Arthur J. Gallagher & Co. (AJG) 29 Oct 202020 Q3 Earnings call transcript

[00:00:06] Good afternoon and welcome to Arthur J. Gallagher & Co. third quarter Twenty twenty earnings conference call participants have been placed on a listen only mode.

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We statement factors the his ask the questions, including the and risks subject containing and that Web you to of you forward material. gap as the in more my site. could of its regarding It comments investor statements to the detail statement addition, looking other of and Mr. cautionary gathering release materials results these conference security is may to the introduce of and cause the CEO Party companies made as for discussed to or to company's to actual these Some are call, pleasure statement chairman, reconciliations response our during president call, conflicting energy meeting in actually this begin. constitute for earnings on of within that be differ referring Gallagher, uncertainty other company. refer relations and the non risk on may section asking giving may information the measures and Tea well now of

Good quarter. third levels from health to global highest current very health continue you. our quarter on crisis you related the at the a teams our as safety. covid-XX, twenty resulting operating for afternoon. joining our division. third place Despite our Also is us continue the officer, economic we the delivered earnings for call. Doug today well as Thank Twenty slowdown strong call Howell, Thank to financial We while and the [XX:XX:XX] chief heads and of execute

are we business. selling First, new

retaining and clients. We are servicing our

focus keeps niche help our together, merger opportunities, and and is and customers. for they us very capabilities, product on while times and Gallagher management support global customers our challenging apart. way. when our thank look and physically expertize our plus brokerage, professionals to Gallagher XXXX local consulting efforts as bedrock at to these their continue That best navigate are insurance, the like relentless These working specialists professionals our We risk our even acquisition delivering to times. I'd services the culture

excellent our Moving to financial management organically our operating together and the which with has acquisitions risk growth third also These quality. adjust demonstrate us revenues and improve expense while in brokerage our productivity grew third in combined enabled and workforce, to and net EBITDA quarter optimize through base, raising quarter we results efforts, earnings. control our our our quickly performance, mergers our our flexibility, and delivered expense

discuss I'll margin thirty XXX points a that four up XX three up thirty up adjusted percent results Let EBITDA in earnings to Of brokerage basis eight was was more We have three percent me further, was positive percent. segment growth that, reported break favorable earnings timing. down some minute. points margin percent. our growth. and or point four point expanded point basis That percent. our did two half more starting adjusted Net organic revenue four and seven than a [XX:XX:XX] with thirty revenue EBITDA

So a the fantastic pandemic. excellent another by A quarter global job during team.

solid and year than similar about even U.S. Let our business of our our retention slightly Rate to new offsetting policy each are prior cancelations, the brokerage declines. last strong eight more better levels including are retail, year's US some me open of exposure term increases and organic quarter. versus wholesale operations give unit was PC around our And percent. placement better and and modifications, policy risk that. third Mid services full units. walk with four I'll than We start you sound business percent quarter bytes operations brokerage you growth organic world about with in another saw

positive with to Zealand to in growth based combined, organic, return more organic Our two organic Australia UK and percent in to declines than the unit quarter slightly with program Australia. moving two increases percent Vimy around tier Zealand stronger business also New offsetting around stronger two the pricing in businesses are our exposure rate Mejía specialty than firmer due London New

Zealand. It's the down employee percent. environment. This finally, operations decline. was business. our and benefit our moving to large up in mid-September includes sale a product brokerage in work Australia And fourth in posted special New touch Canadian plans positive, covered Otherwise, expected enough offset higher increases business, quarter. expectations, on exposure retail lives but project of there remain organic New And quarter Rate not our operations consulting of reported business life employer a in quarter. excellent end stable and in client we result percent to So third organic organic our global difficult quarter eight new and retention. another the Again, sponsored about funding and terrific the consulting that percent, an soft. [XX:XX:XX] overall, health six four positive, close remains a under to PC insurance can. Well new pension

You headline unemployment need resilient than be to numbers. more

benefits for when bring great quarter. a I big two of percent the EPS and four and benefits together point when organic So even allowing

to forward our year, percent last had Looking a six quarter fourth plus fourth terrific we recall, first quarter organic.

compare. tough a with off starting we're So

full to in I four the new Second, October, line so some percent far than third in I in Retention's cancelations favorable quarter. adjustments other again. discussed slightly just But see thus better third quarter, don't midterm the are policy policy business, PC and hitting timing us here

great would percent Well, environment. governmental in the economic on three can playbook. that strong uncertainty which the be twenty growth. last we year highly organic, We spend we've us full a that can challenge seven containment over makes can a So demonstrated organic and control. another That deliver forecasting can year a [XX:XX:XX] confident quarter nicely would cost range perhaps makes deliver still lot of execute we months we percent of this there's around a and our in full be really two we which year to twenty three

environment rate six With tighter update to nine at eight is greatest terms rate of line Property The higher by PC an the up the third in the continue Canada UK, Zealand, and especially move percent. give about seven the XX remains percent up about quarter it on of rate. percent. capacity including percent up during Call London, the has and followed percent. percent, me globe US conditions by geography, globally. nearly Australia increases more around increasingly than restrained three by seen Again, the let and around Now, New business. strongest, you

