Arthur J. Gallagher & Co. (AJG) 30 Jan 202019 Q4 Earnings call transcript

Good afternoon and welcome to Arthur J. Gallagher & Company's Fourth Quarter 2019 Earnings Conference Call. Participants have placed on a listen-only mode.

Your line will be open for questions following the presentation. Today's call is being recorded. any may have time. at you if objections, disconnect you this And

statements company of of this statements to in forward-looking during comments are questions, the call, constitute Some risks made given subject conference and to those call to the results may Actual and These securities the these or this company's discussed on Commission. and in laws. the obligation including certain answers reports materially Exchange may from within forward-looking undertakes filed statements. discussed described with update today, meaning the the uncertainties no response Securities differ

In the other measures discussed information Investor the company's Relations for and to on as measures, of these release well refer section please of as addition, the regarding the website. reconciliations in this materials non-GAAP earnings call other

It to my CEO may Arthur J. J. Chairman, Gallagher, Gallagher, & pleasure begin. of Patrick you President Company. Mr. and Gallagher is now introduce

Good fourth as Doug joining Chief Thank of today for is Officer you Howell, you full much. divisions. operating our call. heads me earnings well as and afternoon. XXXX Financial quarter very With Thank our the our for us year

about we the post XX outstanding all The We management we delivered risk high million completed the measures. growth, expanded annualized results $XXX organic representing quarter in of basis XX% to In and finished mergers on XXX note. brokerage combine growth points teams in all revenue. X.X% XXXX a on and revenue, quarter of margins during

completed more about continue of XX an basis in will quarter, all full posted growth, margins This our an and brokerage revenue, momentum that I'm revenue, XX% confident we caps and combined teams risk growth and an this in XX annualized inorganic $XXX off management X.X% year XXXX. outstanding where representing today excellent expanded excellent million mergers points full-year

best around the management I want on relentless the our services to customers Gallagher consulting very thank professional every risk their brokerage, world. insurance delivering for focus to and

believe will fourth if some better results by as I XXXX that quarter segment our peel me to a the and more give good, why be on reason thoughts back Let bit XXXX. not have

drivers Our on strategy. comments today our four focus long-term creation of the value will key

around four growth terms our our four, merger Those -- merger in improving exposures. what our in we're And rate of culture. and all seeing organic which one, pipeline. two, world is Number Number us acquisition including quality. the happen this what productivity are, growth number makes what makes current and bedrock three,

to performance all then of Fourth to with growth Now our was was fee let's we discussed day. IR segment X.X% a and in, base starting December little commission at which wholesale brokerage program, the organic. moved organic over a our repricing growth quarter due that

better we contingents expected But performed than bit exact not close. but offset, a an

growth me geography. breakdown our Let organic by

benefits very operations up strong retail were around domestic our X% and P&C X%. First, were retail above

wholesale and up business domestic about open that's X%. were Our operations, underwriting our brokerage program manager

growth, with Outside exposures the PC change U.S. Australia to X%. be our Zealand continue above renewal operations and organic. comfortably XX% X%. premium up to a than organic more X% around grew Canada UK New rates was our and tailwind and now posted

our about couple domestically you give about workers strongest property for six, in compensation in points. bites about PC are business, X%. up Renewal wholesale retail up few a down is me Let business brokerage the change are open U.S. about the noteworthy the our quarter. wholesale lines Starting and up is up lines while a sound X.X%, casualty X%,

X%. Canada, many professional upward continued around up pressure Moving And is [Indiscernible] to X% business finally close with X%. from but X%, its the of with around lower about across lines in classes. New to about most Zealand X.X% on levels. been to about drifting up which of up X% up property Retails London specialty XXXX up liability, up Australia UK. In is is is XX%

trending for would moved the from PC is past the hard nearly characterize stable certainly having geographies to mid-XXs saw market firm. XXXXs, So years, higher like but I two in we the the after firm, not

survey the XXXX XXXX, in a remains economic nearly PC that rate levels our expanding historically are everywhere our the producers environment. recent momentum Our suggest continued in businesses of clients low at unemployment has favorable further in

should nice a us Taken together continue with these market growth tailwind. conditions provide organic to

mitigate where we're increases. mitigate rate can solutions said, environment develop an in clients that help professionals still creative or That our partially

