A broking business in Australia and its US-based parent company have achieved an “outstanding” set of financial results for the second quarter of 2018.
Arthur J. Gallagher (AJG) revealed a 5.9% jump in the organic growth of the broking business, as well as a 59% leap in its overall net earnings for the quarter ended June 30.
Registered net earnings for the broking arm hit US$128 million, compared to US$82.4 million for the corresponding period last year.
“We delivered another outstanding quarter of operating performance and are optimistic about the remainder of the year,” said J. Patrick Gallagher, Jr., chairman, president, and CEO of AJG. “During the second quarter, we generated double-digit revenue growth, organic revenue growth of 6.6% within our core brokerage and risk management segments, completed 12 mergers for nearly $150 million in annualized revenues, expanded margins, and grew total company earnings per share.”
One of its key deals was the Australian business’s recent acquisition of Sydney-based heritage firm Milne Alexander.
The risk-management side of the business saw revenue before reimbursements improve by 11% to more than US$200 million. Organic revenue also rose by more than 10% while net earnings margin rose to 8.7%.
The brokerage also noted premium-price increases around the world.
“Our second-quarter renewal data and our mid-year internal insurance rate survey suggest P&C pricing is up in nearly all lines and most geographies,” Gallagher said. “More than 75% of our survey respondents expect to see modest rate increases continue through the rest of 2018. Modest rate increases, combined with global exposure unit growth, continues to be a favourable back drop for our talented production team to outperform.”
