Arthur J. Gallagher & Co. (AJG) 1 Aug 222022 Q2 Earnings call transcript

Good afternoon, and welcome to Arthur J. Gallagher & Company's Second Quarter 2022 Earnings Conference Call. [Operator Instructions] Today's call is being recorded. [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 securities 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 statements 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. afternoon, Thank XXXX quarter us you for Good our second for everyone. call. earnings joining

operating financial Doug our today On the well me performance. call another CFO; Howell, with excellent quarter We divisions. had of of as is our as the heads

per Management growth performed For XX.X% revenue, XX%, growth, growth combined and during our XX% of how the I'm Brokerage in first the our of the we XX,XXX and half growth adjusted posted XX% colleagues growth year. globe the nearly in segments, earnings around extremely proud net share of EBITDAC of of earnings quarter XX%. organic Risk adjusted

give second on more some Brokerage segment quarter performance. me detail let So you our

touch June Net for IR Rollover quarter of revenues reported growth in X quarter, I'll a tailwind life a XX%. point large growth expectations. team. an margins our posted XX%. $XXX Brokerage Day expected, XX.X% XX%, with about the we And EBITDAC adjusted were consistent million, Of of was minute. from that, earnings on organic. the as During outstanding revenue that case about We was was did have an infrequent

down the starting around organic, operations. our you walk with our me and PC world break Let

operations, and renewal open business, in with XX% organic our programs retail in posted binding than organic MGA posted our premium wholesale of brokerage business U.S. and continued organic and Our organic, strong This X%. more businesses. Risk Placement Services, includes increases. U.S. new XX% retention X%

our Day. second U.S. bit with was outside as IR June retention down quarter of 'XX, in consistent just business a the year, Shifting last noted from New was while we

with more retention. to and Our Australia than double-digit renewal stable new driven was from increases, premium more X% growth of U.K. businesses than organic renewal continues posted retention premium and benefit new within and great organic strong Zealand XX%, quarter Canada another organic specialty. by and business, increases. business great was XX% new higher and combined excellent organically business New overall up

Moving to our Employee business. Consulting Benefits and Brokerage

we this large from earlier, mentioned I helped quarter were a As case. life

about HR IR was in driven Health Day work Excluding International businesses. by and Welfare our growth and in and this, organic benefits line with our our and expectations X%, increased business benefits consulting solid

breakage and Finally, to and our organic budget right December continues to closing, After of ahead X%, quarter controlling integration prior is around on on target. reinsurance just acquisition fantastic, for original nicely progress its was second line. time

continues really a reinsurance good story. be to So

So life segment X% of headline XX.X% either large quarter. for case, controlling and way, excellent Brokerage all after organic an the in upper

nearly double global PC second quarter showed the than to exception increases line I renewal were higher give coverages, for first XX.X%. were renewal that's When renewal One quarter. By up exposure. D&O. a premiums combination and this that's nearly exposure mostly by increases combined, premiums Again, premiums and quarter at digits, or in than insurance Overall, both quarter environment, were starting equal of geography, our renewal professional liability, was to both everywhere. 'XX. quarter for all look primary some in the in rate second me let data Next, the our and on first current higher premiums, market. rate what you fourth both thoughts That's market up 'XX

in no So quarter. during the slowdown increases premium to next

economic slowdown. are any we seeing signs of not significant Additionally,

to than are fit continue trend with and premium to insurance continue In fact, premium a far July, and our policy ago. increases our Thus year second year-over-year, their to programs quarter is help as suitable more and renewal mitigate midterm increases higher consistent clients in find budgets. endorsements audits quarter. favorable move second cancellations policy brokers midterm job remember, endorsements, But that

Moving to reinsurance.