liability, level. to up XX professional increases compensation with flat. five umbrella lines up percent, are worker's is XX Next is at rate Other percent. twice that And casualty least

are deductibles, of amount more our of reduced increases out are limits EPS clients rates opting moving higher, the units, So higher modest. clients is total the coverages. of and exposure lower while This result premium are paying

rising carriers Looking and of pandemic, forward, are indicating firm increases Low the are that's catastrophe. to remember, loss we October persist. results for investment already The excel. where But the rates in fourth case making returns the face costs. continued quarter casualty during a

and geographies. year. year one of pockets certain are twenty [XX:XX:XX] last should I are next continuing seeing to better Organic job in more a seeing into sure insurance Our certainly clients price. And market playout. program be we it we today make market some fair is Twenty a lines our see a that at than quarter. than Regardless, hard get difficult well-structured this a is a

Gallagher brokerage new completed growing a and third I'd welcome the acquisitions, our pipeline. thank multiples, our warm to And all professional I to at on if we like M&A extend Moving during for joining fair mergers as five very family, look us. mergers our to quarter, of partners I a

XX than the sheet And pandemic conditions prepared, expertize more for continues and data need are term or dollars fifty have grow. pipeline Difficult to tools. We annualized further revenues. highlighting in million driven and around three being hundred representing signed market of the our

our Our tax more current year platform the to employees fit concerns a it be change. businesses and it to active over feels possible excellent twenty as their Right have their their merger an finish grow use and looking Twenty entrepreneurs like advance tools data support to careers. will one prospects now, for is clients,

to like our Next, to management risk Bassett. segment. I'd move Gallagher

than a day. quarter at five revenue XX quarter EBITDA percent improvement second higher adjusted risk from job management fantastic our bit its our point Third a we September organic is sequential better also what a third nice was million being at by IRR This really organic last delivering And managing minus three down did year quarter team costs, than one percent. workforce nearly and controlling said dollars.

year's but Many Accounts clients rebounded steady September, Looking have seeing to are quarter bottom. in October experienced a of levels. capacity not partial the [XX:XX:XX] still climb trending claim we to operating last counts we at have place. fully forward, second similar yet are out

slightly expense or we organic XXXX. So just means savings. should and better fourth goal on back EBITDA quarter grow we're an we That than fourth due deliver twenty brokerage our quarter. our better full third job just Twenty in to quarter management similar like amazing of the year That's And revenues coming adjusted team. segment, by to in our again risk than a the expect segment EBITDA seeing

Doug, guiding challenging with team global I as pandemic bedrock challenges, and best through it's to service, culture. is together clients. the I believe colleagues times. Before culture pass our Despite unique comments I'll it continue these team our expertize deliver a finish to that to Gallagher advice some very the our our on our

Gallagher Gallagher's global easier hard the OK, we not of difficult emerged and than today's and guide turn cohesive years been stop history, reminded working the have run more difficult I'm way Specifically, in culture. of XX them. and our and Doug. environment solving times. better, I Doug. than to more in can our we it away And us will us. emerge over XX company you Throughout our my from wildfires more stronger It this a from both company. problems, Tenet ever. the will of any Since people tell I hurricanes, other now grandfather believe to have obstacle started pandemic, we clients clients as problems through front I'll for number ago, about

that [XX:XX:XX] our our my too everyone. remarkable times, you Gallagher colleagues seem our excellent while call generating earnings to and job begin and around clients, Thanks, the playbook. with Today, call. during Day doing all servicing to in said some lot quarter. new during get our Pat. of interplay September like with executing crossable express What to another Hello, all a of on appreciation July control our the I our comments Like that a these globe. would organic again challenging are business, Investor questions the I'll cost

on from So more on our and today CFO spend a M&A some little document liquidity. with time and commentary provide that thoughts a finish few and I'll observations cash

page the brokerage table. to release for Sorry, to earnings the organic let's go

fifty million about by As dollars two million to hundred growth. percent, to with turn point in to see to that Pat four EBITDA said, which a organic, great six adjusted dollars one you even and we you when five page the quarter of quarter. all act this Brokerage organic Act, equates grew Then

So from even that at fifty of of million about million divestitures, how do hundred on dollars now, dollars thirty and that five deliver we not a thirteen organic bit fifty first organic. just million dollars million million dollars not one came M&A, of over of

compute. about when segment, see we without means a and math, which but from about a you I is basis by sixty million EBITDA our you'll itself. then margin, margin we grew points, basis were land, little saved cost grew expanded all From the we savings, control even margin XX that to management the the about And expense about impressive backwards, million. easier a about So playbook. million, even XXX XXX adjusted risk do perspective, Revenues that dollars additional points,

dollars consumables labor end benefit medical saved to and advertising we Both XX million XX cost XX September Reduce these IRR Let employee about you me get office in quarter. give second the So breakdown workforce travel, cost XX and of of XX consulting Reduced and and down actions plan and which our provided savings combined. Reduce million during million. million. close and savings. savings, of costs a occupancy the fees [XX:XX:XX] outside day and top about estimates reduced supplies, costs segments, you at dollars about twenty were our four million is reduce about down million. other entertainment professional about consumables, six million, what

a quarter, in more to see slight to Now, towards starting see fourth the increase prospects. and and producers clients producer I look traveling our we're