In ask program only risk percent within two. us up be their or that or a will addition, management to a flat clients budget deliver might

might cetera. certain they coverages, tailwinds limits means our show growth. organic reduce deductibles, words, increased not of in all the rate opt That et out other In up

today, sit growth in might economic see confidence. again especially I upper and X% in take organic deterioration over brokerage don't the here as X% we So I well very XXXX have if range a

about completing of me revenues let million. acquisitions Now another XX quarter quarter and talk average about acquisition had with fourth active merger growth. $XX brokerage We brokerage

Our this Re. merger of Already year four mergers announced XXX% also momentum tuck-in and acquisition ownership to we've and continues. Capsicum moved

be thank new now joining for us. partners of Capsicum of would team. And I all our growing Gallagher to family the professionals. warm I are to a our We fully excited welcome extend And together like very to

$XXX can report quarters prepared. bit XX for activity little or is of little Looking than term shows deal associated last pipeline later first our This be about as being million a quarters. a revenues down forward slower quarter agreed-upon sheets internal the either M&A with around few

in partners and realize that successful attract believe for our that another could continue together. But still year believe I'd tuck-in strong strategy we be acquisition more culture that should be unique and to merger we our XXXX entrepreneurial as

and expanded all brokerage and find higher points EBITDAC increase to contingent the productivity helps Brokerage and expansion This a quarter, to margin of consecutive work is by reflection XXX team marks hard is and this quality. basis Moving of margins the adjusted commissions that quarter efficiencies acquisitions. quality. done XXrd

growth, for expansion an our margin basis year outstanding year representing mergers of of million the XX full all revenue, segment, team. we the adjusted delivered in EBITDAC in brokerage XX we growth up completed for points annualized wrap What to $XXX revenues. XX% So organic brokerage about and X.X%

like Next, move management line our guidance in our to the at IR X.X% Fourth was digit growth we I with solid provided Day. a risk December organic organic to mid-single segment. quarter would

the customized Pricing better results that are business we effective and highlight Underlying But claim range being counts new growing organic saw are workers the recognized handling X% compensation year. as the modest. highly capabilities outcomes. wins general are in claims, in full driving liability for increases

as their We continue to of portion a long-term Gallagher opportunity a carriers operations see for claims great Bassett. outsourcing

be XXXX range. X% organic next X% will year, to risk management in estimate the As we look forward to we

So Bassett EBITDAC really for posted wrap in we in the total of X% risk solid revenue, full mergers growth, adjusted management up three for completed my representing all Gallagher revenue, and $XX XX%, year organic margin comments, about another the team. million year annualized X.X% we of growth

And culture. finally, unique our I'll touch on Gallagher

continues You our can growth. the results see Gallagher that from to we've drive the today, consistent Way shared

help maintain and we do. for culture to our shared encourage push worldwide employees excellence Our values in everything

ethical in eighth Our years XXXX cultures has us consecutive earned running. as company, the world's recognition most

the we Campaign Foundation's second score week, received Rights honor. XXX% Equality is the receive Human this Just This Corporate consecutive Index. top last year we on a also

the seeing and guided been Gallagher XX this I'm stay We've this to this looking proud of by that. been Way decade. of had plus always culture performance the true of I'm and culture am way outstanding quarter, I as the thrive our for unique proud building last in this we've throughout has more culture. we years year last this As forward our all new decade. last

and now Okay. I'll A great Doug. it quarter to fantastic year a and stop Doug? turn the across over board.

Pat, good Thanks everyone. and afternoon

and I finish into dive is to professionals for the especially a to thank make that result, strong to than environment right in the organic is back-to-back Before X% as like our such repeat around a a great year. XXXX. too all I exciting our report world to to here more years would of It growth

If brokerage and risk I posted corporate the step $X.XX, segment and $X.XX. segment our for loss management adjusted back our a our at quarter, segment $X.XX, of our look results

total So of EPS adjusted $.XX.