risks noted first we Property up reinsurance our report XX% hardening view published anywhere this to for hurricane earlier most As by XX%. across are in U.S. pricing month, notably, of in And very real from the Australian is board. reinsurance there are and the than our more market. professionals signs property up reinsurance

maintain continuing for conditions, our clients These cautious a translate of underwriting a uncertainty outside will reinsurance bit to name and partners reinsurance reinsurance casualty rate foreseeable little tensions conditions market or are difficult more geopolitical this and to show side, all the a inflation, And for market challenging. increases. economic hardening in and Regardless, their firm reinsurance reasons stance retail, PC carrier a market future. there into up were few. many less market naturally for wholesale On placements our across experienced increases other modest price primary

people Moving to Consulting favorable. months, more Brokerage U.S. U.S. double X there more than openings, remain with decline remained and in market work. million conditions a the for Even Benefit than job broadly job business, XX last our in number postings unemployed that's Employee and the labor each looking of of

underlying and still post services for the attracting, large of retaining timing to Benefits HR motivating will in the continue that case workforce. to business year, and covered demand half quarterly consulting strong results organic second The expect as 'XX the We changes cause live of businesses their change lumpy but life environment. prioritize this our favorable benefits the and doesn't

great wrap will A be year X%, would half to us me 'XX organic over half terrific second absolutely on which lead the segment year. like a organic. and Brokerage looking full So an first let up the

on Moving to acquisitions. mergers and

we second welcome partners growing representing to thank million about of mergers and all I'd the revenues. Gallagher us $XX extend family a warm very annualized like professionals. for During estimated quarter, our our brokerage X of tuck-in new completed to new joining of

have of these merger term will we signed get pipeline, tuck-in We $XXX being XX fair we sheets all look not million revenue. and more will representing annualized acquisition share. close, at prepared, however, our of know or believe we than nearly As I our

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

Second expectation to growth a expectations. better XX.X%, organic was Day a June. is was IR due with EBITDAC Adjusted margin strong line our quarter our bit than which in XX.X%,

further year, yet liability levels, opportunity and levels. prepandemic fully we rebound claims compensation property core Core counts comp the the to counts margins For which growth. XXXX claim that and level. Encouragingly, EBITDAC near arising claim during back in a nice property new have again see for saw general workers' to quarter. continue to increases to are liability, adjusted workers' We across XX% represents

XX% second think culture. year, and due I'll of the half our continue towards conclude to remarks with my we will growing bedrock new revenue growth some counts on claim Looking business. to the thoughts push organic

I our nearly As our serve Gallagher reflection together culture the globe, can XX,XXX colleagues strong for and around as that's is offices report resume a that people, a traveling you I clients. our to common our to our working of to as ever, goal

we before, and a results. said true financial culture that our competitive believe drives our a I've is people outstanding our advantage underpin culture, As

Doug? Okay. and over to now I'll stop it Doug. turn

posted some hello, touch commentary M&A, my I'll segment organic count. and cash. and earnings using on everyone, Today, the document on our Corporate with and end Pat, margins then comments an I'll our our second debt release Thanks, then and CFO comments typical quarter website. make using excellent terrific and on

the to of organic Okay, Brokerage with X. organic XX.X%. Page segment earnings starting headline on Fantastic release the table all-in brokerage

without because or benefit we in team. about said, did so a point that, by Pat by of With quarter X live or our found case June. great As large group a sales late

for due quarter to be of we said a Day, around X% 'XX, As IR the June tough during benefits rest and somewhere third fourth would our compare.

today, benefits more of X over third of X%, still it sit to around Brokerage quarter organic we're in we quarter. the growth full X%. call would becoming quarter, reflecting that nicely compare, fourth As over fourth segment tough in and point year lead that bullish X% seeing That about we're

IR we at forecasting organic better Day. we're today, what year So than seeing our full were June growth

to impact expectation. Page what Headline been adjusted with saying to segment line the because margin year, combination Brokerage create all turning in still EBITDAC substantial quarterly margin as reinsurance seasonality acquired are change EBITDAC returning of pandemic, adjusted the Recall right X in margin we've our day has the and Next, expenses IR because roll-in there of those operations, of quarterly the which we of XX%, all-in volatility. come table. June out

