Arthur J. Gallagher & Co. (AJG) 27 Mar 232023 Q1 Earnings call transcript

Good afternoon, and welcome to Arthur J. Gallagher & Companies First Quarter 2023 Earnings Conference Call.

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

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

today call CFO our On as divisions. for the heads the Howell, of Doug well operating is as our

the We first excellent quarter to had start an year.

we combined posted For management organic growth risk brokerage X.X% our in revenue, and XX% segments, growth.

share XX% of per XX% XX $X.XX, year-over-year. earnings up of of share adjusted up per margin EBITDAC GAAP points. Reported adjusted margin of $X.XX earnings XX%, net earnings basis

annualized of the most We from time, and also outstanding ethical thirteenth completed the estimated are revenue for an recognized team. XX million $XX the company totaling we as world's mergers quarter

right growth rollover were we our fantastic EBITDAC was March the our Day starting A quarter our on was $XX million. XX.X% for first EBITDAC X.X%. Brokerage IR team. on and Acquisition more performance revenues me Let some brokerage Organic give XX% adjusted segment. of revenue Reported XX%. you margin expectations. with Adjusted posted growth was detail quarter

Starting brokerage with you operations. our commentary more the on and retail organic. some world detailed Let me provide brokerage around walk our

PC the business year's over organic. posted similar lines, Core growing was first X% renewal over new in tough was U.S. D&O business even last retention Our compare to quarter. up year-over-year, while

business impact and PC premium due renewal business organic increases. X% retention continued the production, new UK also more stable of to Our posted than strong

Our Zealand were in new quarter consistent versus XX%. Australia first and premium operations combined organic ahead renewal with of of increases PC business posted year New loss and XXXX Net prior levels. was

out solid the business, retention. reflecting and PC new Rounding consistent was retail up Canada year-over-year organically X% business

benefit consulting posted brokerage global X%. Our and business employee of organic nearly

and with growth strong our excellent. across in practice saw and HR pharmacy of client was New retention We benefits. business many groups remains particular strength consulting

MGA our businesses. our businesses. services, to wholesale and and in operations nearly and our posted This about includes brokerage U.S. X% organic placement organic XX% Risk growth Shifting of open in specialty Wholesale binding X%. programs

production and both New with retention business last first consistent year's were quarter.

UK benefiting within specialty new addition risks. posted aviation American from a strong start teams focused organic of North XX% the on of and

Pulling great expectation X.X% our organic the quarter it finally, Brokerage reinsurance, property bit a all new hardening XX% team. Gallagher posted Outstanding end and above first retention top that's fantastic quarter reinsurance results wins, and the all organic in business And Gallagher by reflecting of sales market. a the of Re from a together segment team.

had change global me exposure rate the first with the the consistent were let both up to X% insurance premium than XXXX. X% throughout and renewal environment, on reporting primary Next, renewal we some starting that's provide with pricing XX% insurance combined premiums PC been thoughts more quarter Overall, market.

the premium product remain major globe. Renewal across and broad nearly around increases based geographies of our all lines

Two are mid low the single lines are previous trending digits. low double so liabilities up general For to quarters. digits, single up digits, example, in package most workers' high Umbrella exceptions. similar up comp to is and

First, renewal accelerating. bit are premiums a public second where where premium property, D&O are increases and down renewal

months first quarter the property we premiums and of XX% increases XX%, fourth example, up through were renewal For have XXXX, XX%, XX%, seen and three respectively. of

cost increasing related continue events to frequency the signs So, pressures rising here to of pressures abate not reinsurance to weather values, that lost severity replacement costs feel and due and We're term. likely conditions. these are near and our profitability clients seeing hard in

property our largest clients these we and as So mitigate navigate on we are increases. head helping to quarter primary our insurance premium focused

Moving to exposures.

business customer's are continued activity. strength seeing We in our

and levels quarter than than cancellations First better quarter first increases. audits the greater combined were consecutive of year-over-year mid-term endorsements XXXX eighth policy quarter

reinsurance. Shifting to

and carriers so to in Japan renewals, heavy pricing the and compared of lines range even continued January territories centric and conditions. across a all business, increased focus conditions terms harder broader X. on During to tightening of reinsurance April most was This

capital. the markets. The in market saw demand more orderly a to although market traditional pricing to casualty supply the underwriting renewals The typically the property continued attractive was capital and There trading green some its enterprises. were ILS underwriting fulfill than of sufficient shoots less from recent challenges to to limited issuance, due CDs experience

much market website. managed the satisfactory secure cover. to market market customers navigated regardless, Those interested and our April first new view property report commentary at teams capacity find more again Overall, there wasn't can in our entering our the detailed hard

cost they from to cost lost events, good tensions geopolitical as forward, trend. a for contemplate Looking view weather inflation social foreseeable reason is future cautious carriers of expect and stance replacement increases, into recent underwriting ongoing their the there

while reinsurance likely expect and pricing we to XXXX. early XXXX increases into So continue throughout and insurance it's

remain also XXXX. We on our customer's business during activity optimistic

business activity in indications We have far yet to shifts daily see any thus April. client, significant to of