at EBITDAC in with December our organic brokerage came growth brokerage were page of line over six, and adjusted strong came Day X% expectations margin segment the and page and on five look corporate from on our of even brokerage table expansion the in and you strength the Investor management segment segment When table better. in Risk our organic that you'll see XXX points. margin basis

remaining higher we third of and Of is to mid to that the expansion XXX was recent X% basis points about contingents, a commission third due margin about third in and organic acquisitions base fee environment. a a expect would couple related another seasonality

ensuring on lowering that now of process, that improving clear our our productivity, all through raise the cost while we're focus our quality budgeting our is our Having XXXX it seeing also. benefits we the been constant

by in increasing creative an somewhat. an -- clients, rates teams are it environment where market more cost is environment rates me, where the our work to that solutions, our increasing, our and shop guide It increases develop are excuse takes

analytics addition, investments making marketing building and hire help acquire. and hardening investing ranks In that and producer our substantial capabilities, our we're more data awareness, IT us investments our in and environment, brand in more growing sell other

and costs margins. expand rising these still offset can we However,

investment. and offshore to scale improvements proving years us offset inflation make are and work increases of lead our shift very efforts to yet allow and last excellence standardize steady businesses our Our important can the over to that that wage XX centers and still into

back I our I better If see segment interest XX is impact upper at net, expand XXXX, see XXXX. margin to day we that estimates. other One XX EPS look another small you when the IR get should X% organic XX, like So, our points. range, have the you'll in of than December year on when minority brokerage page to basis

couple gives million that's better. of or the On case. not penny appearance surface s really the But the or a a that dollars

washes like-for-like our that see to so amount if a nothing. can't base You out there's unfavorable numbers, in

So no impact on EPS.

the on pages work really Pat the talk margins posted about think team organic and six Moving that's and XX% performance revenues management we heard lesser this solid the and above I despite to you good seven, quarter. by growth risk segment

we're Looking margins towards in about XXXX range. upper organic we're the optimistic a bit and targeting more XX% also

also management and provide advantages better specialized seen our more scale deliver customers. is to risk allowing outcomes team services claim deeper which Our is for us that

fourth was quarter. this the we December what close during to adjustments IR new quarter, non-GAAP item very the are for most there forecasted As day. for But one our

fourth XXXX dropped the Our tax during filed returns. full state year our when we tax effective quarter rate

filings a for favorable we drop to going These quarters. entity It's primarily some legal did the made and a our But and up earlier out benefit catch due we structure. from amounts changes the adjust year full real triggered reinforcement forward.

a costs the in costs is line. IR Interest lower. Moving significant Clean here from little page now a higher yet day. were corporate earnings corporate better. December release. Nothing of on energy little segment M&A the eight to little our

CFO On So now, the page on you'll for post provided items our see two, look XXXX to that segment. let's move and our to now website. document commentary brokerage related risk at management first have we we

As don't know that mergers of we any the have billion with capacity do an mergers in the you cash providing overall, But and should any estimates another billion CFO to debt. year again this $X.X the commentary in of document. to $X.X future we're we include

debt Our and we today estimates only include today. of borrowed mergers that have as we've by closed that

this So expense arise for make expense, future but start of additional from then items line accretion for expense, for and M&A. estimated with our should you amount amortization an that you mean estimate those earnout each must estimates interest

all year it spent this that amortization So a that quarter, on $X.X M&A example, footnote quarter, about per of we for see one and in let's million equally you'll call X% M&A. should assume if says it do increase $XXX happens dollar billion each

second $X that call $X quarter, the third the and in fourth. an the in $XX So [ph] additional million million in million

$X million quarter $XXX that closed accretion asked for earnout round. just for interest million example. to about As expense. million And $X on that should We grow then a a

in go So our we But by June expense in that for million if $X would interest include estimate on you $XXX that. borrow the and third fourth. $X already up mean assume should XX say million million interest another numbers your

is point and accretion assumptions to also factor Again, non-cash these amortization make for sure My the interest in the simply expense. just examples are for the illustration. M&A

other first tax our Two Capsicum. the commentary. reflect the mentioned on interest, we CFO that owned items expected because -- XXX% much state we of the lower I you'll Noncontrolling now see page earlier. especially And in rate the benefit going quarter, lowered tax tax two forward

the full at added the page look into we we've columns XXXX provides our of Moving that estimates which provided three CFO now day. commentary, light year also our and IR estimates quarterly during updates first December reddish our