When expansion. the changes These year. in on down are right in I quarter, in margin I expenses. all posted in As first here XX full margin year quarterly our think see 'XX and here saying roll-up we've the much XXX Because down don't we're points basis points of basis inflation just seasonally on what quarter, back impact, been we we XX% points that. in levers a other And to And XX on forecasting if first to XX the recap, the have expense of basis mitigation then in pull margins the in basis we doesn't significantly adjusted comes the largest third, those basis are up as of June, fourth. XX our XXX would up base. headline the points impact XX% discussed to that inflation around second, we to results points it

comfortable with margin our even remain we rising XXXX outlook. with So CPI,

should and pandemic go reinsurance rolled all 'XX, the change our towards books. Looking fully us margin volatility into that quarter away behind with

business segment Management highlights. Pages and quarters XX% show of revenue now on margins, and X, unit quarter. Risk each quarter. the to rebounding It's claim XX.X% in continues X the and large counts looking new This an hit and on third fourth 'XX. to of organic with excellent Moving adjusted next like XX.X% Pat growth organic a around coming win momentum

and overcome growth be fourth on outcome a a in quarter terrific that in such would Now XX% third of remember, top to 'XX that's growth quarter difficult 'XX, XX% compare.

is Corporate Interest banking combined X June range. table. within -- due Adjusted dollar. June than they Page in given IR costs the some call our favorable gains those range. our the energy, after IR our clean to segment FX release the to $X.XX favorable to adjusting within it shortcut M&A And in is Day range, Corporate, remeasurement also Day slightly better tax of the Moving strengthening item, combined earnings for about in

Let's Page our are Risk earnings commentary Brokerage to document. go leave X, these CFO and On helpers. modeling Management the typical the and release

please caused versus FX $X.XX our take in extra Day the since rally of our June headwind strengthening look for second With dollar Day, IR guidance. updated quarter the guidance here U.S. a late IR 'XX. June in This the our at an remainder the also

Willis Next, of you'll to charges punchline related integration is Most to see XXXX. our through current for The Re. million has original costs. estimate of estimate no end integration $XXX of our of change this the

people, around the and is efforts excellent be services last pace faster our done to real team a back-office quarter, mentioned transition making estate, late plan. targeted at I original mostly 'XX. progress As are executing is by than Integration

In our fact, our the new excitement into locations together. is that reinsurance and combined colleagues Gallagher moving coming there's now are an world, around

system rebuild, or As for the we still technology early that see 'XX and 'XX. of done having end by

the So continued integration on good news front. reinsurance

adjust a statements. out reconcile X. this take at number Recall That take the we will our non-GAAP look our to number at face of Also look intangibles line. of what the in amortization GAAP results. please we're you footnote -- of our financial Next, that now a showing out help

to payable. earn-out change Next the estimated in

the quarter this the market payable This reflect gain value is impact change does that due punchline any pension the The never interest earn-out number liability note to a bit this found gain and of The can expectations large does out. of does our results X. not thus the liability This volatility. in needs, income. in rate noncash rates through this we is accounting, no In in not mind OCI a creating dramatically so has admittedly earn-out. comparability, acquired adjustment except mostly our to increases pronounced. change pay our declines, meaningful our little these change P&L, but a the and an adjusted pensions. earn-out we'll accounting increase, goes what The is earn-out assumptions of When interest as our ultimately nor quarter, more account it footnote GAAP is view, some it's the change in is in to component saying of but view become brokerages like

billion and the the Turning Clean with have estimates. fourth This Energy. segment to credit outlook. X, changes carryovers. Sunset $X now late highlight No of Corporate quarter here in investments. to that Page cash is program to page third the Page now of harvesting X, tax we around we're year year, last Flipping these in our And

a the to $XXX idled be cash decommissioning column 'XX be investments rate, lets to these perhaps sweetener. an million of extension but the possibility happens. remain nice us The pinkish increase than more X-year flow and loss cost the extension flow cash carry an At in see plans will still You'll have XXXX so that $XXX should beyond. really them, million restart it them, in this to well rather positioned we of our exists, us production a little if and

of Turning those detail. about that that in the is this the to appreciate The we've page Page revenue spoken all X. top models. have disclosure into their table We incorporated rollover