you the three, utilization midpoint. of our a in in you'll year. favorable. release, plan range And have carryforwards adjustment We looks one it in corporate Brexit. And twenty to and came XX to a in last better. we provided look about twenty eight during energy, moving And to will of big use little our of our in of our Remember, twenty [XX:XX:XX] on than on bit you'll the dollars here currently, our billion of And thereby then XXX executing XX came two. footnote earned. penny in go seeing twenty time September this adjusted based our could at And we better the now million those corporate credits a XX are targeted consistent slightly while our But twenty twenty, gap balance have the lot dollars you'll partners. see for on line get we're will of quarter out Most like when cash instead earnings have estimate on one the harvest quarter continues using when programs about utility Twenty in away earnings year. banking between medical earnings from with September cost are their terms [XX:XX:XX] in But level. those September page a midpoint too. XX page dollars dollar to interest that see XX. expense CFO those are million We page. to more you we Then Baroin related that, a bit website for line marketing that's to segment that that, still are also advertising tax we given six items we forma acquisition the September one back in to be fully a that bit Again, small some even million pro we're on third same XXX on of of on estimate about our provided just better. Twenty twenty The document credit total, on seeing the page see two like preliminary to also line prep return to Day. annual also credits comes clean Sure, two million estimate. forecasting Investor post some cried first savings pennies commentary a line mergers to Then about is cash. relative with Then you'll That that say broker we fourth four, sheet a favorable XXX and see we'll and endemic XX with years. what at and return to in page commentary we twenty and our our XXX investor also that

you strong that M&A, say a really for have As we pipeline. heard

given flurry end between of that taxes. think a could what activity and happen could I be year now with

that. So we're really for positioned well

those facility. quarter, dollars my to a are have well more revolving of you. on billion think We than twenty. for than hand great point and cash more six Back of of I to Ok, the our pull another to a of off we're consisting one twenty team terrific credit power liquidity positioned thanks borrowing XXX billion available million on dollars nearly comment,

questions. [XX:XX:XX] ready think Thanks, Doug I we're and operator, for

[XX:XX:XX] Thank The now questions. few you. is a call

a have you pick question, this one on in your please Pakistan, handset your time. up telephone If at

If an start speakerphone, that ensure function prior sound. one please to disable optimum you're press to on

person my star is starting Bank. question for Deutsche yourself Stefano your may any And Phil with one our questions. first Please you to remove the at proceed question. point, from with two While again from

large product, margin time Yes, quarter any in of to a numbers timing impact that did life there? with any the the start impact fund it any bump the pension one or quick the [XX:XX:XX] question have

XX that organic our XX XX about of of dollars that that we if that million And had you business any one in was that you'd had less or business, of that included more the you're sale XX points get about we growth dollars. assume on million margin No if time million the there. [XX:XX:XX] or on

other less or more no other So what business the than has.

it. got Ok, [XX:XX:XX]

And that be a And little was we're out. your next so we're this initial in felt impacted talk the year stimulus in I seeing remark play was support at better us to bit should you role made comments, to you you might plays I how extent twenty contemplate could the that or about as Twenty that that be which for was twenty hoping a it moving government how least than as mechanism, Twenty in a to year you and organic think through use one?

in summer, terms a huge. bills. to for difference employees their their It of sure an terms a huge quite going into and [XX:XX:XX] and pressure insurance keep got keep just release and honestly, businesses for twenty twenty our Well, was in the giving as it think clients to businesses it of pay we made their ability I and

specific be thoughts And on the that again, business about the economy appreciated. So such. I this? as unfolds Do be you would important investors for know, down how put lot got mean, on believe will I last a do I our should in for of that stimulus expectations this economy very a entire apologize. That one you I a know, to But as chugging individual predicated I which for will it's be question, margin year. contemplate that's of our about you I hope something something it's bill, is brought we is you that that, next unfair should exposure, any and expansion the and our we well positive to how businesses. and extent on so questions or be OK, brokerage But can't know, ball concept number I depending are the and and from know end do but an And not getting the will question of a year. that about question, flat keeps anything and for minds. you new the along, have strong I be viewed economy crystal the think

I but [XX:XX:XX] it's know don't if don't if or not, easy it's an All an I know right. question unfair answer.

can with let help that. you So see if me I

Let's take a know. couple of that things we

as go be we fourth First, of remarks, third here that quarter quarter expense fourth our Then our my one say, should twenty savings first and most question I let's more is, prepared next the the quarter let's to we're hold Twenty when quarter to said one. seeing had able the to out in we now. right in quarter,

know, miracles, see here in what just of than absent fourth much You don't [XX:XX:XX] quarter we're I seeing that quarter. different the

that can hold we're XX So vast. of seeing now, let's say to million that we is the XX savings the finance that, that

to you've Now twenty right to got two. jump twenty, out

So two. let's Twenty just go twenty to

I think our and learned into and in period that for lot our this business we're short are pandemic advantage turning real a a adversity about the Gallagher. We've clients operating.