note. to matters Two

tax lower that reddish your update you brokerage the risk segment when for tax First, done benefit you'll the need lower segment. update column. our We've in for you rate also corporate a management for in and to state

to geography is actually The total $X.XX company segments. a some there is benefit, between $X.XX but

to that triggered Second, operation, amount a Recall will we our first brokerage of large XXXX. change. that non-core quarter credits XXXX, then XXXX the quarterly large the which a in recognize gain, comparatives XXXX in sold causes early of to

have don't quarter as and sales tax That meaningful of not to XXXX. all first we many will We any anticipating the though in recognizing profits, than also be proportionally different are XXXX. credits XXXX quarters caused

wrap Pat. I'll terrific better to Back for to XXXX. year, quarter up outstanding us out It really up. in Okay. even was an setting year you, a a close here

Thanks year. Doug. Great quarter, fantastic

Let's Operator? go to answers. some questions and

Wells Greenspan is for question. Please [Operator call questions. first open your now with Thank Elyse is Our Instructions] state you. question from coming Fargo. The

evening. Good Thanks. Hi.

Elyse. Hi,

December your your could on guess, Is maybe contingents -- what X% that the organic it that quarter. drove embedded expand guide? the brokerage. upper like was Or what XXXX My trendable? to revenue contingents question could on really is off expectations. guess I strong Pretty on within upside starting seems in this Hi. with within I expecting relative from And you organic you're

Yes.

level I contingents or we drive X.X% then than upside. think little at set, had on and had a X% or did the supplemental higher we It that. base, on the just of bit were X.X% so

X% in in the think talking I we're about being December high range.

detracted did So gave Recall that. heads did we reprice that bit. about, little program a add one that from we it up a you that

in position to we still how as will XXXX. have forward, to or contingents program be contract strong. think loss could is in have see some strong start our on that start going was to it XXXX issue you we're The As problems the compared here ratio softness in

offset hands commissions On the the see if and that's also. kind you'd stronger case, base of the other that

about Can you that down savings forward. about Okay. of talk employee and think about of quarter the some on the the release we how as potential quarters going savings nicely probably improvement And in headcounts should you then, ratio know margin XXXX? expense I press in mentioned guys compensation we think this and XXXX. I modeling most benefit trended for of think just

Yes.

of watched We this some I think we pretty of closely -- we I offshore compensation in in headcount reductions. the amount rather XX we're think the to wave of another same improvement that have the see success. you're the upper from some pretty wouldn't going if gains of harvesting basis margin good I point purely have to X% our in line, see had so centers some We expansion attrition excellence, range. that XX year.

Okay. in come then, all trying to the saw? was a Just fourth aviation business, margins the did you the -- did that on impact big if quarter? the the earnings And on understand

good see acquisitions fourth did of is that in number really But is of you about aviation activity the basis big a a I expansion result quarter, came Yes. supplementals couple acquisition our points comment, my a of when the of in third XXX so, the said the third we the there you from of look acquisitions. basis that a and in from pretty piece recent at that -- XX coming fourth quarter. When the did That that margin of that mid-year you'll is -- from acquisitions. come rolled of points business. rolling came

deals? range deal? Is then above that multiple on of like I that And the transactions, the of you has of it the but M&A that are sized Okay. not up the one much been like think change larger -- smaller seem those The bit, did moved So kind high-end. last your just some didn't still just late. have guys multiple, took question. little deals And the a

That's right.

between the were large X.X about going I think I seven the I maybe have you for I'm and at somewhere remember we deals if think think been or deals of X.X, memory right look it did that around exactly. the those that it X.X, really did if we for -- but I might there that year. and like X were from this rest

our bifurcate higher. right doesn't pipeline that and M&A you multiple -- large push now that have So any that might deals if

color. appreciate Thanks. Okay. I the

Thanks Elyse.

Credit your coming state Our is next Please with question. from Suisse. question Mike Zaremski

Hey. Good evening.

