The broker’s bottom line was helped by a tightening of expenditure
Arthur J Gallagher achieved ‘excellent’ results in the second quarter, despite the economic fallout from Covid, according to chief executive Pat Gallagher.
The Chicago-based firm’s results rose across all areas (see graph below), as the group was lifted by rates across property and casualty rising to the mid-to-high single digits.
Gallagher also tightened its expenditure, such as discretionary spending, to cope with the pandemic-related economic downturn.
| Financial performance | 2020 Q2 | versus 2019 Q2 |
|---|---|---|
| Net revenues | $1.39bn | +5% |
| Net earnings | $ 229m | +39.5% |
| Net earnings per share | $1.02 | +31% |
UK in good shape
Simon Matson, chief executive of UK broking and underwriting, pointed to the UK’s 4% increase in organic growth - ‘a good achievement’.
Simon Matson, CEO of Gallagher UK broking and underwriting, says the firm has made some ‘great senior level hires’
He also stressed that acquisitions, including those in the UK, would play an important part going forward.
“As we reach the mid-year we are reporting positive results for the first half of 2020, and we have achieved organic growth of 4% in the UK over the last three months, which is a good achievement given the ongoing economic uncertainty affecting our clients.
“We have made some great senior level hires in the first half of the year, and have grown our client base across a number of sectors including aviation, sport, and financial lines.
“We have seen a significant uptick in risks and order size coming into the London Market, which historically would have been underwritten by local carriers, as once again London reinforces itself as the place to write challenging and complex business.
“Driven by current economic uncertainty we’ve seen a reduction in capacity in almost all lines, however Gallagher is still able to support clients with even the most complex portfolios thanks to our talented team, strong insurer relationships and global reach.
“Clearly there is still a significant degree of uncertainty but as well as being very much open for hiring talent, we are focusing again on M&A in the UK. Acquisitions will play a key part, and as an independent financially strong global broking group, Gallagher is a great home for smaller businesses, their clients and employees.”
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