of over now savings we those believe months, the could XX a we're So next become portion that good permanent. we seeing

million or that So let's call half more. thirty

leaves that to a a hundred most to had out figure in realized have Twenty a you if over be But in. of might annualized for if XX XX to we what not two, here happens we day. what we'll between. fourth to twenty over twenty regardless we'll pandemic. savings savings, get that better somewhere believe that fill in in stick twenty dollars and should million of third a December, answer believe a So there our out the have by answer to really six that, The next I weeks get to and one IRR there of you million, Twenty been XX lies have quarters kind not the one we of better dollar, I to million second, Twenty December answer when of XX could

efforts together relook pulled ways our business we change some has the that of and our it at operate. So to

next through So savings gotten a over go twenty how there twenty six Twenty better be pandemic have on and our own, the where weeks. permanent there as emerges to we our idea that I'll in our a to relative have one. our twenty say, would budget will our without we planning on process are actually let's by

know So I that's we but gets you that right what complete a don't if helps it's partway. hope now. answer, know I

than better perfect. That's It's for. have [XX:XX:XX] Thank I you.

Bill. Thanks, [XX:XX:XX]

[XX:XX:XX] question. Our Please next question is with with your from Fargo. proceed Elyse Wells Greenspan

evening stand little growth [XX:XX:XX] then us Which does on in I right, think it first organic that, on three portion, picking like know, around second question, than the up I my one that Twenty margin through said Twenty Right. feels kind think debate, percent. so should help that he had kind at But twenty. guess you question, up a the of of be twenty revenue better you guys offensive?

quarter, this so And right.

basis points of XXX about margin your of saw improvement revenue You organic by growth.

margin? how of the think So do we Right. component of that

underlying whatever three about that be percent on expenses So next component the margin can of year. they're think we over What's growing organically improvement realized? to should adding

would half you'll [XX:XX:XX] isn't savings, expansion up out in to if to have If have of know, three where think which to a to close all pandemic. full you all I growth percent, percent marching if it's a twenty three that four what you that. gotten the margin to margin think and whatever margin next XXXX, you'll year. dissimilar XX. point And get year. add we're number And organic XXX there's they running percent would back Absent line in to million and in were these a to point, draw see closer point you XXX another a pre we Twenty that half savings XX twenty to get of dollars that maybe Twenty you to be we year of three to we line we a next pretty every between draw quarters

the piece. So the our changed organic hasn't march forward on on base

time off on, percent hundred percent I that quarter? four the mean, or points fifty obviously there basis this saw I one guess, and be seasonality one could [XX:XX:XX] three three that Was you more anything than there was as organic one item. quarterly

expansion savings of are hiring been time this one the organic did pops over to but there out as in [XX:XX:XX] two, look nothing that did at two there out headcount I would quarters Raises that's deferred probably in hasn't whack it have past. it's four me. Well, of that really influence. I other where think think at nothing has point point the we're see Well, point margin quarter, past some you that four percent to a we that not We I in would robust here have might in been to. there's as at

[XX:XX:XX] like questions helpful dollar at this couple the alluded you believe come last then one, modestly day more it, that by deals. to five that looking to I Ok, Twenty that's would activity on a thought larger some million first M&A, was the hasn't I your want to that. say happened. fruition quarter, range

So could of in you maybe to advance some to dangers? right. guess, the in as fourth those get potential guys alluded the done deals, quarter I fruition that That's are you'll that come of

the to between XX [XX:XX:XX] get nearly There wrapped we million We've approval it them end hope and that got on revenue and dollar up the there are due board for nice diligence two of now we're acquisitions year. done with on. the

Ok, [XX:XX:XX] question. last my then and

So as UK. we few think Australia, Zealand, expanded about internationally, the and larger M&A, Canada been New right, a years, it's

equity equity? transaction, to you use you add And going to of looking own your potentially use was your had the it you certain recent deal that the that if to guys if more transaction is so of accretion it perhaps chose revenue, there the be debt? a that than there you was in that have to The another that required a you more market earnings, would Would sizable the were the be or times. consider in fact guys larger sizable does something

to and take at synergies of wants could it. do the traditional we [XX:XX:XX] in tuck we least pick to opportunity of were sure single strategy. is there wasn't one honest, our to merger be that make Yeah, review every to the join this we out that that family. to really, that But our dilutive And that like be

We have that.

and lots on those small We we're that this fair strategy there's that. for into We one better our at paying and in tuck integrate lots We point, of like have for multiples them. much another. opportunity

XX, doesn't [XX:XX:XX] think the another the a So that the in have top you in alone at is, those are of a insurance in XX still you that you I when good to XXX, that portion point. firms there know, of top business baby key States that's United out rest the boomers. world, owned not by are XXX This even maybe that look XXXXX recognize still

ins our the than than these to way, tuck So greater just the opportunity the play. way is do the large than

[XX:XX:XX] Ok, guys. thank Thanks, color. Thanks, I you, appreciate all the Lou. Thanks.

Our Greg Peters your question with is next please [XX:XX:XX] proceed question. James, with from Raymond

Good [XX:XX:XX] afternoon.

a on questions. Just follow of couple

much turn business a EBITDA to, opportunity If where of threshold invest maybe some to do can't had this go you Or basis, you into press margin. percent. business. three you your six of I at chronicling point nine were doing this XX point extend the good a you months, adjusted through or At think, page Doug, five the of percent to, because pointing think six, another you the I release, reported to or through on the beyond what job six savings EBITDA how margin are you And have you you're I margin themselves thirty know, year. you way, adjusted and know where can't point grow that should you it margins you've put the going just hit in you can.

haven't You yet. out it mapped for us just

the to listen, [XX:XX:XX] trees moon. don't No, grow

you there that think when are reach plateaus I them.

