Arthur J. Gallagher & Co. (AJG) 2 May 212021 Q1 Earnings call transcript

Good afternoon, and welcome to Arthur J. Gallagher & Co.’s First Quarter 2021 Earnings Conference Call. Participants have been placed on a listen-only mode. [Operator Instructions] Some of the comments made during this conference call, including answers given in response to questions, may constitute forward-looking statements within the meaning of the security laws. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. cautionary XX-Q risk more and its statements. the the contained details to forward-looking XX-K, company’s X-K refer statement factors and in on Please filings for

Chairman, this of you these company’s regarding please website. and of my & in refer President release now measures In the other earnings measures, the pleasure the It J. other Mr. for well as Co. is Arthur reconciliations may discussed addition, Patrick of to the on J. and call to Investor begin. as information section Gallagher, non-GAAP CEO introduce materials Relations Gallagher Gallagher,

Thank you, Good and quarter first joining thank you Laura. for our us afternoon, earnings call. XXXX for

and our acquisitions; to with On third, day-in shareholder continue of fantastic our deliver improved while day-out. the is a second, as our our to our extremely operating quarter. productivity me through We expertise Howell, executed of and our world-class we and and we long-term first, of continues Doug we drive unique divisions. today team to the grew I’m Gallagher fourth, how operating reap priorities against What well call proud culture. we organically; CFO, execute benefits grew four value: heads as our service quality; raising the

great We’re XXXX. a in off to start

than segment. better revenue of growth, XX.X%, growth give So, X% to recent starting with organic an let some expectations, you thanks revenue more Reported March. me our of detail quarter, IR on Brokerage excellent the was Day that, our

EBITDAC and XX%, team. EBITDAC higher and up Brokerage quarter, earnings efforts net basis million the drive helping quarter the our expand margin by an adjusted about XX% points XXX basis margin from were $XX and XX containment up cost by earnings points was excellent saved our adjusted Our net in

about you growth Brokerage In X%. of walk at our some retail was around the U.S., organic about starting give you units, and operations. the our soundbites strong me world with Let each P/C

Open was New business levels Risk In due organic brokerage to Services our was retention and new of about rate retention. higher organic improved wholesale remains strong. U.S. XX% excellent and operations, X%. business Placement was increases,

program’s XXXX. first about Retention were X%. were of the quarter similar business binding MGA to Our in businesses up new

However, we rate from quarter. and more a during little bit see did tailwind exposure the

Moving prior specialty organic for quarter. posted year to steady. over UK, the up X%. the was both Zealand New X% over Australia held In retention retail new organic while our business operations, and and pretty combined of

business organic prior both retention XX%, fantastic and to new all business this added to stellar quarter. our our of were And and New operations, finally, retail year. again rate excellent similar Canadian performance

So Day, Investor P/C the March. which more overall, global thanks we than X% organic, better X% than really discussed our to to is X% at a posted operations strong our

business. and Moving benefit consulting to employee brokerage our

IR was is our business up well, organic welfare quarter from March First and our business slightly. better work while expectations. slightly, held up Revenue than traditional Day consulting from our special which up project and arrangements, were life fees health

year. the X%, together, I P/C really total when segment start Brokerage organic to So strong was bring Benefits and a

double-digit rates past wholesale operations. brokerage our X%, couple professional and rate of led the I’d first the make saw In including P/C by to of with like starting market, remain are quarter rates quarters. digits, comments liability. P/C about few XXXX Rates overall we during the rate property were up the driven environment. within up Next, in consistent a increases the increases and the U.S., way, with Canada double the open on firm Global

Canada the low are are and certain capacity digits. lines combined, Our U.S., also combined, just single to London specialty are in There UK in retail carriers and D&O, At same Zealand are pushing umbrella as about increases in and the market that X%. company London hard up rates And public and Australia is such name for conditions. New tighter few. operations cyber, time, cat-exposed would terms and as and a properties, specialty finally, the a quite describe I constrained pockets few rate

remains but global the tailwinds. environment us is giving P/C some difficult So

indicate we economic environment forward, don’t across Looking will more seeing base. we client soon, our conditions see and that anytime and this would rate are more change activity

an For a policies. and adjustments example, encouraging yesterday, their net and too, premium exposures existing positive policy through endorsements, audits customers overall. are are midterm to adding coverages other And That, April is sign.

