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Arthur J. Gallagher & Co. announced their Q4 and full year 2022 results on Friday and crowed about the successful year they had – especially compared to many of their competitors, which struggled to balance the books.
“We had a terrific fourth quarter, to cap off another excellent year of financial performance,” said J. Patrick Gallagher, Jr., Chairman, President and CEO in the company’s results press statement. “During the quarter, our core brokerage and risk management segments combined to post 16% growth in revenue, of which 11.7% was organic revenue growth. We completed 17 new tuck-in mergers in the quarter and our newly acquired reinsurance brokerage operations finished the year ahead of our pro forma revenue and EBITDAC [which is EBITDA plus coronavirus] estimate.”
The company’s totally reported revenue for Q4 2022 was $1.96 billion.
"For Q4 2022, the pre-tax impact of the Risk Management segment
adjustments totals $(2.9) million."
Investment income and net gains on divestitures for the total company for Q4 were $67.3 million – compared to $37 million in 2021 – and $149.3 million for full year 2022 compared to $102 million in 2021.
Investment income and net gains on divestitures for the brokerage arm for Q4 2022 were $1.4 million and for year ended 2022 were $1.8 million – compared to $0.4 million in 2021.
The statement added that for fourth quarter 2022, the pre-tax impact of the Brokerage segment adjustments totalled $289.5 million, with a corresponding adjustment to the provision for income taxes of $64.9 million relating to these items.
“For Q4 2022, the pre-tax impact of the Risk Management segment adjustments totals $(2.9) million, with a corresponding adjustment to the provision for income taxes of $(0.8) million relating to these items. For fourth quarter 2022, the pre-tax impact of the Corporate segment adjustments totals $0.7 million,” the statement said.
"Our primary carrier partners in many cases are facing higher reinsurance
costs and seeing rising loss costs trends."
Gallagher said that the company’s Global primary P&C renewal premium increases were more than 9% in the quarter, consistent with the first three quarters of 2022, which reflected trends in the market as a whole. “Our primary carrier partners in many cases are facing higher reinsurance costs and seeing rising loss costs trends, so we believe there is good reason to expect continued premium increases. Positive policy endorsements and other mid-term policy adjustments were higher year over year for the seventh straight quarter, indicative of the underlying strength of our P/C clients’ businesses.”
As well as this, Gallagher added that the US’s volatile labour market had been an additional boon.
“The labour market imbalance continues to drive demand for our benefits and HR consulting services, while our risk management segment continues to see rising claim counts from both existing and new clients,” he said. This was likely highlighted as in December 2022, Gallagher acquired HR and employee benefits consultancy and administration company, Buck.