And fair to globe, you the XX to pretty But in playing. be that's a its in I brokerage margin that segment in brokerage think a you're this helpful, bring this does you is size, the especially the business same advantages. know, size fairway can is is a an get margin when type percent have. that scale annual showing XX across that as range into

centralization that our percent fairway you using are if years, still improvement growing down using right of we've that steady and roll the have If excellence, we three our centers or for that XX offshore nice, opportunity more of the over middle there's technologies and can on we've percent. developed, four to think worked acquisitions get we're the margin in us terrific for

eke can you because of a out be can there margin scale. think I just little

inflation, are check, a the people inflation know, bit. And company. the on lucky perhaps in people mean, that you Great And, little in so wage will I here remained depends a we a are that we company. wage that after pandemic we check in too. But inflation are wage Recession keep

raises we know, want to you are give. that something So,

And we out margins. I keep think so you inflation eke in wage that if check, can can some

of [XX:XX:XX] do one? second when that Just follow up increases as happen third a or quarter, late hit Is staff? salary kind a midyear generally of that beginning when event do the that typically Does for comment, early to the year quarter? wage event,

little later this year. It's December. We'll do in [XX:XX:XX] that here a bit

just [XX:XX:XX] in at premiums the are, point expected the Got up sheet, anything know, some that curious behind nine The on increase color if point you two the seven plan or six zero in that's looking balance on know, or, that five if just, you I fees I'm balance the four sheet, and is that. two. and from one receivable the end there's you jumped that numbers troublesome noticed versus five I'm know, year it

good OK, question. Yeah, [XX:XX:XX]

for every premium having of slowdown at day. not all we any We're payments our at coming in. look all, First cash receipts

they in equal. And don't report flows again, not is have have there. if liquidity at than pandemic, afternoon and equally, what our So at time. the looked a October pandemic the were pre better cash o'clock I two we issue been this just Since our

at to we reinsurance a premiums have now, payments little that. be customers We that. all So can reinsurance some I operation type can some in there get our that do through and our of volatile flow by is a that that that have more of any nothing that cause would that significant of you in some But there is isn't as slowdown by on it. indicative

DSOs other in the relative remained So to this previous stable have words, [XX:XX:XX] fairly year. year

right. Yes, [XX:XX:XX] that's

that to willing Got are Are help are [XX:XX:XX] it. the around to back know culture, I when Pat, net you growth deals the I I consolidated Or, commentary know, provided M&A know, already organic couple first neutral years, talking or, important consider in guess and have boosted way you're of a it you headwind? has you've to you. have of looking that it's very been you're question, last that. Well, at but that to M&A, basis or opportunities, it know a your know, a they you Does on myself a been or they all, a been organic lot that M&A you the of go I you but is final make? you when gain profile? is another done slower revenue put you've can't

work run and are accounts of people, years. folks this that money gets size make add to are that about love large, a It's care you like we now thing Greg, And lots chance But are absolutely there's really local to that sophisticated. it I they frankly, headwind. and or I'd got think about of them, really you've they I to and heard you and out with them the with more there, seeing all because for make got communities. strong know, been rest themselves, they're it's critical. them. are now. to Certainly that, terrifically touch of they not in can tuck in instances, brain like, that them opens you this when surgery. open they a can if their again, this, when our very the our and curtain we're all for never to up whoa, by you this And here our them nice we're right had sometimes local them able store hasn't We going once If they're not you to get and know, sound And our it's people accounts about the of going opportunities. me But to [XX:XX:XX] for business to hurdle, organization. a if money really And culturally business. the fit to And, we accretive. to we be that on, them the We going And to Rolling But you shareholders. be offices think in that they probably is of I the cross them to open help to Culture be that about try show Meadows they us and right tackle find want line the good excited. followed things talk build bring and tell who us help I've bring join you've when strength ins, to happens, that that can't advantage take nothing their before. they table? one candy because we many is

or really us do And some I there And love a stay the fit. crazy, those people time businesses, sounds us, are being doing does it born a come end fact they with do having they insurance, going but to great selling were down to that which that. building So up great know are it. cultural time, is long of for to us

well, mean what know with store think you But phrase you've before. but used I before, I it meant, the don't I absolutely. word Right, right, it haven't you [XX:XX:XX] used described understood the me, doesn't you've Oh, candy Greg?

obviously piece So in in U.S.? that may going activity any seeing anticipation M&A, know, flow. et of, in around tax in deal cuts, the accelerating you US, the outside yes. change any tax stuff the rates lot change in a cetera, maybe deals you the a final of seeing the you the or in on of lead there's potential flow are Yes, Are the to data of Europe election,

broker scale, we're the where that we look particular, get name people got we've what then there did capabilities. confidence of stay, the XX not and America. something that at we've in a that platform transactions know, when changing you and their Latin to they is and I'll we exactly or, told Canada a smaller in send brand just has the Europe fact our the really getting and we new reports. They benefit tell that you And Australia and recognition June [XX:XX:XX] to got have U.K., in gives we've Once why. got It's now

New in Australia, So, Europe and been. continental Latin yes, America, in Zealand they've pipeline the ever pipeline and U.K., our our are than are stronger

[XX:XX:XX] Got for Thank the you it. answers.

