NU Online News Service, Oct. 28, 9:45 a.m. EDT
Arthur J. Gallagher reported net income increased 11 percent in the third quarter of this year, as organic growth showed positive trends.
The Itasca, Ill.-based insurance broker reported net income rose $4.6 million over the same period last year to $46.2 million, or 44 cents a share. Revenues for the quarter were up 5 percent, or $23.7 million, to $463.2 million.
For the first nine months of this year, net income increased 7 percent over last year, or $7.6 million, to $119.4 million. Net earnings per share increased 2 cents to $1.14. Revenues rose 9 percent, or $111 million, to $1.4 billion.
Organic growth in broker commissions and fees increased by less than 1 percent, or $1 million, in the quarter over last year to $314 million. As a whole, organic growth in commissions and fees, supplemental commissions, and contingent commissions were virtually flat for the quarter, while for the first nine months the broker reported combined organic growth at a loss of almost 2 percent.
During a conference call with investment analysts, J. Patrick Gallagher Jr, chairman, president and chief executive officer, credited the improved results with a lot of hard work from the sales force that has improved retentions. The new health care law also helped the broker, as companies try to navigate the "labyrinth" of regulations it has produced.
Mr. Gallagher said the law is extremely complicated and companies are seeking all the help they can get to comply. He said a recent seminar the broker held on compliance issues resulted in AJG picking up three new clients "on the spot."
"It is not a good law for America, but it is a good law for Gallagher," he said, adding that he has made no secret of his long, personal opposition to the current health care reform plan.
On the subject of insurance rates, Mr. Gallagher said the broker is now at pre-2000 levels, and indicated that he did not believe that such prices are sustainable.
"I don't know when [the market] is going to change, but I'm sure it will," Mr. Gallagher observed.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.