we some side, a our and health shine, see project our terrific market labor in a and global business. firm exposure for consulting favorably remain special should rates, and recovering core recovering increasing employment. work. will that XXXX benefits the time units incremental team impact to HR On start is we optimistic to welfare And This

Our insurance, need and we our very are clients there with expertise consulting the and advice. management risk best

or organic. greater perhaps pre-pandemic while have than be even I better segment lot year So there’s Brokerage XXXX a that year conviction organic will left, of our to XXXX equal full

thank acquisitions. five finished and extend first mergers completed welcome quarter Gallagher I new to revenues. to estimated family on brokerage million with our of I’d a very warm for We professionals. partners $XX growing and about all us, representing like mergers, Moving annualized the of to of our joining

representing have prepared, I or revenues. annualized signed M&A term $XXX than As being of our XX more at we look about tuck-in million pipeline, sheets

and fit Our global successful a for savvy platform entrepreneurs. great is

to We carrier their niche level. have products, to and business expertise their owners clients and current relationships help these the tools, data, next take support the

move Risk to our like I’d Next, Bassett. Management Gallagher segment, to

quarter to X.X%, tough was March with pre-pandemic growth still is IR our first line organic Day in flat. about quarter expectations of a First was XXXX. which compare It

However, and we time. activity returning were to year last compared claims. to claim there seeing more see when starting Traditional at and we what comp fewer no more claims comp fewer this workers’ we are are are seeing COVID-related core workers’ doubt is and

great Gallagher to of efforts paid quarter. and team. basis again another quarter EBITDAC Our by saved XXX We $X XX.X%, million the adjusted expanded containment this by around cost off our execution margin points Bassett

arising than last we claims year. than we new quarters, yet higher back last what next higher certainly to the quite to expect levels perhaps would saw year, pre-pandemic but to not be forward Looking three

with some So margins really for we back bode in when for digits to for XX% next would single the keeping combine be seeing I well new business few organic remainder also should wins, the year. quarters. the nice upper above that That the of

right to our communities be Let way where live comments continues culture with our a with doing It’s regarding It’s things right some we that reasons me for and one to to culture work and the recognized unique clients, externally. wrap up of emphasizes the Gallagher culture. service, the our and service a another right we culture people. the where to

believe our to work our as has you. XX,XXX the never guided culture, our culture of Ethisphere up sole as week, by a our Doug, to a our Gallagher colleagues culture, Just ethical all and live Gallagher for diligently one the straight years, Every of working most than top best the Way. team again, row, the for reflection global tenets XX world’s diversity are franchise. I last to our the recognized get been XXth day, one a of together Institute that’s XX Forbes once on being is maintain named culture, recognized. the and year a and key recognitions of and people promote These stronger. for over U.S. insurance Gallagher our companies Culture more by the differentiator in of broker of employers direct to

few and savings Thanks, cost echo of an CFO terrific initiatives on quarter a our to comments, flows, time items both and Today, Pat, I’ll excellent everyone. most and good clean our close comments afternoon, on the cash cash and commentary I’ll document, with I’ll in some my and our energy M&A, a liquidity. Pat’s highlight year. start then spend

on Page the X comment table. organic on I quick Before cost, in Brokerage in one segment plunge

call You’ll see a it had favorable a total regardless, that solid basis timing bit for way the a on quarter There points in great organic. quarter other about That contingent quarter. flip XX little of really but we will commissions. next is there,