Moving The on update down an December bottom acquisition. the page. table is reinsurance our

we 'XX these be deal. that and our a would revenue million the pro nearly in $XXX million of to Day adjusted June good very be on are really spot estimates. see to close formas outcome. That Delivering here would when numbers almost You'll our inked EBITDAC of IR $XXX

and XX, about $XXX hand cash and management on June At cash future was Moving to M&A. on million. capital available

continue well, cash up operations strong M&A and our Energy operating very here perform more flows. of than to investments to billion capacity, that, we capacity expect Clean sweetener $X borrowing flow 'XX to in combined. and 'XX Add from Our it adds tuck-in and cash additional the

another quarter Pat. are excellent well you, extremely first my for and to we're those An and year. half, comments. Back positioned So terrific

ready questions. Thanks, Doug. open up we're to to think Daryl, I it

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

asked in I My June, first about question, recession. Pat, had you

results on until see You business, be were if wouldn't it. your And not an guys said in you impact were XXXX. you going it seeing to your

say as things play organic recognize, So see next that can here of that we're casualty an pricing, think year. right, how you perspective X property in things inflation, slowdown, good how growth we an But shake advance to still hitting months out today? sitting you could from next about I year out from all economic if have

daily, we that of than all clients' pattern at the business Well, we underlying well. our I not still discussion an think literally, people. in look They're different We're this it's -- June. that recruiting had seeing doing is interesting

as are -- that put that they was endorsements, was right of in a upside are To both do folks on watch terms and adjustments, during that can and substantially have down. HR for audits all benefits the busy have perspective, be. baseline positive obviously -- and Our as now. We we possibly pandemic, in those it we

it. that, Doug impact we a as an So about said, and our really expenses. good do we have of feel on has for about XX% feel good Inflation,

be I what's research think that's team's the probably to good subject on that really part of we'll in that, watching. terms

budget weeks and around of in As you know, going we're into the next discussion time there's a X this. lot or so,

it, think a think pretty our bodes good don't of in So I mix -- to I pretty hold me well. we're that spot. And business but

rate upside I I with up, increases, it's out, pretty -- the those a the our lot an a with A I salespeople expenses think good. of for environment awful rates that shake obviously. broker. of are that expenses variable, way lot And year, good think for that's think this our interest

pile our whiteboarding Like not little daily current your that's is future that, activity. because more me I let point. want indications growth about and this think And past question slowing seeing we're on a bit customers' that looking slowdown. recent admittedly, at a And that. don't of So really at we on

we see, we recession because, whether the economy few X/XX. happened of just And if is happens, at every I and We more a we on clinch of cooling slowdown not it do or 'XX. if, next -- in a a the or same, again, what work XXXX, XXXX, when being of or and when not it's looked recession what of XXXX, do of recession subprime see we year lot in like pandemic shock might that, recession see kind like So 'XX, a a say like that. the obviously, maybe maybe financial normal recession, a the before more 'XX 'XX months for

it's and early about the both that normal 'XXs So these to early note lasted XXXXs, X important in months. more recessions also

-- remember because that. it revenues that a premium point very amount of are it's So placed. of the like also large portion we're important in based goes an exposure, frankly, of of or rate brokers -- more we to bit it on up we because see little our different It's that. If a on

think for a the that taking our we than like revenue us, So GDP at look much is factor for more GDP. nominal bigger real

what payroll, premiums are on. sales, absolute So values are and Pat said, property like placed

what see year say, over premium then broker. proficient spread the you business our And so. when next you we're don't next us rate we thoughts increases what slowing really, that between heard year do? say loss, new them So will or and And

selling year. lose more every insurance So than we

for when rate environment brokerage can put we So organic next recession inflating business year, all still an during that post a terrific the during premium together results. normal

how highly I about we're the factors on And the expense side of June that exposed some XX% to be talked might mitigating that's that So for that we that during seeing component have inflation think it we now. to that. you

So it's on I but year we think a growth. Pat still could to your be terrific 'XX of answer and question organic long between it, a

if talk me regardless that were in stop that's paying times which before go we XXXX, of to their -- economy. you the clients let the back we paying their business people have XXXX, good learned to back load June. we Elyse, pretty But in you through And will premiums. pandemic to, we our a many tough clinches, thought stop they be go didn't But to another again, about

June for IR term. question than more the outlook Day. short better, little a brokerage What's quarter Doug, the second is you that? maybe reason said the fourth is at My right, bit

our job selling than of great sustained increases, a and think doing teams just more rate we're I losing. are

starting come happening been first the drop data in be see And rate environment seems the that just might quarter, of think little slope We're have bit I just quarter rates to out be better. now. to versus positive that on first. to with a second seems back So there what's of a and

more last over kind as the because you are quarters in quarters year later the the see carriers, get big maybe So a they you bit back maybe competitive for first increases being first the the premium full few you in they rate go in in quarter. -- of as quite get that by the that little when of aren't books years

quarter again. bounced up Second back

we've what's look think a pipeline. at in I had chance our to that

say on just second half. we're fronts, it's where would optimistic I we're So more seeing all the feeling about