Greg. Suisse. is proceed with next question. with Thanks, from [XX:XX:XX] question Our Mike Please Credit your Zaremski [XX:XX:XX]

think comp what year. [XX:XX:XX] outlook than we you it can thought. were expected from I and still down remarks, maybe update as for improve, the Why? to by Margins more still on Probably double risk the well. continuing the digits risk down. like could guys maybe improve are What talk. year any management but some management Why? sounded Margins bit, than improved can more prepared we about a those put little counts Maybe And you numbers work claims around talk segment?

[XX:XX:XX] maybe more XX you what Yeah, the question is think type lot know, money those the claims? of anyway. make I still small, of that off are down don't kind of to XX is the on I business difficult claims but we that, think the rising a percent churn of

they're kind margin. of low So

much. doesn't us hurt that So so

I think are claims in risen and that a we have that been some complicated claims current because have boost our of there. still had they're of settling a have little bit of

that's business so And that be this has helped more resilient.

the can lost about think margin. as you be profits, of revenue it, you than If by story a a see, lost more might is it it

five held the So on a only on quarter percent revenue advantage that being basis. have pretty is down this we've we well,

hopefully we improve, business things year. have as vaccine, you space as come will as in be, to nicely As know, positive next you well, organic and start a get back that and far into

hearing maybe Brokers' know, are that had prices point limit, are hinted some increases. it the reached maybe well. you a know, freight maybe we're of thinking are know, spaces rate like competitor and coming there's you high capital maybe about [XX:XX:XX] one the And again, from of some into Ok, at back at double it stepping fairly that businesses rate. to and any your kind seeing least, digit you your carriers? And, experiencing competitors feels about about that some its the new the peak of of And suddenly alluded enough and I some getting carriers reached today are any I kind thoughts what think as some you're that,

clearly that new return I that people there is modifying in, mean, rate on rate will there's coming at interest partners zero new any from at that of they're I dollars. Well, the work increases invested the getting not to and we're [XX:XX:XX] capital talking all. you tell

been inflation momentum. is way I Social markets a the raising in it, under attack their coverage This that softening or the head. years are them. Lines that for that to nothing while raise killing of the are continue see of stayed soft, is have stopping

can comp about on flat. remarks. we worker's tried give good in is And cripple sure doesn't And again, do States. for the our to we Now, comp. job clients is in money They to our benefit is hard to from remember, United to some and we our make you the clients everything market remember, make sure competitive detail our that. prepared Workers make workers Workers compensation them.

being here for the sure. actual people of tell sitting the seeing they're that's is the are not know, end Yahoo! by providers when to the capital, to it's the you, the So I But yeah, of light like you this tunnel that getting I'm saying, it's at minute. not We're can harder to to talk something, the you back

and was just great, making that this nothing contingency and sure Ok, unusual supplementals just lastly, Doug [XX:XX:XX] quarter?

not no, all. not at quarter, No, this not this [XX:XX:XX] year

Thank you [XX:XX:XX] very much. Thanks.

one a reminder, your as star keypad. if press has on may anyone you And any [XX:XX:XX] questions, telephone

Hancher question. from Josh with Bank. question your Secrecy is Our next with Deutsche

good evening, Thank taking you [XX:XX:XX] Yes. everyone. call. for my Yeah, Thanks.

broker? the I for fee So you we've And was who carriers from demand of or with given going level? a perhaps is a where are, competitive being negotiation and in and carriers been of curious, have maybe would lot visibility I number Is then guess there benefit benefit a middling it years that in that negotiates it a structure know, that pricing as I on brokers client the on think client there there any disadvantages some historically, renegotiation the to encouraged changing. any market. any and Is at more

our always make completely what And that of in States that percent, would more five fair not same income you, But that underwriting what our going we're that you're business revenue one the have the risk on have the better a a the today. hard And and the to shingle in the in clients be reason look doing since is, feeling even hangs We're get stock rates XX does The quotes. we're getting transaction. a at and person and Officer, can XX jump a percent, would you our that happened, make. fees you're five dedicated if sells that it's that now to XXXX or a inside, of some can time, been this that were real United on we've work. the for work that we when market who's differentiate huge clear expertize there's your out up lot lot approach street community than not that it market. transparent things at and particular, to his with quotes your [XX:XX:XX] selling that's you're pressure stock not to risk we going work you your got hard see we And get today, somebody are on know, that you better another with to extra understanding we you whacked. market

calls. this the chance my our that to to don't like would clients. And for so way market fact recall to always And tower that hard to this perfect gave be say them about you're alluded on And And years. you these I for right, I really It show one we say us And up them one, where valuable this when it the three services to or I expertize. It put down together that chance was and choose. sideways a was more were went conference our rates a markets. XX way, conversations another than the gave are ever. way. flat, able build to up