Brokerage to adjusted go EBITDAC the let’s Page Okay, segment table. X,

about for as the but initiatives, at considerably our standing outlook more last adjusted IR M&A of growth margin basis and global quarter, did time we EBITDAC about is been gates seasonally we that bonus that strengthen $XXX to margin points closer call than of XXX in a this that cost at our year optimistic see savings Within points, given roll-in our as to have XXXX That as of last large, March over that points today million XXX about expansion. pandemic. adjusted is it bit, basis Day, we of You’ll million related a EBITDAC expansion. was directly basis $XX first resulting million would isn’t grew $XXX year’s discussed XXX in by

by about of organic, for XXX again, X% points these the once items, three terrific So absolutely underlying when see team. on we expansion margin execution that all-in basis controlling

EBITDAC $X.X million, cost on about Moving savings us margin on Management Risk resulting by to our nicely the leading adjusted that due adjusted margins over Page points to in initiatives. XXX XX%. expansion, of to We basis of Most post was segment X. grew

have $XX savings XXXX combine entertainment $X I advertising, and and the a reduced fees, workforce around and first similar when $XX supplies, and consulting Risk that million. occupancy is costs So reduced $XX million; levels. office $XX travel, outside our other consumables and labor of: about last about comparison Brokerage were favorable then remember, another million; to quarter pretty to segments, last and consists spend reduced about the Management quarters about professional quarter and reduced we million, million; costs, of pre-pandemic But three

all we the So about forward. it’s hold how savings cost of going now much can

today, I of it. As will still hold a I we believe it at look lot

As before, but won’t costs overnight. that we coming certain we do back have happen said see

up Those guess second then adjusted is that to the a M&A. relative million roll-in of quarters million again step-up in quarter third XXXX same impact best quarter and amounts back I’ve coming $X by given in XXXX, the the for fourth maybe the are about million step $XX quarter. similar $X in to that Our

we and run also lot had forced be say say full As a would for even to board better ways for where the as to into accelerate make has years expansion improvements the of ago in organic were organic, The to and enough year, perhaps we this even let’s dependent served and the on these will and design provide show longer X% term. of us a of pandemic new around for has where of margin an how keep assume allowed drawing would above on that Both on land, year our perspective opportunity land us some or that’s and today to XX but come. benefit more to productive than you remainder months our regardless the the service is we translates that really lasting quality business. we This improved. math for the margins,

document commentary in investor IR and corporate website. much of very full Day. line the items posted tax CFO had similar our investments estimate. year the after-tax is to line just corporate energy March are energy came earnings, $XX now which clean March. X, our clean quarters the year provided The is better news. both bumped and for timing quarter we third looking on good what move X, let’s really million On full most we So items. to we up first certain to like provided It’s and between million But Page had in than now On we a Page better our at $XX

to flip CFO the commentary. of Page X Next,

the be vignette with you worth our might energy hour clean X-minute on that during our replay gave If I website, to starts and the it mark. the IR March to listen missed Day,

harvesting up is first our cash the the will the be we are GAAP recall, means call First, first meaningful flow era; we year credit This earnings, the punchlines: XXXX XXXX Here and will cash be statement. is flows XXXX meaningful era. show cash second, what in of last the generation year last year year the will XXXX the report in

see increase cash a we to Page X flow. annual on flows to $XXX million. not benefit here million one XXXX by finally, You’ll this year $XXX is could around think that cash And

the favorably tax impact our than more should flows have sheet for on $X next billion years. cash six carryforwards balance to seven of We credit that

facility. March M&A was and cash available capacity, we had at XX, hand As outstanding than credit no borrowings $XXX for more revolving on million, on our

cash tuck-in M&A M&A nice here billion of with our continue hand, another a year borrowing With of good upwards XXXX. of untapped flows, are in cash shape we means So and capacity our it capacity with to pipeline, $X.X on in strong strategy.

pent-up Add I exposure was back of could growth. nice sit positives. to mouthful, it growth lot Pat, a a spending. be see a Before demand wave catalysts. and rate today, as here additional I a pass and tailwinds from of to consumer that lot I Organic that perhaps of has and Both governmental

have and continue and quality productivity XXXX grow, capital increase from our be on the faster especially year the lot well sticky. gains cheaper, flow energy and robust gains gets last to learned to We clean an in pandemic investment. M&A pipeline if better, strong that we operate a year all a should momentum from in another we’ve to a tax how for of service with appear This achieved our improving starting over all the cash kicker bodes generation, while

