Arthur J. Gallagher & Co. (AJG) 26 Jan 232022 Q4 Earnings call transcript

Good afternoon, and welcome to Arthur J. Gallagher & Company's Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions].Today's call is being recorded.

If you have any objections, you may disconnect at this time.

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. subject to and differ are cause that statements results actual materially. forward-looking to uncertainties risks could These Please refer filings to contained on in the forward-looking cautionary statement company's its XX-Q and XX-K, and X-K statements. for details the more risk factors

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

Mr. Gallagher, begin. you may

Thank fourth and quarter thank afternoon, you. call. earnings for Good joining our 'XX us for you

the terrific is We me call On heads Howell, finish the our as today Doug had off operating to divisions. year. Chief an excellent Financial cap a our with of Officer, well as

and adjusted our XX% of GAAP EBITDAC quarter, $X.XX, for X%, growth During reported XX% adjusted share up basis net earnings revenue, margin year-over-year, points. combined earnings XX.X% in posted margin XXX the Management growth. of earnings $X.XX, of organic Brokerage XX.X%, segments, up of we share per per Risk

completed XX estimated revenues agreement more quarter fourth addition than mergers $XXX annualized by our another million to and to of announcing fantastic Buck, best our totaling in acquire quarter also team We the in decades.

and the margin XX%. another XX%. was IR quarter Brokerage with XX.X%, our with point our review, is starting excellent Organic performance, and our Brokerage a expectations, our outstanding. will Acquisition give December EBITDAC me up organic quarter in revenues was points fourth does rollover Annual $XXX digits for revenue detail team. and some million, XXX line you growth were Reported brokerage double our Let XXX Day from explain basis include adjusted was on more segment. it Doug

you some with more P/C operations. me world detailed segment Focusing around let our walk the on starting commentary Brokerage the organic, and provide

retention combined our and organic, U.S. were and organic year X% of to business Risk the and less better retail new X%. organic Our client U.S. binding and last bit both than last year's by operations, rate business impact somewhat open business, about offset a posted Services, was XX% similar exposure This quarter. posted our above brokerage businesses. more includes MGA than programs X% wholesale Placement organic in and fourth nonrecurring our

strong retention year's and was fourth consistent business last New quarter. with was

Shifting to outside the U.S.

benefiting and businesses, consistent was XX%. combined, versus Net and Australia and nearly business quarter and strong New both impact XX% increases. new and from specialty premium production, retention. 'XX organic renewal U.K. Our fourth organic premium loss Zealand new the were up combined levels. was retention was retail business renewal posted solid reflecting Canada of new continued excellent business of organically, with increases X% last year above

consulting brokerage Moving to was Organic expectations. business. Day our X%, our benefit employee consistent IR with and December

was last year's and business to excellent. similar And retention finally, New reinsurance. remained to fourth quarter

our crushed spectacular quarterly organic too legacy double newly wins was month. the organic. And they had acquired earned a into the while it with recall business small digits. month that hard operations operations revenue base, some in reinsurance organic and first new a Our growth included reinsurance very were And December for off well

continues team combined, to results. So Gallagher Re outstanding deliver

grew organic in year best fourth came on outstanding So more and segment finish, our organic when impressive And decades of we organic X% in full with top in again, quarter consider all our That's digits. even posted we at you the Brokerage Brokerage double in X.X%. segment, performance organic year 'XX. full

to of Overall, that's the and global market both renewal XX% Fourth P/C have were X% exposure been the more change 'XX. primary market. me renewal on Next, throughout thoughts by consistent some environment premium rate up cases, the where with changes insurance combined, X% business premium premiums, quarters you reporting D&O than rates slightly, first let pricing in give quarter in X to X broadly line purchase current customers fourth one we be renewal the down but are starting the exception, consistent that's were with continues limit. with flat our are which some 'XX more area to using quarter the to of is D&O. weaker

with Exposures quarters also strength X indicating business continue to our first the in customers' continued 'XX, be of activity. consistent

quarter cancellations were In fourth levels. endorsements, policy midterm fact, fourth 'XX better quarter and audits than

