NU Online News Service, July 27, 12:19 p.m. EDT

Arthur J. Gallagher & Co. pointed to positive signs of growth, saying organic growth was up more than 2 percent and earnings increased in both its brokerage and risk management segments.

The Itasca, Ill.-based insurance broker reported second quarter net income decreased 3 percent, or $1.2 million, to $46.8 million.

Revenues rose 19 percent, or $85 million, to $544 million.

For the first six months of the year, says net income is down 6 percent, or $4 million, to $65 million. Earnings per share dropped 8 cents to 58 cents a share. Revenues rose 7 percent, or $64 million to $990 million.

J. Patrick Gallagher Jr., chairman, president and chief executive officer, speaking to financial analysts during a conference call, was upbeat about the company's performance, citing positive results in organic growth.

“I'm extremely pleased with our second quarter. The results, I think, were terrific. The team really came through in the quarter,” Gallagher says.

Organic commissions and fee revenue in the brokerage segment us up more than 2 percent. In the risk management segment organic fees rose close to 6 percent. Combined organic growth was up close to 4 percent.

“Everywhere I look around our enterprise, our numbers are improving. Most of our businesses across the globe contributed to the quarter,” says Gallagher. “I think these results show that the strategy we have to grow our company is working.”

Discussing the insurance marketplace, he says there are signs of increases across the board, but some accounts still remain extremely competitive. Good accounts will still see reductions, but those reductions are not as large as they were in the past and not automatic, he adds.

AJG closed 13 acquistions during the first 6 months of this year adding a total of $211 million in annualized revenue. Nine of the acquisitions were during the second quater of this year adding $184 million in revenue on an annualized basis.

With the acquisition of Heath Lambert, Gallagher says the firm will be looking at bolt-on acquisitions in the same manger as it has in the United States. He says now is a great opportunity for this strategy, as baby boomers age and seek ways to take economic advantage of the businesses they have spent a lifetime building.

Outside of the United States, United Kingdom and Australia, Gallagher says other areas of acquisition opportunities the firm is looking at is Central and South America.

This story was updated with a correction in paragraph 10 reflecting the correct number of acquisitions for the first six months of 2011.

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Arthur J. Gallagher Says Indicators Point To Positive Growth

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