Mike. Hi,

a Follow-up to up follow question. Elyse's

very so the terms seasonality expansion Doug, margin the right, XXXX segment, and So, that's we're persist not from of in healthy that's the in XQ permanent, to going beyond. brokerage acquisitions, -- in

So I want sure? to just be -- make

would That Yes. right. be

quarter, and a year. first but bit second would for So little some I margins the softness there it the be year might the the again have full on first for -- in

yes. So

you're margin. -- then on are those so lighter So if acquisitions saying

-- bit some pressure XQ, the little should on XQ? be go wise points in XQ, expecting So, of saying a you're we some basis forward

might. It

I points, point. it think to XX of if let's XX basis split we're looking at XX call a difference, basis the full-year

in see environment the XX end more be overall a point. and XX up not that at the first basis this you might of basis You XX will points quarter the full points for year. to catch this in full-year in towards But the

the to go Okay. permanent And said Got forward basis? on it. clarify that just point this rate at guidance a tax you

Yes. That's right.

EPS level, your accretion don't Okay. you thank accretion -- in on so higher similar? Got it. be all if should guidance, the like move just whatnot. at versus as color -- And M&A XXXX do well, math to want of getting for the that XXXX multiples of you're a percentage But of high terms amount kind a given to as how and for of earnings you

right. Yes. That's

Okay. All Great. right.

from whole $X.XX year look probably about I at -- think you added share. per if EBITDA our think of last I program

detracts on about EPS, of if lose program because not little and last losing, our look at year, you amortization intangibles. bit it but the you that a So the then

was $X.XX. that $X.XX maybe somewhere around so to And

last $X.XX a one added it basis probably our on we M&A $X.XX basis. somewhere EPS a and bucket as So to share big $X.XX took year a EBITDA per if whole program on around

Okay. Got very it. much. Thank you

Mike. Thanks

Our with from your SunTrust. is Please state Instructions] [Operator Mark Hughes coming question next question.

Thank you. Good afternoon.

Mark. afternoon, Good

The guidance you're higher. mix, you at that? have kept historically risk like number come restrain What in the sounds a its XX%. -- is that in wanted philosophy? change change about business seeing to or the management Is a in little of kind It it driving

more They've it's resolution are of great specialized scale just job adjusting advantages. focus. fact staff field into restructuring really a getting and they think the I a that done the managers

fact purely right back getting to So delivering outcomes. the and are outcomes to that contact the to lower. made specialization, it's are able of It's faster, claim a the group the over terms remarkable work People customer, its with amazing the them or standardization eight point back put at to be has to get the in last seven cost investments years. really work pretty of

So starting this advantages we those come will that through year. think scale

out And then, curious hear you I Pat, if so little, a about this certainly you gives durability? the think your optimism could of why you lay what is it I'm that feel maybe optimistic? in Kind it XXXX. market

do. durability, the that think But right. specific of early better Again, mid that in think I said comments. to I a do I is Mark, XXXXs. terms there's got prepared lines we underwriting in in community This this get in particular no to XXs this by they've Well, than the recognition

wiggle they've with to the are when on You sure sitting saddled portfolio a got there inflation, return not also social ratios. a that it the of -- comes industry huge that to room current combined we has little investment make used historically with inflation. And a really much

away with particular two, some put recognized something years of very they in not amounts people that term. think limits areas terms as companies our of to of exposed that the just the it in needs were short bolstering there's is see need don't what these frankly that's good they kind in need. cheap that And ago, of they same the in I out -- the in property at still going really premium really knowledge marketplace. that I that underwriting firm are and and So to cat three willing go being rates They're areas a that

strength of smaller in that to marketplace. sitting every about in Remember, I talked data if out every amount you just we that bit. there compete, get verticals of with The to XX. literally plus quarter. we're not shouldn't analytics some every capabilities time this every wow, We've continue are. continues And that I to continues somebody get month, we're every a So the saying, our that is with discipline. like and doing quarter, stronger while do And of think our we we along the past grow in stronger just time go XX% the competing grow than today. I'm say I think the time, amount that

These down, Those prices, earnings the and customers some maybe capabilities in cultures. to built nicely got acquisitions join to they're cultures to lot as I they middle better terrific And start ratios. Our people increase meld listening talent. market just in more add in our face entrepreneurial great, the professional sell. that had particular upper a adds don't picture, to have hit to think to receptive and us. we've up strong in coverages, reduction They

look just shine firming, to think in board, across worker's the it's there when same are where continue the these our types is So at at of a softness, but I capabilities time I that place be pockets markets. not going sure, of to comp whole

on that. fees? more much then me might could as fixed of your from opposed appreciate the quickly exposures be to you refresh to sensitive relatively And how revenue comes commissions, I just and pricing

We and point year of the would out. $X fees I Yes. in -- commissions were $X.X of for billion. the did did billion we out

are revenues the a it brokerage commissions. of $X.X So total Call [Indiscernible]. it out of $X billion

Thank you.