Looking appear January, global the But than clients far are year's midterm and to job premium higher appropriate adjustments mitigate renewal fits with risk is policy their to increases trending and and level premium Thus increases level quarter. provide that trends ahead, our in budgets. transfer be last consistent help are an remember, these of endorsements holding. audit fourth

reinsurance Shifting the important renewals. to and January X

the peak month, we this earlier our broadly; premium pushed Not remove cat: But As reinsurers able U.S. in View late were in layers percentage prepaid top price from to discussed rates. only; was reinstatements raised up report of property zone cases, some and largest of some reinsurance increases cat additional second, to Xst noting to season. property coverage it reduce as published and saw surprising, were some fourth, attachment points complex the First, it's increases. X worth minimum very within reinsurers, reinsurance renewal Market many trends a sought programs push to named largest reinsurers contracts; third, saw perils

and team the most were the outcomes deliver to conditions double-digit to the clients. programs, casualty terms, were favorable the terms while single able reinsurance prices range tightening capacity our up tough and for market higher low of was backdrop stable. in Despite lower for more On side, prices,

'XX, dealing pricing that's conditions secondary primary challenging the primary forward, and the no including reinsurance carrier pressure doubt, on Looking during market medical tensions. law trends perils, our will, replacement convective storms, from social judicial cost with put in cost top escalating the high losses ongoing the to on materials in , labor, of with geopolitical floods market inflation, catastrophe raw inflation of shortages and wildfires, and combined easing system partners

activity So we any seeing expect to our price reason signs future. I contraction. underwriting of cautious continued exposure for seems not increases foreseeable and the are clients' there's mentioned Rather, it And as good add before, brokerage Employers unchanged remains and benefit quarters. backdrop and 'XX broadly the favorable. jobs to for Within continue few consulting business, past the our wages from also business is growing. employee are

services So robust. demand offerings should for remain our and

as today, to So be could fantastic with another X% in I the organic growth sit range. here nicely 'XX brokerage X% year

partners had fourth a like to more Moving than to a warm extend revenues. welcome joining very us professionals. and mergers annual mergers I'd We XX family and of new million all growing of on Gallagher tuck-in to quarter new active thank our estimated completing representing brokerage really acquisitions. $XXX of for our

mergers, For the completed about year, XX we annualized $XXX million. revenue of representing

Buck, agreement to HR employee a providing benefits very complementary an of and Additionally, $XXX business and administrative consulting million. revenues retirement, annualized we announced estimated services acquire with

to look our during quarter and second to We close colleagues. expect the new the forward transaction welcoming

Moving to and acquisition our pipeline. merger

than of know We all have revenue. nearly XX will not of term We representing close. these sheets $XXX signed prepared, million or annualized more being

lot to retention, some pro on delivering books. is acquisition we quick our better client And give will We share. you However, is a momentum. a M&A thanks full team relationships, rata in exciting fully for reinsurance continues story. expansion business. fantastic our excellent assimilated, believe and The be of new to I let for our to 'XX. an we client great in there's believe business year on clients even my the have get our a existing Needless comments, that strong a had we 'XX, track now and of reinsurance growth conclude wins before an recap fair me we're I say,

to mid-December fourth arising quarter a clients. from quarter, finish increased new expectation. margin wins was great was organic and Core new existing Management EBITDAC on claims continued organic during Risk to our our XX.X%. the Gallagher Bassett. quarter strong by growth adjusted segment, the Moving above pushed Fourth quarter at driven And XX.X% recent growth business as

So wins. some putting the out XX.X% of EBITDAC and together, finished from and Gallagher it increased the all XX.X% benefiting pandemic adjusted activity really with claim nice of organic margin coming new business year an Bassett

our should pushing our way. It's It and Gallagher to the Brokerage and year. growth of organic, and service full celebrated I'd excellence, culture client for year in XX% Management XX% and adjusted EBITDAC, XX%. year captured growth XX% full combined should the of another Risk culture. with in segments 'XX XX% is organic of XX% And some a results growth adjusted 'XX be regarding margins in in forward, Looking adjusted fantastic and teamwork, around adjusted culture XX% conclude excess that be That drove all-in be bedrock EBITDAC would comments margin EPS. EBITDAC in revenues, like adjusted

drive to and embrace It's way. that the will people day. We continue is us that have in, culture a our forward. a live Gallagher culture every That believe

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

Pat, I'll start to hello, earnings segment and Today, fourth fantastic close with another margins Corporate everyone. year. on our shortcut and the release, organic Thanks, A table. touching quarter outstanding out

CFO walk helpers our comments finish modeling few and Next, I'll next our for some you cash, I'll commentary at on for capacity also and capital management. then document, M&A first provide a a quarter items point through the up typical out look 'XX with

Okay.

