NU Online News Service, May 2, 11:57 a.m.EDT

Arthur J. Gallagher's chief executive says as bad as the newhealth-care law is, it is providing opportunities for the brokerageas smaller benefit brokers are unable to keep up with complianceissues.

J. Patrick Gallagher, chairman, president and chief executiveofficer of AJG, said on a first-quarter-results conference calltoday that he does not care whether the Supreme Court throws thePatient Protection and Affordable Care Act out or not because thedemand for professional services capable of dealing with the newlaw is growing.

Smaller benefit brokers, he notes, do not have the resources todeal with new compliance issues, driving business toward largerbrokers like AJG.

“I've never seen such a selling environment,” says Gallagher, asnew clients seek brokers capable of dealing with the new law. “Thatbusiness is on fire and continues to be.”

Regarding financial results, the Itasca, Ill.-based brokerreports an 84-percent increase in its first-quarter-net profit,beating analysts' earnings-per-share estimates by 1 cent on anadjusted basis.

First-quarter net income was $28 million, up $13 million fromthe same period last year.

Reported revenues rose 22 percent, or more than $99 million, to$547 million.

The firm also registered organic growth of close to 5percent.

The results were helped by a P&C environment where pricesare continuing to increase, but not dramatically as seen in a hardmarket, according to Gallagher

“By and large, we are not seeing decreases,” he says.

Carriers are asking for rate increases, especially on workerscompensation and property business, and they are getting it, hesays. However, some select lines remain competitive, he notes.

“This couldn't be a better environment for us,” he says. “Ifthis environment stays like this for the next few years it willbenefit us.”

Clients' attitudes are also improving as they are beginning tospend more.

“They believe the worst is behind them,” says Gallagher, addingthat he hopes “hiring can't be too far off.”

As further sign of improvement, Gallagher notes that in thefirst quarter the firm acquired 12 agencies, bringing in more than$30 million in revenue, compared to only four acquisitions for thefourth quarter of last year.

The risk-management-services segment, Gallagher Basset, saw itsrevenues increase by 8 percent with organic growth of 7percent.

Gallagher says business in the wholesale markets is also growingas standard-lines carriers back off of risks traditionally handledby wholesalers.