So, well in you, can ever out I to to the up coming we financially. before. of great about the It’s Back Pat. positioned pandemic setting year. out the are stronger be very operationally and field excitement feel than another

answers. Thanks, Doug. to I go and questions think we Laura, can some

Fargo. line Elyse from comes question Greenspan Wells with first Our Instructions] the [Operator of

with your question. proceed You may

evening. Hi, Good thanks.

Elyse. Hi,

Hi. My on first organic. question is

in X% quarter. guys You printed the

to we were on think to about still get XXXX, is pointed today, comments, better. if economy is I you and X%. look perhaps said where which P&C getting But As back pricing the what’s you to in also your you you going strong

to things just there’s year? rest stable Like So forward for anything cause the of what conservatism of would in do it be decelerating not three is stay see some you or that stronger? this over the of quarters year the to kind outlook

depends it the I pattern. on think recovery

of I somewhere and in think lot in right X% X.X% that to there’s range a we’re still running now. unemployment there,

like year. hold a it rest to good that It the pretty going year. of We’re be could for looks the

today different than like other inherently XXXX. feels thinking there’s it that nothing of in kind So

are doing clients Elyse. Our better, much

coming it. they XXXX, back think are surging to I not beyond

were terms then expansion of above in still that we guys margin and you right, the XXX had alluded at IR event, Okay the XX you of to to. basis margin, and headwind basis had your but came points alluding points

Day just kind from the I away which within was margin were is Was of save the you IR margin? supplemental? the relative core guess, the So what better, on to the contingence it was it Or than better expansion thinking?

that in fueled contingent came that. better, was a commission primarily It

speculation as Obviously about Okay in properties and just I the attractive give tuck-ins. the may terms could you think toward that pipeline in between and Aon press working you Willis the larger M&A to sense side, or process where to a things, a deals, big I’m There’s not not could of obviously and a may in to what of it. then of you an merger how on are could there potentially be divested. regulatory the their thinking side lot of that of pointed us pretty But become available guys you’re sure you if things can on and active M&A that there – on about, approvals terms they’re guess, Gallagher. be if divestment potentially comment

Right.

that. So there’s in I’ll capacity. lot a to unpack the hit

out acquisitions M&A of this we’ve billion that of We to tuck-in pipeline are nice and $X.X have full a there. worth got up capacity year

of In reading we things that about Willis got typically Aon we acquisitions don’t and and opportunity, same tuck-in the we but that strategy. hear terms $X.X comment the our papers, we’ve of and on like you’re what read comes merger the billion in just we out

helpful. that’s Thanks for Okay, color. the

next comes James. question Peters with the Our of from line Greg Raymond

with You question. may your proceed

Good afternoon.

Greg. Hey

JLT if evolved that what around guys the So Can at aerospace investors guess, be you’re time in and going XXXX? one-month revisit Was I I Was and sense. pretty sacrifice global we’re process? with a doing a on just process? want that M&A. anything, were getting the is in time and guess issues you you, to process effort you your or back I’m go sort of you when makes I that some meet And it Watson. turn Willis not might an it of discussion some ultimately, Towers X-month diligence, there’s to deal might emerged concerned the And your lines, strong their with Aon is line but doing that due

shot Greg, take deal London Arrow pretty in in short a did We at the I’ll order. that.

to seem happy We’re anything. didn’t acquisition. to that turned with really sacrifice We be It out terrific.

culture. Australia that New to acquisitions, and of a the you’re able of continuity little us you when acquisitions the referenced doing areas go culture to deals. large one and other did to you were how talk you Okay bit can the you so in the back your and is Maybe ensure Zealand large