X that the XX%, December. All table. drivers Page brokerage of Brokerage we Let's the X.X% in in the to flip X% foreshadowed of of release organic to segment earnings to organic above Two the upside.

operations. really discussed, finish strong our just and a First, brokerage as Pat within we reinsurance had P&C

update amount placement lower-cost our and the must our our excellence. added being placement recent update our the after annual metrics provided operational our of provided ASC is XXX insurance placement organic. the service post our policy. routinely faster headline related we at of and time handled assumptions to to of Based of assumptions services Second, of time in under point most being X and before on about studies, analysis, an XXX, of more of services Recall the centers more

amount but $XXX an deferred our we deferred be $XX of revenue less in quarter. relative causes to it revenue cause the recognized is does That million small point nearly additional additional our total This an revenue of thus, million, of a balance to and organic.

out we're So call today. the

additional our small also during some EBITDAC caused From be quarter. fourth and this, the updated boost an organic expense impacted. quarter EBITDAC our margin adjusted punchline net not got perspective, to The assumptions recognized earnings significantly all expense was a and compensation of revenues, XXX

that's XXX a So quarter. XX% of expansion, terrific margin points XXX headline XX% for controlling organic, basis and

to culture, still that to range, IR December that forward We're we the in Looking a and inflation X% currently we're and service activity. Add still client seeing moderation price not as Day. our not imbalances. and organic market for during slowdown our seeing labor clients' cost have we of in seeing loss 'XX, stated 'XX X% signs sales our to carriers, from business we are

our for Same outlook with margin 'XX.

X% organic with could can comfortable fiduciary deliver cost surge still are provided XX We isn't sweetener investment inflation. margin We at income and margin commentary. we nice there think and our expansion a about wage basis be a in December

our December revenues other reflects One [indiscernible] make pick announced The for at might M&A operates up EBITDAC for margin of On versus you operations XX, heads please for around Buck. our portion business so future pick acquisition of an what other XX%, a 'XX. that your adjusted sure we mergers.

on to Risk the Management at bottom organic and Moving the segment table X. the Page of

the organic XX.X% full fourth quarter year in organic of in see XX%. You'll excess and

to Accordingly, Some year rebounding XX%. organic the seeing clients' getting from the pandemic. still before we're back out they business approaching growth of saw 'XX, levels pandemic that our this activity revenue comes and for of

full quarter analytics XX% Risk the experience and we make investments adjusted of Flipping step-up the even We claim and in to X. see outcomes. drive as to better with year. Page in a margins 'XX client and The to the around EBITDAC Management XX.X% nice continue tools enhance for margin in to XX.X%

growth margin would of Another year. double-digit year terrific and another be expansion

total, were X Turning our December to to IR table. favorable In segment Page day adjusted end shortcut at the the forecast. Corporate of results

X non-GAAP see also quarter. You adjustments this

transaction M&A $X after-tax we related and matters. a treaty. of mostly legal discussed a And million related costs Willis after to gain second, million to little tax, previously, Buck our First, see tax to as $XX and relates you'll

Page on CFO we X. shifting posted our on website, Now to IR commentary our starting document

of fourth IR estimates. December brokerage to management close the quarter, see you'll our items are for and As most risk day