And then one last one.

guys You seems a time like you so a are they're observed you any expect if have deals it just think timing gave closed, to M&A still that the better have do color, mean to multiple be pipeline. a past happen there you or about in Have could when get you around? shift in recession? the good people get if do concerned I this you not or waiting not potentially -- that

No.

smart now it. I when had If is think to brokers are sell opportunistic, I'd sell, a people. I business

Our has next Yaron Jefferies. line with from of the question come Kinar

quarter. a And good on congrats

that First mentioned, what's business? large overall margin Brokerage that life you the dilutive question, the the accretive case to that? or profile on Is

the about It's same.

So it as amount. other the the in would incremental of see leverage you some doesn't have

have Okay. an margins did revenues? only And then on or was that FX impact -- on

We adjust of our profile. that out margin

So be it the side. just on revenue would

see to chance there books come agreement holding coal, what closed to so through continuing say maybe the credit hope Or maybe that think, or still some you that? from then in coming kind the if coal Senate increasing you I extension actually clean I of -- Okay. or the fully you're with is extending? you I learned it an today, you've on D.C. haven't premature is of guess, week know this Democrats on another in one. clean said do And that

that, Well, in it's see of through we're a or the doing that in kind the And to searches Senate week it. I'm out it bill seeing -- but be later draft not. package word get year of that you we're vote-a-rama even this to package, look if page XXX until other -- what think could it, in senators a we're next into it might not the include at on it how if the lot in in of I or want come doesn't X. never it's

much So doesn't to plant. the carry us it cost that

very about been Our They're utility partners to us have this. not pressing understanding decommission.

carry about we're not, you it years, it for if it we will. cash if the we're that era thought But great. for XX another we now. So point last -- months, If X would that like just have be happens, at harvesting in to the we

So harvesting the is nice. pretty cash

question next from of come the Evercore. with David line is Motemaden Our

you're specifically signs changes detail just you're on the just you all and with maybe the about audits. at I'm endorsements, on appreciate seeing? weakness pipeline? HR business, Employee wondering midterm consulting I I talk what all there? could Benefits the benefits And policy there of Any on the guess that consulting seeing Any

to see. I'll tell you. It's interesting really

As think -- I quarter. hit, an pandemic in can a now we when shutdown imagine, turnaround business And the you for clients. that our and interesting talked about this what

and attracting biggest their problem is Now retaining.

they there amount we frankly, And what the prepandemic. base I this employee that could. lowest down were going case, Everything come that of everyone So kind level at of was fine. to things think is And to well. of kind tried exceeds a then along in saw demand,

back. Now they're are businesses back. coming Their

when are and so and a that's our demand audits, we demand that As far people. at and said, looked creates we endorsements clients' adjustments -- more for our a robust, businesses

group. It's extremely capital the entire human and consulting with So this by I year. our human of business exactly doing mean you can't well practice which part I employee, specific get resource is

Yes.

Let cost me people the all were that. to pandemic, containment. -- during about add There's

happens with on believe -- that And think so to the they cost I of impact going I dramatic It's recession. Fed and cut were it's a this discretionary don't actions, don't I cut any all their -- down have And what regardless unemployment. they costs. just

thinking think about I really talent. retaining are that and employers So attracting, motivating their

in type of or the any recession putting employment X just So a see dent I months don't numbers. yearlong

we to competing have there that's going sure value. where make to for still provide really talent, they're are and employers out So

in I still like if and then XXXX, XXXX. the or this back it happens, we pandemic like talent and don't see Again, for So a it more 'XX see too. lot, there is

into care of I'll have solid outreach is any the in so why plans, won't dollar a client I to mention give with all an that the with improve engaged them, David. communicating of in the a on employee kind sizable willing us last plan, This floored path example, but their what help multimillion how and existing they the are names, you they're to they've an And that company of millions one of This me things go communication significant organization. dollars are what month. we employees that? the to take career their got how but them of make understand their what is cool sure they in contract means, a they part base. why being spend is communication obviously, educating, it great to multiple those that is, has client, growth benefits a