I Well, stand-alone situation, in get could, strong businesses meet in that think you leadership very had of. that good the we fact, to

them leaders two did and top We to make. leadership. They that planning "You’ve basically, story. right. the remember leadership were choice you met the gave We met choice. Australia, on entire their And with evening public think I to a said, going in – the own got fly

want join decision Lockwood, us?" or your do to Steve still to own who’s with go You make. you public that on want had us, to

a he think made going great. good are I decision. pretty Things

Yes.

it that conglomerate insurance sell to supporting is the what come this sales I we are odd deal, that want and show and seems I’ve on when didn’t insurance too, bought the hard got really organic we to works a and sauce as job. by organic nice to brokers in run for the say our leadership that posting way the owned really on positive a really since did industrial an that to needed that the think, on we year running our years to was was terrific it when that sell year by you it and since priority, a at people that over in for like Greg, the did think number Australia accountant to insurance of one, think sales was we negative brokerage view and really – to out and Australia, it but we in brokerage that we’re in secret we its when shot the Steve’s culture X% was broker – it think that this, that particular, relentless – is business operational – really, say, with a and and being in and came Gallagher to comes taking combined that and worked culture that. so arm leadership we we – sales, focus we’ve embracing down It’s Australia and

organic operation Canada, Canadian as running was negative well. our

Well, the answer. accountant his do too with didn’t bad

I’ll So pivot to...

Greg. been around Remember, years, XX he’s

the aware. well like to I’m pivot Yes, to I’d operations.

Just we the to it think in you – clearly is but as year benefit any the about say hasn’t want year, move Can it is ASC business economies employee stuck there don’t was benefits the first the do out. pre-pandemic. struggling two Or it results issues is The that I the expected still relative we things that rebounded – recover? before? way XXX could quarter the that be as if – there some to through there is

numbers, the noteworthy could nothing XXX in There’s what in happen future. on the

you to our estimates rest had If upside lives compared development in for – see our this you covered substantial of those covered a estimates some lives estimates the recovery year. in to today, compared could

of employee most know, business is a that you all it benefits As or X/X renewal.

three We up was estimates would develops. lives. little a to it substantial over have next quarters probably covered bit those pull there surge if in our a estimate of make as that the And employment,

Got it.

like I’ve time. their feel I others for know of questions. the I’ll answers. enough Thanks let hogged You your ask

Greg. Thanks

line the Evercore David ISI. Motemaden from comes with question next Our of

with your proceed may You question.

evening. good Hi,

David. Hi

to to get question, more detail do estimates how bit maybe those a in thinking the just following had know terms and year about spoke specifically, business the lives a of throughout up rest on just your granular previous what in covered benefits and year. I response hoping you’re just organic the for about I of about, the about the your question, you and

levels expectations So assuming you’re the can just baked the wondering are that XXXX? for get for statement in year covered what in organic back rest what’s XXXX I’m your lives, like of that we to here

Yes.

the covered rest here the place are our substantial to lives, than different assumptions our put where that So brokers in in estimates in not business they recovery as January. XXX

didn’t employers a the recovery on uptick off stable wouldn’t lives employers that and of rest substantial so point, while in the we that cliff do that have of covered year didn’t fall year. pretty a remember, expectation. last business there last so because for the are expect substantial year, and the a isn’t decrease I So we substantial that in Also

expectations of that is – were where when that reserve kind set So flat they we renewed used our estimate. what

of to done. some there. shut need there business. the business those back fee more last quarter and professionals I see be that them, will and are projects to That we They at slammed to do Where opportunity – was the end that was need grow think it just demand is some year first be the

where back, the helping so, and workforce I that and that’s employers – think mean talent that’s I coming with is excel we is that.