First, On FX. our first the the your dollar, of our we're results 'XX. strengthening as risk last you'll right-hand look A the sure FX models. side couple to how second impact year's in U.S. at planning see of consider midyear of in and worth highlighting: page, volatility With in providing half first make these brokerage versus some management half 'XX. Please impacts you're will things

adjusted our Second, rate. tax

to thing. tax specialty tax providing estimate given year it our the given making X, be operation. the 'XX finally, 'XX. And might of were seasonality. for still and reinsurance you an Brokerage rate left one is nice picks our quarter brokerage the page the the we With U.K. U.K. this The XX% increasing when our effective our in of corporate your to size of margin April quarterly retail our And segment your side do full make other a reference of London to during impact Management More rate. when for first current we're segment, Risk picks, than pandemic quarterly margins of Omicron portion recall

So we're the expansion much of margin expecting 'XX. quarter in second, as fourth we not in third quarter as and first are

Okay.

over come X. Moving the highlight is through energy page Page This And cash statement, from clean coming incremental remember, to the flow to our P&L. flows not those investments here cash the the years.

that credits of forecast available $XXX in a boost in million help of our million flow 'XX And $XXX December step about M&A. to using have year. that million That's later up a $XXX we should bit 'XX. that see 'XX really we and to each cash also tax nice XX, You'll as and fund

The might multiple, $XX another maybe which say at for million an would EBITDAC of way look multiple. cash, that $XXX trading it to math, million a free I then XX of additional arbitrage have combined current XXx our that nice the recurring at

Moving table. revenue to rollover the Page X on

in the from Most December reinsurance. of day our came that For guidance. quarter, all than rollover higher fourth revenues of came IR

translated X Over and additional for we're updated revenue books been weeks, ceded figures. for premium 'XX. the commission have That last getting 'XX, their closing cedents into

nearly clarity, is it results X, upside pre-December 'XX, of relates because which bump-up. from that bottom hits of year acquisition. incentive also, production no For because first -- And marked excluded of to the the it's the expense on said, that that the organic the of get revenue. and all not our please sake note to of likely terrific That that all additional line comp anniversary

results. X, year, team. our our actual transition shows Staying work by but reinsurance terrific to In bottom the the on Page impressive overperformed That's the team expectation. down forma acquisition moving table That table. a pro and

So now hand management available let December M&A. comments about capital XX, million. At me on $XXX was move to future some cash final cash, on and

potential us expected with which well pipeline opportunities M&A position, cash estimate our current during incremental In cash $X strong fund Our and for combined That to in increase Directors also our of flows 'XX, of total, would 'XX. opportunities. we positions for M&A towards paying $X.XX by borrowing include of annual imply an And That's Board per Buck. would yesterday, our quarterly over dividend approved an payout share. share. per increase $X.XX billion X.X% a

for fantastic strong So ever-growing from my year. point in pipeline, like Pat. quarter to opportunities for the with a extremely Gallagher and another we M&A well outlook, CFO, I'd are as you, vantage thank margin expansion to year entire great positioned 'XX. organic team another and Back an outstanding

Thank questions. you, ready think Doug. Operator, for I we're

Instructions]. [Operator

comes line Bloomer from question Weston Our first the with of UBS.

there. talked end XXXX. of growth growth single-digit quarter. obviously think I reinsurance It's you've And question the about the really for there my high market the saw you first is and So on strong

So of thinking end year think how change the did should that year? kind into level we the next you how of that growth? about going of be Or

become this think time are nice did fourth an in what jump. changing. some when the momentum. we not cedents momentum wouldn't to the a bank time the you're got and the done, my interesting going like clients, get in number definitely changing. I clients. actually come these But forth back I some pick placements a and some strong Attachment but tussling it's you like incremental much when we said those very with valuable And are you about through is easy I we up your and big because the going I are on as think But we new it's remarks, in business. in quarter, the more with to position are levels prepared with I made, trying things end, with reinsurers opportunity to one, terms forward, also

out as some you'd brokerage think my I hiring. noticed I then of well. lower the dropped some costs, materially. out question And offset called Is And revenue second benefit pretty within a compensation by Great. saves, as back-office percentage those ratio had is bring of with you I'm that how call way Or kind a where how to impact? leverage additional the question trying there can go each have an of to XXXX? do much lower in much you

All right.

