Arthur J Gallagher (AJG) has become the latest global insurance brokerage and risk management group to report its financial results for the quarter and year ended December 31, 2020. The group posted net earnings of US$153.1 million (approx. £112 million) for Q4 2020, up from US$105.6 million (approx. £77.27 million) in Q4 2019, while its net earnings result for the whole year reached US$858.1 million (approx. £626.9 million), up from $715.8 million (approx. £523.7 million) for 2019.
Looking closer at the segments which make up the group, AJG revealed how it performed across the board last year:
Brokerage: Net earnings of US$157.7 million (approx. £115.4 million) for Q4 2020, up from US$118.7 million (approx. £86.9 million) in Q4 2019. Net earnings for whole year 2020 reached US$866 million (approx. £633.6 million), up from US$717.3 million (approx. £524.6 million) for whole year 2019.
Risk management: Net earnings of US$19.1 million (approx. £13.98 million) for Q4 2020, up from US$18.3 million (£13.4 million) for Q4 2019. Net earnings for whole year 2020 reached US$66.9 million (approx. £48.9 million), up from US$66.2 million (approx. £48.4 million) for whole year 2019.
Corporate: A net loss of US$23.7 million (approx. £17.3 million) for Q4 2020, reduced from net loss US$31.4 million (approx. £22.9 million) for Q4 2019. The net loss for whole year 2020, however, has increased to US$74.8 million (approx. £54.7 million) from US$67.7 million (approx. £49.5 million) for whole year 2019.
Commenting on the results, chairman, president and CEO of the group J Patrick Gallagher Jr noted the business had delivered an “excellent” quarter as well as strong full-year results during which it generated record profits. Despite the pandemic and the resulting economic fallout, he said, AJG had executed its long-term operating priorities – organic and acquisition led growth, productivity improvement and investments in culture.
“We are operating in a property casualty environment where rates are up around 8% globally, terms and conditions are tightening, and capacity in certain lines is increasingly constrained. We see these market conditions continuing in 2021,” he said. “In addition, we are seeing increased business activity, a recovering labour market, and a rebound in new arising risk management claims. An environment of rising rates and growing exposure units provides a near-perfect opportunity for us to demonstrate that we provide the very best insurance, consulting and risk management advice for our clients.”
Gallagher Jr thanked the staff of the business for their flexibility, hard work and focus on client services. He said he is proud of the group’s collective successes during 2020 and how they have come together even while physically apart.
Meanwhile, commenting on Gallagher’s UK broking and underwriting business results, Simon Matson, CEO, Europe, Middle East and Asia stated that despite the unusual operating circumstances last year, the UK business had performed strongly and achieved 5% organic growth in 2020. Matson also paid tribute to the people who make up Gallagher and said it is the strength of these people, coupled with the global strength of Gallagher and strong industry relationships which had served the group well throughout 2020.
“Looking forward to 2021, we are well placed to continue growing our business,” he said. “We are focused on supporting our clients and we’ve already achieved a key milestone with the agreement to acquire Bollington. We are having encouraging conversations with a number of other businesses which I expect to progress over the coming months.”