Thanks Mark.

from Our state question. question next KBW. coming from Shields your Please is Meyer

if give region? or you of focus lines to of wonder Capsicum's an terms us current I introductory sort as in could of Great. overview Thanks. Pat, business

guys a the -- seen been partnership probably I've -- before really that think owner we second. career. XXX% has de just been I've job. an partial mean, done we And I that These best it Its in was done me up perspective. focus. back really Yes. a were well, have something they my that of let been been novo it's pleased know focus went as I unbelievable literally that's XX-year to by startup the you

So startup get a to it become I of of and just kind amazing in the individual years a XX, this, all friends. into and specifics close effort each operation. Grahame made real at me complete building and was We What out ago not to of was the Chilton Calgary failure. XX

to broker could the one analytics brokers were were that's And important, marketplace. analytics. they at advantage reasons people solid to that the and felt And broke. by of as in by whole that board, amounts to I proved bringing something who supported And it execute they came kind analytics really And of when a same we trying diminishing of are out. that analytics was people eight huge capability the was take opposed ball and was the that Rupert their of found behind I is the think what Graham have as time team a to think

you very, and that strong we grow very, strong business. So very in in and in strong just day cyber. very terms that in strong us of against to build lots very there's auto, verticals competitors in major room again strong that And very international, in very. and in property, continue as out their very just very, see up and core to lots our business. put of And and day doesn't FAC

acquisition a be us. great to think I it's for So going

was Fantastic. Okay. helpful. That

any wholesale quarters? that ball have in question. onetime the does Or is a contract Is future small Second impact -- hit? renegotiated

and be but think the drag second There'll now. right pricing a we've first we little got in quarter,

pretty So good I think in shape. we're

Okay. you Fantastic. Thank much. so

Meyer. Thanks

Peters state [Operator question. Please Raymond Instructions] Our next comes James. Greg question with your from

to up and are change to business. they by pricing certainly maybe many from customers? to willing retention deal with these your see strong you're thought just in a to I'd Do more I've I see environment in Is what it. you any ratios worker's the from place they work comp. guys -- these lines curious I'm you switch carriers? prices? calls to How you reaffirmed it? higher We're afternoon. these brokers customers reacting as hearing your been Good conference listening Do follow more except have requiring in it

I make the because hit happy. I to questions, Well, all not let are me our but clients one, them in get sure number order, try

well As over decade trained an industry reductions. for we a to clients expect

walk than pretty we've So that that to now it's less account and doing easy last renew year XXXX. the is you prices news job since year. are And this been say, in an a when good

you've got kind down flat not when And anymore. They're to to around So is it going XX turn be years it's of you that not say, here way that rates. happy. well, and of

the got it's explain out of of or never renewal market is, be your one going retention that of to market firm type and different. early, and the firming to you've Now large our get it about by thing majority things do and to that real to our question team coaching clients to that about we're operate team a have a really in

like that next is your on So and what you in this no the talk be once retentions I says be But We've to and a about the make the their market phone and that insurance. someone at to to really to bones business. people solid think great with being got a diligent point provides time way. the again own we've to rings with about them client, twice This similar very seen Gallagher causes are along of to type selling difference it. why

even I'm care to and that immediately, easy about can business. It's but think pass competitors. capabilities are facing them it's type it's I and handy our They care look, business. saying don't you our not I'm not competitors doing where of the about that's their explaining saying about And what come our analytic not it thing. They your on same in really

about retentions bones they're I our not So a be get news clients we good if The no is solid disaster. This happy. think we is well. it, handle Make done. will can not it

going If it. We'll need be than to I is what comfortable or contracts million look different that's I That's just what of my say, get The feel cover. was you little it having. XXX a before. require price