down Let I but at exactly, that. can from you're don't if me front being of in talking have that basis see about memory it something points, me break out here. XXX I was when like

the I'll is Probably we push being going bring that to that Is centers of from continued due efficiency just up able our here. it work look to into I'm lower-cost excellence. memory, Sorry, that by X/X Yes. right? of

wins heads we've of make more area, that investments. X/X that effective put that came those result think technology And us to it is think and here. -- didn't as on help to I -- some kind you other have that in workforce I had to when then our that too, escaping the technology additional of a on right

there Got this like accounts, organic you that changes structure change make higher it. any market, in to I that. I know just, too? there's things guess, compensation the Is some

what particular, to they our force, pleased that people We're production messed with we a compensation No. in do. in arrangement over haven't well with And decade. our pay for

the from Our of next with questions line Research. come Autonomous

you pricing business acceleration want us brokerage and to drivers giving XXXX sit organic more XXXX? do those changing you see how year-over-year follow that and how today, as mind And you drove exposure on where some net I color XX% new from then results. up organic. the Would to almost in in

so asking you for the got Are asking So for Sorry, quarter? full just baseline. are the you I've the year?

the full for yes, Yes, year.

our we when and had right? new business new did, So here. business, at a the as exposure, I look year, terrific For I rate full

new say X rest spread I'll that about So rate remember points that. our between and is that and the probably net was of business exposure,

think again, about was over X/X, rate X/X So X/X, business net X/X. X/X, new was unit it, maybe, business growth is you X/X and loss exposure

it. Got

degree which income? year, XX organic, as have on And follow-up, move fiduciary impact a comments investment that from that X% the do to quick of of bps much expansion income about Okay. fiduciary on next you then thinking kind any how investment will margins

to of certain about But I can have think yet Investment points, of X line we the don't think clear that. size we to going I extent. a basis raise year. would XX when of our points the give a the income grow hiring and show next organically, sweetener a expansion guidance -- be X%, needs our on we sight if into budget. we that. We understand on of our pool margin

can you number be going So in I can't to number, what a but give care some that give next probably you of pick you able inflation think to be our of give think ready we're and on it, to I I more give don't a March. on wage you folks, you is yet. specific me year but I that take might

line James. come Raymond questions from next of Our with Greg Peters the

stick your the operating to you the releases press about In margin commentary. pressures on and that. going of some I'm the on on talked Page ratio expense X,

you is to benefits you're X% or break we where the expansion? your margin that about just you on get can margin international you it to out expansion improvement so expansion -- ability margin think to that's employee affecting in XX into where source like when guide going come And then is is -- the going you come think of based come get going that you do Or basis expansion, points can to going your on to where the business, it provided to business -- going from? So it or unit factors in the those organic, margins? expand how margin

Right. A things. couple of

On it fourth points the it, expense let's 'XX up XX fourth ratio, was basis on was points, in up about XX XX versus operating basis quarter quarter, that. to call

that entertainment, technology. and is mostly where in it's explaining think and from, travel investments I footnote coming some on use consulting the

that. we're probably that it's of the just the next is half how travel say you're I'd -- is So and investments next inflation think and When increase that consulting was seeing I half question it costs year. am in on that seeing I of vis-a-vis

the the still Remember, the portion we of in quarter. in omicron pandemic first were

first and second, going it little are up to fourth we our and So third see being we see more return expense a don't quarter, the entertainment quarters. travel significantly but in in

basis So question, there come your next expansion will XX points of another than year. we're at of of was X piece in quarters Most quarter. first that the the what Greg? looking later And was

so was the I is think the business retail think within look the RPS, basis the just international in different for the benefits, the about the of you employee where It it expansion guidance? that business, when units, at you opportunity margin Brokerage way, do that when points XX context or

Greg it's Yes, standout across no anywhere that's of so there. laggard much pretty in in a there there all -- is them,

Makes sense.

margins in it quarter, can other in -- Or of And folded first sort other or Okay. a the and either mean revenue that's is sort get any also the as segment, you the and cadence any correct? revenue the assume cleanup as question into going margins? I on add follow-up, of heavier to just Brokerage there -- color give we us sort how the of just you the Can I is terms -- of Buck consulting. are. flows how

Yes.

