far, January 2025 primary renewal premium increases are ticking slightly higher than fourth quarter and are above 5% driven by increases in casualty classes like umbrella and commercial auto. January 1, 2025, reinsurance renewals were orderly and reflected an environment that favored property and specialty reinsurance buyers, while casualty reinsurance programs generally experienced increases.
Strategic Acquisitions
In addition to completing 48 mergers in 2024, Gallagher announced in December the acquisition of AssuredPartners for approximately $13.45 billion. The deal is expected to close following regulatory approvals, funded by an $8.5 billion follow-on common stock offering and $5 billion in senior notes issued in December 2024.
Margin Expansion and Expense Management
- Adjusted EBITDAC margin for Q4 2024 was 33.1%, up from 31.4% in Q4 2023.
- Compensation expense ratio improved by 1.2 percentage points year-over-year due to cost controls and higher interest income.
- Operating expense ratio improved by 1.3 percentage points, reflecting lower integration and real estate costs.
Gallagher concluded, “I would like to thank our 56,000 colleagues across the globe, whose creativity, expertise, and unwavering client focus helped us deliver another excellent year of financial performance. I am very excited about 2025 and beyond!”