I’m if and quarter sorry missed arrangements? the helpful consulting you that’s far did just in how No, it. about trending talk on I it, Got second thus that’s but the

but happy March didn’t let’s on there here we shoots. green we’re saw, on to. difference as We – XX, say, sitting comment there some April are XX. is Not a substantial But

some getting little bit you’ll fall. are so a summer calls that I and active more consultants see Our think more

Let’s hope.

it. No, and helpful just question. stepping bigger then maybe a picture back, that’s Got

as and obviously you of sort of weigh how of both M&A in I’m of on lift-outs about team different Sort the of similar way theme but terms broader just acquisitions ways sort – financials are how to growth potential. work. you guys I’m opposed the wondering just the thinking Very but

how wondering just you avenues. about both think So of those

Yes.

clear, Let me real be David.

want these players that contracts, ignore to and way lift litigate talent. in think cheaper they get market, teams, to call the I a

for their people can ongoing recruit do. And to we see Let Do us. respect we the I that. people? individual across? clean Yes, a that But me people built I to teams have my and bring isn’t method respect Absolutely. up don’t we like in their enterprises entrepreneurial companies, sell culture, comments. nature, clients, see We have do other like us. if

Thank I’ll ask have. Got the that it. Yup. you. queue. others all questions That makes let in I That’s their sense.

Thanks David

Mark of from with line the Our Hughes next question comes Truist.

your proceed may with You question.

Mark. Hi

you. Good afternoon. thank Yeah,

Hi Mark.

I’ll Risk question the about claims. ask a business, on Hey, Management Hello.

counts and in You even steady. to maybe are claims frequency year-over-year, relatively to that? the it But sounds or holding and clearly, say right up. QX way think are going that be QX QX like Is that so about far

Yes.

a Mark. think of there’s here, a crossover I little bit

started to see As decline, claim COVID to claims regular workers’ started we up. comp go

little the that but in not much. of second bit You’ll quarter a have

the COVID pretty think claims claims I the point, are at forward. our that through well comp this far will workers’ regular exceed going then process and

that So you’re that number. seeing what might be in

talk the On of environment, just there’s pricing moderation. some

You pretty rates all seem consistent that be to the similar trends increase. are holding of steady,

in I of pointed increase Are sort higher think any the the text, might to of in second you quarter. rates have you seeing moderation?

No, we’re not.

think we’re now couple demand We’ve I consistent seeing of a some numbers. proper pricing. years into hardening for been

over that ask think do we’re any and lack of point not will for increases. that at I market moderate are underwriters this discipline seeing the in to but continuing So time,

you’re not When – rate be Yes. a big comp percentage up. the going as might the getting look bigger this still The there’s increases, point. because increases at or dollar happening base, you rate Even at rate year-over-year the are workers’ still is the but dollar-over-dollar on dollars everywhere.

energy Then shoots Doug, about extending the clean any green legislation?

packages There’s this process that opportunity environment. the pretty does a to to contribute value and some I good lot infrastructure there, realize there’s think of out

reconciliation we in hope. on package hope – an infrastructure get in might So tax come the always through, there’s always If there’s that or to that. the process opportunity

Thank you.

Sure.

Thanks Mark.

Goldman with Sachs. Our from of Yaron question next comes line Kinar the

with proceed question. your may You

to on margin XXX math Does get everybody. so my question think basis like doing afternoon that contingents. from I first If correct, good I I’m the of commissions. My coming points contingent expansion resonate? Hi, or

margin What did assume the on it? you as

About XX%.

go there’s that it that to might it of of Yes, lot a little the leadership thick. commissions when variable piece the comp, it. fuels – mean be comes contingent I to a a

So yes, XX% basis it, points, but XXX. some maybe of little might be rich, not a maybe XXX

Okay, OK.

expansion, like got it contingents it, I wanted if points buckets? and basis rest coming to divide from organic from you margin of, into call the saves, cost XXX coming XX So

can’t out contingents that. regular Probably the you then almost you – and and the take take a from out point from margin when trough

EPS Okay, OK. that to you That’s you’re switching did I and cash XXXX? helpful hear over say in

No.

we million to was start saying I that million of $XXX $XXX in million you’re We’ll our call statement. cash that seeing every will the balance that a $XXX cash energy that to make going is come asset. asset flows clean from what deferred sure being rundown through flow that that segment, obviously a cash out our on noncash it’s moves because think asset that on sheet tax that I much – quarter is the into of how to additional sits

So forward. as we’ll make sure we we highlight go it

Got and congrats quarter. on it, you OK. very Thank much the

Thanks.