to market it. some partnering No, in we've and that they've we'll give we're make with to many getting you're seller's forever. counsel get of sure got last knows the got and to And it a clear. respects this them where them understand very time But Now, is they're good through a it's doing. what time now's won't paid

and what that on you or be claims and lower of at home throughput comp how to employment workers without up the can provide about marketplace you shaping changes services And and [XX:XX:XX] work there? talk with Gallagher is Pathic, the

worker's how the in services you all we [XX:XX:XX] have Josh, are going Well, if provide that they're kinds it. of protocol, not the comp There's claim, you're factory, sense not claims a office, clearly handle state to there, rules, fewer not regulations, you're are we're accidents. from When and fewer in the the by you're state home, are And not in etc. claims. working fewer there There and different the reflect that. economic come regains But those to will when hurt, work, you it's rules adjudicate give have activity that which we use still still will Bassett back the claim, you itself people have places of expect of to in and a and you that to better state we terms we gets with adjust claims Gallagher, we deal follow think if someone outcome.

claims, [XX:XX:XX] terms of Cincinnati's. of And flow in

that? broke Josh, sorry up, you was I'm [XX:XX:XX]

the [XX:XX:XX] up? pandemic? Claims incident during How's shaping that during

that's down. that's significantly incidents. down, we reason. are the whole claim counts, about Incidents talk [XX:XX:XX] When That's

know, that at in of what [XX:XX:XX] the that's or or negotiation change messages said. clients interaction the you terms you the can Well, And your look, that we don't change charge in changed things they with we or. regarding all service your the

no, No, [XX:XX:XX] that doesn't at all. we no,

Right. OK. [XX:XX:XX]

[XX:XX:XX] Thanks, you. Josh, thank

with Goldman Yaron Kinar from Sachs. Please proceed [XX:XX:XX] question. your is Our with question next

[XX:XX:XX] thanks one? of lull as think that questions. Hi, as mean and hundred One, impact being bit taking there. a a tax could. little questions, twenty being my timing for good one in into afternoon there's bit Few head like twenty if that here you're the could talking potential Eminem twenty we of one pipeline, I because Do M&A of a you maybe robust

I the brokers private of don't have we're and so. their think in very XX was business, the capitalize that to private not a see, is really you or there when to community look and smart mean I Today been life's you for not bet. of that independent is us. thousands you us know, it, That's going prevalent are I good it has that chance there long equity very I dollar and at because a work equity, market, great [XX:XX:XX] there's I agents which interesting fact a why mean, which ago about is stop. revenue. know, But is billion were few why so brokers. XX it thousands investment think money, telling the that ultimately that's By

us credit XXXX plant clean that. twenty in Ok, one [XX:XX:XX] coal tax the to you then sunset, remind answers when two what and gets the do twenty

some early operate that that command or [XX:XX:XX] affiliate gets quarter Absent could plants in that those those those we quarter. substantial Our don't more could in we for that the a December. operate at third mostly we late late extension own, stop will time sunset early plants off fourth piece of production a our November royalty or an

placed it's Just that XX from in were on date service. depends years the they

bit were then service they would of they earlier. So in be XXXX, if December sunset before little they a placed would

relative just on that's our XX, the commentary, our five CFO to be a you'll just So income royalty because see that that will is forecasting just little page why of earlier. down to of we're of a bit XXXX that little some those sunset

And [XX:XX:XX] clean be of from large Ok, couple months very last of tend don't those year months to coal right? OK. the perspective,

that we've away XX on a a the credits earnings all generating amount last that so and earnings on double in basis basis XXXX that know, might of that cold time. right on December million gap electric XX at And southern harvesting you and years I be. gapper heat, plants the [XX:XX:XX] a I the baseboard to again, can XX it dollars you can't can know, just you know miss been been know, the will the almost you it cash the are dependent versus go, you heat reinforce opportunity that's, of be would to slip can because over to

and brokerage, get does of the third Right, pulled you that the year? into and [XX:XX:XX] that contract quarter question, next the the in then final third quarter timing renewed forward

they we [XX:XX:XX] wouldn't got and of I all, first pulled closed just it sooner. it say Well, forward

next OK product. would it's by sale. an that out. on working was don't I be that repeat work would decide that elephant to would in year. That's quarter be to another and it on hunting been that in smarts close more be But customer and year real So hiddenness. to going third little and they've in something that a that. that It's in this would bit the occasional It guys that that see think happen year product

it call that. So

product You that XX it's every getting that know, who close terrific But be some months, one great. a you momentum. terrific a It's knows? would it's if

little see be happy a So with frequently, we those bit one XX might but every I'd of more month.