We suggesting remains our favorable. XXXX are the benefits broadly for employment for seeing clients backdrop levels economic encouraging also

Unemployment declining. rate shows U. data Recent the S.

gap in between the number and very the growth amount and wide people work. a non-farm job and for looking payrolls openings of Continued unemployed of

workforces see I strong. for motivating demand products and attracting, around services retaining, our So and remaining

that X% be fantastic here sit XXXX brokerage to would and year. we X% another in segment range we today, that As continue full-year see organic to

quarter in extend our brokerage tuck Gallagher for welcome thank us new of completing active about mergers joining mergers very and Moving family growing to professionals. $XX warm on a to had partners representing I'd revenues. annualized of to and new estimated acquisitions. XX We our million all an first like of

April, former the deliver officially business and HR with will our human welcomed capital existing brokerage Buck for superior better in of benefits consulting combined offerings colleagues, we we to enhance our employee all Also be positioned solutions our clients. and

sheets Gallagher. or of very they choose more we'll Moving million excited pipeline, a to prepared XX be who representing $XXX with, we annualized Good nearly of firms have and revenue. always term choice if signed have partner our than to to join being

Gallagher Management segment, Moving on Risk asset. to our

of growth ahead to continued cyclone was growth revenue organic our wins expectations quarter flooding. XX.X% some business first due recent from and Zealand quarter from New new First and

new increase quarter digits in core saw for We across both clients liability. claims the single also during and low existing workers' arising the comp

also up our adjusted a of bit strong EBITDAC expectations. was at ahead quarter margin XX.X% March ended First

around above Looking and XX% year. that see XXXX full-year adjusted and XX% forward, another we holding would XX% excellent up organic to be or EBITDAC margins

the for I'll globally time. be with World's just a Institute. regarding Companies Bedrock culture. very one the thirteenth honored comments to were And Ethical Most ago, XXX of some our to few from we Ethisphere I'm companies conclude as weeks only this the recognized award We're receive pleased that

colleagues unique plus have celebrate and XX,XXX embrace company. the we instilled values our that Our in

culture Gallagher success competitive way the forward. that our to culture us global and differentiator is a unique today the and That inclusion and articulated in to tenants it XX focus, It's a way. and of drive we believe drive our continue team's strong key client advantage. is Gallagher The a continues excellence,

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

Pat, and Thanks, good everyone. afternoon

comments our I'll the for capital margins to some year. that management. provide with with an on and on comments organic earnings cash, in As my M&A remainder our release and Today, post start some commentary Pat document and I'll modeling both said, touch up finish helpers capacity our Then of I'll using excellent XXXX. begin the CFO we website. typical

Okay.

flip and Let's foreshadowed of from operations Call upside specialty the the nice we benefits. All of earnings reinsurance little release. right a of Day, March at London XXth top it our X range our brokerage at page a end in X.X%. finish to organic IR from the

for One call table. didn't three this on that grow quarter organically reasons. out Contingence

that million. between there's contention First, a $X and call little supplementals geography about

at bit a Call that the because X.X% at first difficult our million XXXX that's And compare. year and $X programs quarter to and towards organic in back here pay million. we ratio estimates. by of a as expecting again, from QX third, large XXXX maybe of of XXXX development in team. was a not underlying all prior a are a Call positive base there Second, the Regardless, one that fantastic in that's X.X% little quarter of deterioration. contingent in loss XXXX, causing

XX.X% for That's XX in with And quarter, up points IR acquisitions the expectations quarter Brokerage weighted. the roll first that's that of of of the Hoping expected when pandemic Omicron XX segment EBITDAC the FX, tuck adjusted lower and first in we quarter. at table. adjusted right posted our XXXX release not earnings March in were first basis to points to discuss that We just XXXX. margin here rate simply Day seasonally our XX the quarter X portion don't we run in over up than before as are expenses points. FX basis line page are still our But because in they the

first Maybe items, XXX it our looking levelize points. a approximately like from be If for quarter XXXX two will those you margins helpful. expanded bridge at basis

basis of XX Organic points that Investment on expansion us to uses XX expansion Omicron the normalization seasonal basis expenses costs XX of Follow quarter. of basis margin points. The investments rolling wages points additional points. and gave that used impact XX T&E XX gets and the The from and adjusted all inflation income close XX mass basis basis M&A you points. T&E us IT some in about gave bridge points about FX basis and expansion. of us

full-year up still it's bullish forward, margins XX quarter a commentary more XX brokerage with fantastic to X% posting makes Looking and on combined points X% to first that us up in pass basis basis adjusted range with hitting the early organic points. yet