so, that playbook. we've out got to And pull

And to Pat, follow up is that. this

retention to hearing because there your I does a switching how effect some have is margin to does carriers more more obviously means work up? which from But very mean basis, profitable and willing how organization? boil in of on that some its just think consider So, wonderful we're mean, is should that their -- do that dropping, -- terms growth than is about of instances that revenue customers the Does you're you're are you ratios Or particular on less for -- granular I customer expansion that I organic that guiding before. in are XXXX. your -- do? how to -- that ever

that. benefits to if it And recommend higher do means to and with in show can one, let's this navigate we'll clients represent carriers about being we we of with and and represent and period partners down Let represent us. in what our you about being do it, retention insurance what We client value this client sit -- I company. where do the statement. clear our order. me the we an we no they're expert. means about business as helping saying, that able our take to and we it our in don't relations means is the change But try that's this. with be there's real the in view one while about them if We how bring client. We from could And benefits our Gallagher questions That's question again both how carriers number and

you real roof. Does it Yes. the because got that mean There's drives to costs Not out more work. be through early. necessarily,

more their are different than naturally calls. to about happening doesn't earlier. they've that used and roll going and better. two got bed it People out easy got umbrella to you're to to million up. bed make to in right phone of bitching now. a got be of get They've ways. track to already not the be on $XX to drive out shoes the fact work That That's see without more They've get costs So having place

our ability proposals, in as The cost locations. some of of in centers the Greg, we the years additional last more that And The of you volume do of things over to lower one have all excellence. invested XX work as know volume we've quotes. labor

the knock off a more might hands with there travel working some needing on the escalation the helps that domestically that accounts. cost top few be maybe So additional

a So that's good show of list we doing, margin the we're why expansion. valve in the and laundry to gave a continue all safety we investments have yet that for can pretty still things business. And make I

core add -- commission When basis quarter, still XX, revenue and XX points XX on expanded our this base look just of at you margin we growth. X.X% fee, XX, XX, base

cost because the kind So lower of without it's good work our still of to quality can there contingents a the for use high the and without have cost. that we're inflation out wages, face is expansion margin that supplementals, we rising seeing really in machine that escalation labor there of locations pump in have rising costs, customers the ability out are without

commentary, pricing to pivot want I your stay want but I to answers. those market the smart for operation. on you Thank to

to in these firming are of And the appetite think market for be And smart curious said the market, of I carriers are had your that market changes changes, that I'm or to as going color there. price. additional lines to that Thank Day you consistent Management business business platform. of the business status on running it as if carriers many Some with market the be going last use smart to your for service. at be I'm seeing on -- update through opportunity is you? approximately the to are growing something was your smart stable market of outlook just market the you it Or maybe the is lines you. like a just XXXX smart certain XX for you of XX is be your it And the on could same year? an us that going the

has is both think some the of of organization that breadth. and to I IT market Smart and strength one digital examples those and of size Thanks. really an scale playing capabilities

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your for you answers. Thank

Thanks Greg.

Wells question Fargo. next comes with Greenspan your Elyse state question. Please from Our

One follow-up question. Hi. Thanks.

on Doug, And credits, that for Do keeping extension. I kind this update case the as of your have I guys credit some clean of think I December. was that one? had extent mentioned year some Investor could beyond start there think XXXX you you you energy the the plans, you the think at the an was XXXX to employees about were we potential the there Day not any in the just expiration. we bills the also at hand but were know there in generate

Yes.

question. great think I

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any So, this But as now. front no Washington progress in have some well. right on maybe we'll summer

Okay. Thank very much. you

Thanks Elyse.

closing remarks. and end turn session. Gallagher And call Patrick Jay the reached for would Mr. the I to have we of like gentlemen, and answer the back to question Ladies

for everyone Thanks us joining this afternoon.

As excited future. you we're can with about and financial tell, performance our I'm extremely our XXXX pleased

and for such for play a to thank colleagues clients Meadows. insurance do risk with finally dedication. hard And Have wrap needs. integral you at with meeting to continued our plus like great and March IR an carrier work partners forward their we speak XX,XXX our We our evening our I'd passion, for Before their trust, who Rolling day clients XXth though, thanks our role in up us. look again management in being and

This does today's conference conclude call.

You may lines your at disconnect this time.