No. I mean that is exciting.

now at seeing slowdown. like, yes, really any it sound So doesn't definitely the least of you're sign

I the last of I office strategy. the you mention And sort maybe gears, see call, of I So noticed just the switching that in next a guess year, one do quarters Doug, think guess, about in we workforce past there's couple June the been consolidations. if the agile fine in slowdown think I print, -- on release about, press believe I've if of thing I spoke,

you a helpful? benefit get if on around to you real potential doing put maybe would a that some a maybe more And you're talk just little if pull lever could bigger estate about be the what that So could front? we tougher bigger also revenue I bit a could saves, guess, And into backdrop? numbers or do if maybe be

Yes.

we million when annualized the pandemic, $XX or estate. out it think coming coming $XX from of million we were thought savings million real of or talked there could early, $XX I about when be we

target about that. still I think we're on

that here the more harvesting What within think footprints number work, about going their million an coming ads office XX% that that so in think year effort, a we're of year. big are a employees to not so doing? next that that we the are couple the year covering next little that technologies over is I up be bit so that and to of basically they're we office maybe on bringing have. We're of are there's We're this bear, will dedicated maybe footprint $X a locations. on or I

to that come every those employees very have responding cities well, For we're there spot. employees commute. day, clearly, And a to finding that especially designated they a in the in is substantial have it are where

So continuing we exercise a be next I to would year. whether do know us it don't a that. rapid I see if more recession had normal over the

has. it rent you the end of I wait rest think making term. the pace you we're up the organization change to out you paying lease the that the to and either got is pace until expires of that downsize the -- the And and then get or you

measured the where a to normal over approach So happening and changing that I next paced we if think is recession I there was are, see this that don't and year.

kind to to helper. done on that job home on for a them in, the the pandemic about the people the this on our my experience. a know again, real It's in of the pandemic. isn't social and don't anecdote come workstation experience is people days that, your footprints I the we're connections was in way customer a employee like prior plug but And tell plans meetings. charge plug-and-play to their the not I'll leading where get should good allowing Doug, in this their and foot, eliminating being not go But -- do we be back side, able there they telling And it's believe and anymore are for were important, office contact, or that experience. that a you, these office

go know ahead. it I sorry, like Yes, sounds --

you is look get no in too big, office the you if can it like out really, the is kind the of leave don't that And office. -- there's vibe going

into a it things Same the The you track a So much responds restaurant that restaurant, was other a we empty, to wow, workforce. going and lot of number in happening footprint to a make saying, there's table do smaller people sure can feel like is really out every the of workforce. vibe. doesn't like we walk tonight. a that of place It's

and So office. more step we're the one collaborative, a each it's actually London near too long into come working more experiences when not a then. in in people come full and those everybody real into trying to other, We bounce ago, were make they when just office, there's

age can't thing just is trying on because restaurant, a Doug hear... full I to the do Yes. to me go I

Yes. agree No, changes. with those I all of

And a sounds million $XX it change. like like gradual a bit so things unless it benefit, but to $XX yes, more million maybe that's sounds of

over mean X.X we'll I years, couple Yes. get years. of a it.

[Operator Greg come the with questions of Instructions] next Raymond James. Our Peters line from

You Risk business. pretty -- answer on recession kind recession provided its talk business. your about potential about on a brokerage didn't of Management a you and really effect your But or and the robust the its effect in answer,

So maybe -- was missed on it, or Brokerage. I more if you did, focused -- I so because

of could us whiteboard on Management sort the conclusions the Risk effect of your So about pivot maybe a on just recession you tell potential and business?

employment a was I substantial normal don't recession. in think changes there

falls, thing Benefits they're next there now. resilient to and business, tight, I that for think I in number saying places in talent. competition this but not it that So they're Same -- might with with think the being slips et so to right there's that where cetera, the of Bassett employed I'm people recession, Gallagher pretty in immune still normal be

-- there's that XX you Pat something right jobs and out or heard like say open there's there's million -- that people think work X million now for that. I