[XX:XX:XX] you. Ok, thank

[XX:XX:XX] Thanks Yaron.

next your with Tunis proceed Ryan question. our Autonomous. And [XX:XX:XX] Please is with question from

evening. since since. within have was might the thought [XX:XX:XX] your excluding you on two just ganic benefits had plus And one to that employee one that good included five missed unit percent? employee I I benefits said I the was transaction. but off it the What six,

somebody got point at my one [XX:XX:XX] just looking has I they're else one it notes update. mean, three for on percent. just and look I an

store know, We've three impacted of is business that same the you same of that had for recession. in about brokers. the would the outlook organic been benefits you've Obviously, you still new, economically mid-quarter [XX:XX:XX] employee know, Are the talking at lot consequence the a your quarters other learning quarters updates? is a it in a change of, you kind that anything or previous

where world? get in for first a when a run, we be [XX:XX:XX] and are I probably exported it, around. say, beneficial to learned about how that we over verticals client. mean, learned expertize most our people to world got seven, try have we thing do can I in them class, general last business of can business question you think and that's experts And that the to and the in be this how can look all, what happen, what the to around want the thanks at can the eight we've prospect to months business

people use and today. call They drop days they're can that. video there whole bam, You in by two or of travel can and a up accept day

employees big to So we've we that the pandemic. for that of employed, let go. It's learned long because to you're I we're stay that I even the making the thing floor steel a this March the high recession mean, out. I April, everybody talent, course, But business lot amount the is, your drums. what's of businesses, thought the in holding And going the and our probably their of and benefits drop hit ready, don't care get And I'm is is war Everybody's opportunities with why even so going I'm employer's to term, that. But fact people. incredible. being this reemphasizes facetious. lots product? for ongoing, think of on on there's in if

demands all sure they and come account, You're that not holding our a people incredible by folks. off by make are this, that And to business the to are, employees also saying business balance the need, covers and in floor. the better and what they're And you. we through to out expertize sure the are and it account, of dropped with just understand which makes on you people the me, people make costs providing but their all census's to client, that with fact, it that have communication through even that you as better, with

double to in So it's on down a spot to a want basically it's business. really put us

Thanks. Understood. [XX:XX:XX]

Mayor with question Ryan. question. from Thanks, with Please Shields [XX:XX:XX] our And [XX:XX:XX] last proceed KBW. your

thanks. Great, [XX:XX:XX]

you contract question, benefits the that the the small earlier like a revenue. than feel I of expected, was signed actual I if amount employee of missed Just the can quantify

you Now, million the we XX think was and about that to dollars. math I have probably [XX:XX:XX] XX really it do

do now. math [XX:XX:XX] can the I

[XX:XX:XX] Thanks teacher. it for easy making

long been all? a that second sort tendency moving there's The of over clients at Gallagher, strategy, of question. [XX:XX:XX] interrupted self-insurance Has term I along time. know a

it I employees point that. made to of And a many, full a are you mean, not good you on always of yes, know, makes times fight times why, Bassett in, large know, conversation economy's retention, No, it's do a over program. there's the risk if anything, considering only employees a, businesses and employment. better fact, more those are bringing people. job selling can hired claims there's because heady of and because when in financially, it's Gallagher of management your out insurance entire for your we many over being getting crucial And, better but [XX:XX:XX] businesses good crunching for we those control your outcomes self-insured purchase, And a and

retention, against wall, form all You et they're of good really people put cetera. heritage. into dollar moving risk And management, group buyer a cover ears. a That our from the first is that's captains, our at risk we're

when prices do through up, And now. has their is a gets that comp really good have their right program customer component increasing self-insurance. loss that being we account, go Workers has [XX:XX:XX] self lot pricing as It's willing had Typically, you And rate flat a experience of attention. that of to workers a more cuts as do recently. compensation.

I look think goes restaurants hard, companies or and considerably workers see for that to alternative you'll with goes good comp folks at on experience if think something. more wanting to in dug I

community. the has When the base look wasn't the that to more risk to out that [XX:XX:XX] units to entire really talked dilemma that starts the need XX rate, relatively firm, been soft one during of them of eight better of the this dilemmas buying or market to was was for And carriers the give move I where the about insurance year think they is period flat. market

now over more of community, needing them risk, people they're so to what is best can that maybe do. thins, the rate. units the when leaving And even insurance from because there what the taking that just And fight and better not aren't you're is of thousands units we do competition

just or I million three sense, it's something been expect that divestitures, mean, in incorrectly, gains seasonality Should Ok, second we Final quarter the this and dollars the on question, income brokerage, third makes quarter. was picked investment the perfect model modeling no, like that investment that is of [XX:XX:XX] but and sort to helpful. the very that from up randomness? just

that happened well, the of [XX:XX:XX] have there's investment you're of What we et to running So you with right? But premium Australia me punch cetera. questions, that investment give income, is first, is are two our that New earn on saying, income, Zealand. we down through the through it down some somewhat business numbers with in and accounts, there in income, investment there's some trust let what the line premium do on in just finance

the probably down were four quarter, somewhere from are from in half and third three last We year. a million around dollars, million dollars where we

that, So you would seeing be right?

you. thank for. Thanks very Ok, [XX:XX:XX] helpful, that's

the of reached And the we [XX:XX:XX] have end session. question and answer

over Now we for turn inclusion. back Pat call the to

[XX:XX:XX] Thank you very much.

We you joining professionals efforts really delivered thanks, an year just appreciate navigate year Thank I Gallagher I'd for Again, this again, give a in environment. plus quick that the everybody, XXXXX to being for and of another first confident me deliver it. with like for comment. and a successfully Let we relentless their afternoon. the dedication. us quarter We outstanding can financial excellent us. economic again these difficult our thank of times. nine And challenging and remain months you performance face

this this day. may your does good conclude Thank And today's at disconnect you. you Have call, [XX:XX:XX] a time. lines conference