don't on spread accounting would really on we feel to conforming principles theirs, for because the XXX it. giving close have Employee of that this Brokerage that it first good don't We apply today point. Greg, in our our of have at to think quarterly quarter. our assumptions comfortable study to we're close So be call operation. I the a and segment Benefit we second part going to quarter it's that will our more a apply I the think

that need just And the to days little deal to need you signed I time that. until and XX ago, to more work I a through give just So we spread. quarterly March

Citi. Our next questions with come Ward from Michael of the line

something trying you're was capacity participants to pushing I guess, one -- if your about on programs wondering of similar. I restructure seeing or about back heard, peers talk commissions. We

No.

really. Not

really. Not

Okay.

of over that. you Second the how your discuss guess kind spend deal about in XXXX few hoping months. was It talk maybe I one, playing I maybe out this last has see the could And seems wondering, you accelerated drivers regard? behind

seen vis-a-vis still acquisitions of culture sit bidders maybe here last maybe, seeing have would environment buyer attentive say definitely XX months not number we competitive that I'm in say exactly a mergers it who is, and the and in a We seller XX strategic not is. competitive, But value the is, is it's reduced, what to I the what are the and days. change going would call, I the more to of that existed the that ago. buyer

at people we see planning uptick usually or financial by sellers tax quarter done little the to other things that's some are year, in But noticeable get names an market. there Yes, done. There that is fourth there right on to are the have a nice sometimes I our of get that push the that want the now. about driven in if bit the very good pipeline change really looking of a end we as by us. would say feel to

year, change in strong of in going this saw in an of quarters be a I first fourth relative the we to couple also quarter, bit little what a naturally, So bit. particular. little think it's the market competitiveness the to But pretty year uptick of in

the of Wells with Fargo. Our next come questions Elyse from Greenspan line

Maybe on the sticking M&A point.

in look multiples to sheet, bit? little you're XX, the the announced went of seeing XXx write good Xx, to driving commentary market what up guess, late. of have are XX from X deals the a You I on number you optimistic I also you seeing, a pipeline, CFO multiples and up right, that's deals if seem guys pretty on the you But with

seeing mix performing growth another. it's or factors way to think I think bit a it pretty we're bigger it one are seeing overly in wouldn't little that I react that, list is one high they the -- some the turn you're what than on the But where is on were past. maybe now right names

guide? XX kind of of margin the within you your wage points basis with for then are to And inflation that assuming guide embedded expansion, any XX

this X Yes. We're to for assuming years. that year last the raises we're have similar we paying what about

I numbers. in Also a I that's Day. -- the December IR small the little So a did in vignette did during that,

If toggle as probably basis points, underneath you that Software basis be XX a to against there's XX that, that we too. might or Service really look points as XX

in like does accounting the bit. So of expense that a influence charged that where maybe it's gets but points, more XX little basis

in You I talked too. that about December, and I think,

then similar And year, been side, companies. in increases right, premium you at saw reinsurance on but really with the don't great perhaps increases primary XX% higher the X, strong to January And seen less we've market. think by into we've I we also environment, retentions where rate have price a the

environment all you you does an when 'XX So put double-digit could within like feel together, that where show organic growth your business? reinsurance

I we could. think Yes,

of Goldman Sachs. with line the from Rob come questions next Cox Our

very retail could U.K. XX%. And that first wondering and question what's on organic about Obviously, was a talk the little you strong. driving of just I specialty is if growth. My bit

Yes.

also our whole across quarter also. as with there year. did our well just Kingdom But in this As it new U.K. operation extremely close And London-based strong the aviation were we've just retail But phenomenal specialty to And in reinsurance we very changes the said, United term some tenant team business very, think I a is crushed the rate specialty like. aviation specialty talked increases. and set just earlier, the the team,

is in And your what organic just companies are rate instituting unemployment curious just market. of guide embedded I'm great. on number of a the layoffs. type X% That's A of And growth? X%. think would labor you the impact start organic year we some see in we start in potentially to your do if to to what did see erosion there, at point question that

Well, prepared It's again. comments very me our just to let back very, up interesting.