Scott supply. on believe if demand. supply, about up stuff on demand we personally is pays a I the demand. excess And claims next it's the that versus And that what -- sell not think there's slowdown, supply I So drying not this

So I business... -- think think I that as

Yes. not in still business And heard say all Gallagher us core Greg, by you lines the not of counts. it's and cover now that's to comp adjusted where that Bassett claim is of one are back the our -- line right that prepandemic is U.S.

count. But connected as it Doug takes to the back. while that build So said, employee head a to that's, directly

slashed, good aggressive get if retention. And I count on Benefit an what that we're we're will Scott's aggressive business, have in And is the so -- stable. counts think seeing of pretty if employee stay they side on shape. attempts hiring, head And head impact employee

I counts it and never whether true -- old -- the is... Grim fall if was to I of was of workers' was in really not. or as But claim out and comp -- employees you slip recalling something an know recession the that tested the recession claim know increase just actually advance worst was there actually an Reaper, that providing as onset that's I it sharing I would facing as a answer, more were as don't counts

I old tale. think that's an life

Yes. Yes. Exactly.

push workers' Bassett, That comp will But self-insurance, into as that workers' increase, pretty in more Gallagher we rates leads if and in get fully workers' jumps big comp comp. for we're harder premium not that too. to to people a market good and growth

when and look alternatives. self-insurance at So they

you medical might rates self-insurance inflate, costs So for if et the we workers' people paying up cetera, into claims. looking go Gallagher but have more Bassett a recession, with as go comp

Is Gallagher factors from comp, work one from it versus Bassett? that in your home count you're the in work is of contributing seeing to work the the is what -- workers' least lower from it view at claim

not No, really.

Okay. about other said your estate from or are should home answer employees regarding work From full is you in estate footprint I property infer of Two your where your property real is... real your footprint, target XX,XXX if questions. your that so

working people coming come everybody has But work. the no. to and encouraging handle a embracing and are time, allowing in are to Brokerage we that Gallagher at that footprints can these office same really more no, and like business be in. No, Bassett The and is people We're to agile flexible. actually moved agile to be environment virtual that.

Yes.

I think, the actually Greg, that the in number person range. employees home from of as people purely designated be are might X,XXX work

A part of is that GB. big

Right.

last answer, sorry, what I'm Pat? was that

big Bassett. part of that Gallagher A is

think harvesting there Okay. is out evenly, provided question, And this annual cash the spread the we the any about final, as from detailed forget. the I -- heavier it business out in sort cadence cetera? of before, Is it, first are I'm is you to comes just et or how and just a quarter, you've flow sure but energy the it probably

using the day we anticipate estimated we therefore, correlates that payments because those credits. closely more can probably we That tax less estimated do payment. than our pay And to tax would

correct? a quarterly basis, on done That's

right. That's

the next has Our come Hughes Mark with Securities. question of from line Truist

global you of renewal that the the was gave number premium XX.X%, sort the Pat, us P&C market?

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global understand And of quarter premiums, renewal asked that's Well, you I XX.X%, higher.... exposure right. that's yes, the rate that's second about and both

the right? have in X% Do that I was quarter. first That

I'd have up but the on that, pull ... to script

right. that's think do I

business? West Okay. also does say clean cheek, All right. seriously. I'll Senator, in this And he coal tongue Virginia the like slightly then Joe Manchin, but

I a this we'll it's I be So question the think part in a he's be or over to focus willing don't it. small out The he of lot to a does. a program of is, or think days interest he XX sponsor there'll months, change compromised pretty I find honest. that a as real is right? week mean, plan? a -- next got XX in

to done. get this I happens we but willing get think what see next champion? trying that a they're he's Maybe not, that we'll So deal week. something to when into Is

In anything this business continue you the wholesale, is at that X% unusual organic, will Or the within that there level? quarter? do MGA think

think No, some just pretty I -- of it's MGU... those and nature of it's the programs

should Yes, It hold.

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hit that starting that pretty It's lot. get the opening, wheelbarrow. opening, hail That's with a pretty is -- stuff Houses restaurants Mark, the economy. subject, contractors to bars by

Yes.

quarter on about pricing Okay. workers' comment in frequency how talked claims I the I hear did you And and flat? pricing. lot about other But comp a factors. then you of know

mid-single-digit growth it's showing nice It's amount, some rate now. numbers actually type growing. On right

But rates flat. are

right. That's

are happy seems partners and results. in that carrier grow are It with to to be satisfied continue to the line our

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

Just a couple of quick ones.

