In the third quarter, the firm saw its brokerage services net income rise 26 percent, or $8.5 million, from $33.2 million to $41.7 million. Risk management services rose 87 percent, or $4 million, going from $4.6 million to $8.6 million.

In an investors conference call, J. Patrick Gallagher Jr., AJG's president and chief executive officer, said the firm's performance has reached a point "exactly where we thought it would be" through organic growth. He added that AJG had done an "excellent job in a moderating market" getting to where it is.

He said while competition is beginning to heat up, carriers are still exerting discipline in their underwriting and would continue to do so for the foreseeable future. While there will continue to be increases in some lines of business, Mr. Gallagher said carriers are beginning to reassess some accounts and reprice them downward, but not to a point where they will not make an underwriting profit.

"What carriers will not do is take $400,000 in premium when the risk should be written for $500,000," he said.

He noted that placing large commercial accounts is very difficult because not many insurers are willing to take on the risk. He said there are possibly five carriers available to write large business accounts.

In response to a question about benefits services, he called the current rate of inflation in health care coverage "appalling," affecting even AJG. He said it is the biggest issue that needs to be dealt with nationally after terrorism.

For the nine months, AJG's net income rose 6 percent, or $5.5 million, from $91.5 million to $97 million for 2003. Earnings per share rose 4 cents, from $1 to $1.04. Revenues increased 18 percent, or $136 million, from $762.3 million to $898.3 million.