layoffs for the newspaper. And all we segment business, the same right? the that already and I've the of all, much previous the in not we play in in same big you're Employee don't seeing of quarters, Benefit making that we're news it's a us papers, First see as high-tech that reports. are in terms And said

is keep forward, we're business well, both seeing -- the endorsements business, see very well. policies core doing middle audits doing and our in our market, our market, and midterm our doing However, clients these we people -- we middle going our extremely reporting and what are changes and very, renewals benefits casualty our property as to retail, are

counts up. Truck are

is business trucking very strong. Our

comp payrolls terms renewals not in Our diminished. work being are of

if recession seeing not mean doesn't in is, we're it won't this that global point Now it us, in will. of there a that impact But course, that. at fact, that time,

where growth tell could go me pressure. we any do recessionary don't if of plans you, ask as present forward So our type that on you this count see on we that year. wrong. be And an impact I'll at

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

This Andrew on Yaron. for is

Just there? good pickup looking the specifically. kind in in quarter Can been it in what's organic which about those reflected looks there's you're yet? a at year-to-date of and Brokerage, we talk to the And and on degree like going have hires been head hiring count pretty roles

Yes. that impacted M&A Well, of by program. a are those lot our -- considerably remember numbers

strong quarter last close be numbers numbers December we impact numbers, December year's and X. and on would in as M&A, would year the those So the the in out not that

as that I And comment want on to well. would

in are hiring. undergoing organic new We not an surge

strong internship. very a number people strong We bring have young very year. a every We of on

hires, Of always good course, activity organic not M&A Doug that are seeing beyond head but solid production the looking just mentioned. surge we're our for you count

based supplemental underwriting on of and we suppose profitability of I those as programs. a that about think contingent is commissions, part And Great.

next kind course more bake think a loss trends is when there that forward loss about into trend of guidance broadly, there? of So view the maybe you on Or what the year? over your is you 'XX,

you're trends? Are carriers about loss talking the

Yes, our contingents.

relates Right, contingents. the to that

arrangements, of are. And in increases profit-sharing loss terms not say factored to to subject our date, we contingents probably nothing having are in in, ratios. significant typically our operating I'd Supplementals

Our line Mark next from Hughes come questions the of with Truist.

Another the observation? the primary expected as that CEO reinsurance P&C something you that builds property carriers. the impact up as rates is time level? could by the you Would directly share goes get firmer quarter reinsurance higher the Do maybe market do think much on might fourth he rates didn't suggested the increase you as in in but of dynamics, in light that's see property have

reinsurance think it fire. as is particular, are is yes, had is pressure that to to fourth say exposed our get in anything onto difficult I situation. very and property do market was could in lot retail going very very the any buyer. difficult was in this. we what a to the quarter, the changes it of Coastal, will additional extremely it in in And to I property already difficult with more firm, telling This that firmer. a at And wind would terms filter And, X/X early area buyers about exists. get retail out

Yes.

hadn't at full think loss. you that of our of were Ian billion the $XX November there the If in October replacements -- done quarter, fourth quarter, right had beginning that remember, and fourth about the hit the were impact

it's think, last spillover impact, an quarter, then, I quarter, And how a that do ? effect I reinsurance you you Yes. you this Pat, Yes. potential whether commentary but much on on mentioned don't of know think updated having on market, casualty. your casualty, the

I able that since have that are going increases, happening. to of number think a that around order don't this possible that for the have some that's end I to these in to other yet. I carriers pay be property tagged. be told it better on maybe lines that. have it's I I'm being that feel number Mark, And not first may to I'll of on at And a think by our be quarter. wrong that At the point, just

Citi. Ward of Michael question line Our final will the from come with

quick I in for maybe potential follow-up reinsurance. a double-digit just had and growth the Elyse's question on

that's in there? achievable to about to the might that with order if current kind capacity as if incremental to market need should -- think being come capacity if wondering get or of we Just

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down. now not of the on season It's So existing down. it's is capacity, renewal course, winding but largest I over, think winding

going capacity. the could existing think I forward so increases off do And come

quickly add and However, having said and very will that. utilized that, be any would to be additional capacity would welcome

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then. you and to for us, thank with So talk we'll being you

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

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