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be. difference contract year-over-year. some It an and in yes, would could on a is -- think supplementals contingents, that, on there our And impact I point have good that

So it's always good look at those X in together, not individual.

were So XX% up this -- but quarter together. together, they

XXXX? comfortable the a that be And breakage once Perfect. on Is factored that that question How with a goes reinsurance. into can in are then anymore? factor get the idea Okay. you we away second you

say behind us. would it's I

a of having holding job attrition the teams on good done in. not we've that. substantial really So We're

good shape on In fact, I in that. think we're

what I is an amazingly not good we So and holding team anticipated the job. -- together give -- them has we would expect breakage that team done leadership

about organic with after in that, sitting growth team quarter be -- going like years acquisition they X X second quarter in with months joined of into prior in that us. let's to And in getting That's we talked I've this out. X fact work December. the and more and to this is I'm about We're really, the proud generating and X% accounts the fantastic. that organic. really were quarter breakages, breakage had an completed to us to there there early left people on, thing, and they're that talking team. and X% honest, their business be happy

number basis There brokerage to help producing the risk operations sharing States I and partner along reinsurance to data a is And works better a that me we've team is. that the good discussion of our so fit is done the and and and pools on global a longer are the comes markets United sharing, on almost and would markets retail marketplace than in people with is this interaction the a unbelievable sharing of staying, our -- on thing our amount of The comment anybody a expectations. of amount in the exceeding that other it's the fresh look fresh us. how and multiple levels, together there,

But came That's large I in then June, Is a that question. one is this that last this next year? life And deal is tremendously nitpicky. positive. that know the something occurs deal? onetime

deal. Onetime

that I time, say predictable to time year-over-year. from them but annually wouldn't they're get We

Right.

remain... themselves they Then

I'm sorry.

they saying It's bed by year X, this want when whenever you've October it's put client. It's bind fiscal really put is buying. to have these with not all January place drive got in or They doesn't X. were calendar necessarily It they to to they like when bind. of by the the cases

be So quarter not it quarter. over quarter would over predictable

line the UBS. Bloomer Our Weston with is come next question of from

margin that ahead My portfolio With of X%. a I'm investments Willis curious XXXX? in X%? How follow-up currently? it than Re. thinking faster organic in potential should think potentially first you're core and business good we improvement one the is in growth there just on improvement? schedule, see margin above organic -- of on how grow potentially Could we Obviously, about Would come about the

XX%. around Well, that margin for the year is somewhere

with that happy we're that margin. very I So think

X heavy that takes margin that. think years answer for I It business. holding been investment. that They've the underinvested last right or for on X is the

go is on not back you to if margin expecting that So change acquisition was that business, that. our a substantial

us. and a But the I always there opportunities with become think ripe now right happy opportunity to are. we're going to We every Sure, margins right that they hire we We year. there's for thing they're space would do So hot efficient. that more join that us more think a competitive. now. way will It's like in brokers to be the become efficient,

to take nice be hire would it So and that folks in business.

we I where think the are. for year XX% it's

what disclosure more more on that now? or it. perspective a Or curious a just competition on market. seeing international Is Curious of maybe multiple sheet you're historical? versus M&A. Just is And from term seeing. the attractive on your is then follow-up my Got weighted on U.S. kind M&A what right international perspective you're

more about hat multiples not and the same throw weighted. the world, It's international around It's a can over. you

for Nice on Weston. Weston. being from hear Thanks, call, Thanks the you. to

again half globe for forward Investor second the being and All everyone Obviously, trust. again to look for us. meeting, in everyone, joining for excited. work, call thank of our at all, I for on partners not first quarter like us. September carrier our around you you of their XXXX. We I'd and all continued the to for Doug, by you a with our thank single like their let's -- questions for we're We all think I'd hard now. had thank way, ongoing right, fantastic that's to colleagues their the our our clients Day speaking support and to

you. call. conference This today's conclude Thank does

your may great Thank You disconnect you participation, and night. lines time. for your have at a this