Thanks.

Our with Shields of comes KBW. Meyer from line next the question

question. You may proceed with your

big economy back, I dumb we I’m struggling growth organic and Thanks. rate on flat guess the question year-over-year is to that well hold point with wouldn’t assume the increases we’re seeing that if a that that comes basis above X%?

Hope so.

three or other that insure mitigate rate exposure our or thing, increases, actually hard if trucks. remember, of do help but the same can three limits. our the increase. lower Rate of mitigate there’s some to job you want unless more or programs to you’ve to two structure growth you more some though trucks, is client more two got to too, deductibles that, Part those is – take adds It’s somebody

can units overtake different from that line. exposure that bottom if the programs the you So on you’d that mitigate of purely rate, it’s the recovery rate of But hitting if structure. we some program that, just see designed, more through

you’re in workers’ very revenues deeper versus the that a trends. Okay, compensation – and there material I the traditional when just difference claims dig claims to that’s comp seeing your a little on COVID? work the Is claims can then helpful handling if you’re

workers’ medical-only different there’s then two there’s pieces and there’s liability the and piece – different Well, the in comp. there’s piece traditional

the workers’ paying us I recurring is think than type profitable on that comp basically medical-only where kind claims, claim we’re just longer-tail the bills the of the it. more liability to

would – So you see that liability-related revenues COVID the – you off of claim come a that comp the would workers’ claims. probably exceed would

Good. Perfect. a lot. That’s very Thanks Okay. helpful.

Meyer. Thanks

with Our Phil of the line from last Deutsche question Stefano Bank. comes

your with proceed may question. You

and good Yes, evening. thanks

answered. is the adjustment and some printed? from first But Just the think margin that about – was a our should been margin quarter the of for few for quick XXXX, kind ones. so for appropriate XX.X% benefit Most the base we make it asked supplementals? we and as have contingents Or

Okay.

So XXXX? you’re year about now in first a from asking quarter

would... it No

say when out help base lower want that, a at question. you base think by long-term second I’ll little that you across of got of costs lift the time think here our look million structure savings compared bit that there’s way think in That’s or that then, we from $X.X We next our worth – into back the contingent you let’s we’re probably start probably where as the number, billion. yes, probably should I off and are and about are year. the a billion spread that half right XX.X%, you earlier by today. Maybe so little heard from to commissions to that $X.X $XX savings, a to holding start

fair it’s say lumpy any stuff normalized for. to but Okay, this probably of should be

I’m again, sorry. that Say

as contingent say impacts like mean lumpy It’s about we think a of the that margin. should probably fair normalize kind we over-earning, that I – to the for forward

think so. I Yes. Yes,

year-over-year kind way about digits or being I about comment segment, Perfect Is revenues in my back fourth as about there right. of I with as the think reflected comment Okay, in quarter of think mind, look the base? like think counts XXXX expanding to guess Risk this kind quarters. a counts the the to sequentially on quarter, one a was I single claim is basis. feels and up, guess, right for opposed around next about year-over-year that Management being where and your we first flattish from opening claim the in when few the upper off all Is it I that’s maybe then of the this sequentially? at I guess, to economy businesses it

do basing not quarter, out that Either long to quarter two was as some to and it way, there as want either. off recovery last that the do if will understand bad to quarters trough run it second a but last it’s and of you that a rate year’s relative way, you’re year probably a it this be way there

right. all All Okay. had. That’s I Perfect.

everybody, first Thank afternoon. of you, great We that clients just confident I’d support. their work, in carrier thank for XXXX our trust on this for like and Phil. delivered partners can today Well, their our being it. thank for to deliver an Gallagher performance We appreciate started. really of truly Thanks believe professionals and we’re their for all you year quarter, I’m being and hard another financial excellent us. we our getting again, with for

conclude This conference today’s does call.

your and of disconnect enjoy this lines evening. you may participation for Thank your the You at rest your time.