Gallagher Revenue Tops $1 Billion

By Mark E. Ruquet

NU Online News Service, Jan. 30, 12:40 p.m. EST?Arthur J. Gallagher & Co. today reported that revenues for the year 2002 topped $1 billion for the first time in the company's 75-year history.

"The past year has seen some ups and downs, but on balance this has been a breakthrough year," said Patrick Gallagher Jr., president and chief executive officer of the Itasca, Ill.-based insurance broker.

For the year ending Dec. 31, 2002, AJG reported revenues rose $217 million, or 24 percent, to $1.1 billion from $903 million in 2001. Net earnings for the year rose $4.5 million, or 4 percent, going to $129.7 million in 2002 from $125.3 million in 2001. Earnings per share for the year rose 1 percent, to $1.41 from $1.39.

Fourth-quarter revenues rose 23 percent, or $57.5 million, to $311.6 million in 2002 from $254.1 million in 2001. Net income rose 16 percent, or $5.2 million, rising to $38.3 million from $33.1 million. Earnings per share rose 6 cents, or 17 percent, to 42 cents for the fourth quarter of 2002 from 36 cents a share in 2001.

In a conference call, executives for the firm said captive services have seen "explosive" growth as clients look to control their risk costs. Overseas services are also seeing "exceptional results," they said.

Mr. Gallagher said the firm plans to continue its growth by concentrating on finding more niche areas and making acquisitions. He did add that the firm does not have its "fair share" of the large account market and would be looking to make more in-roads into these accounts.

He said customers are balking at paying higher premiums to insurers and are seeking alternative markets. This has resulted in substantial fee growth over commissions for AJG, executives said.

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Gallagher Revenue Tops $1 Billion

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