on Two small heads that. up

no might X% revenue so new for the full-year fourth the First, lumpy three we in life there's next to accounting getting in to of year, here. sold XXXX. case quarter. you news our given then discussed XXX that little with quarters organic over the both large a We deferred those And be last the QX X%

modeling. Just a your for reminder

the is naturally which to Second, runs of impact of points margins. before XX XX lower expansion in the margin roll Buck, recall basis

year Buck, would you when margin the points range. So full to expansion include show XX that in math basis XX

the moving Risk table to the So of segment page Management X. at on organic and the bottom

of most get QX in Zealand XXXX fewer arising excellent As this comes and Pat because new quarter (ph) wins growth claims claims also the activity. [CAC] quarter, organic But caused business second some little a in tailwind did we year. an half this New XX.X% excellent We said, had result strong from Omicron last

Management XXX for to of of margins EBITDAC QX margins, That's page over points put As basis last release. X year. posted earnings Risk XX.X%. adjusted up the

As finishing a XX% now we range six the we're adjusted of history. year forward, full-year bit the above in would seeing the decade rest to be and Gallagher best organic XX% in That margin margins asset that full-year look XX%.

excellence. Another operational and of of benefits demonstration the scale, capital, technology intellectual

Let's document, are IR turn the CFO the forecast. most segment of release. also, pages our with items X commentary X look Corporate earnings and Day to page a in take of and when March That's of X at line all you right our the

see in is you'll rate. But what UK entirely to effective on X, the to up went commentary a tax the expected tax When tick effective rate. effective rate slight seeing Three you remember you're CFO callouts that XX% That's a Page our due book Xst. hike document. book April see

lower. and cash because incremental the of Page paid and energy that of substantially purchase cash flows our rate X intangibles EBITDAC. of commentary CFO credits. Call of around our the shield combined management amortization from clean the from taxes tax Our That's the investments adjusted over tax those is years. brokerage XX% risk coming interest, the shows

with XXXX in that really March to we're as shows fund cash year. to a use step million XXXX flow about future million million of forecasting a $XXX over and help That's XXst, it a have $XXX later $XXX in sweetener M&A. each to nice up in We

the to quarter segment CFO in midpoint, you'll Then that a if you see Corporate compared timing beat. of document, flip that we beat the page back X slight commentary but our this on some had to

So the same forecasted March you'll what IR we as about see still Day. full-year our

remember, of X we've that future that estimates. now million also revenues. table, $XX our March need to shows you'll forward, looking but Day. included page the to table now other rollover estimated which Moving during is commentary this pick Buck for IR document, to M&A in your And million M&A shows these add to we It pretty CFO quarter, that our close $XX

some Let billion, March XX, to that management capital comments $XXX me in on was At used April. hand M&A. around $X was to available move and cash, on future million early buy note Buck cash about but

So another about program, XXXX M&A early call in to fund have it our $X we billion investment $X billion debt year of and incremental for and the $XXX million. rest our fund estimate maintaining This look free is that more usually we our M&A to strong this grade ratings. more or utilizing while cash only means

doing statement. so our on IR reclassifying we how statements. align our are their sheet balance that mentioned re-classes March how geography, present cash during better other in we with recall fiduciary many reminder, These balances would Day, GAAP brokers our final present presentation to be purely our and we're flow One and we

some public page XX be XX-Q of and sheet the gap that our we our the week. most will file recast their table release. a might consistent presentation understand that other just all of brokers comprehensive help with changes in You make to movement all of earnings Again, you more on this notice the balance of movement in of geography. To of the all there'll later is next

So my those comments. are

quarter year. M&A productivity strong another well pipeline and culture. great see an very terrific organic fueled to a we forward, Another growth, continued of we for believe positioned are by I improvements, opportunities fantastic looking deliver amazing all and

Back to you, Pat.

for Operator, I some please. ready we're Doug. think questions, Thanks,

for is call [Operator now Instructions]. open questions. This you. Thank

question is UBS. proceed from question. with Bloomer first with Please Our Weston your

question think case move you relative expansion XQ the through the expecting for as we margin Is can moving previously just and think My should expansion on year? Hi. about Buck XXXX. or is largely year? being you'd full-year that as us the the we about to Good the go XQ first of guide to afternoon. still XQs. margin you're How I think lower that we the pieces excluding help through cadence

Alright.

quarter-to-quarter. So we question? extension Is that me do how you're about asking margin the the fuel

Yeah. More plays as in on or of just of on nature curious margin kind less, well. the the out because you I'm highlighted how some lumpy that organic.

Alright.

Should can dig have here, I right this. out it's apologize if see me Let quick here. it not and that on for you I

-- towards a I more flat XX the in think I'm I second that looking second think that stand maybe third -- upside, by at we'd probably the have basis more and here. In bit quarter quarter, the quarter, points then here. I little maybe what and fourth think, is

to Buck's And is seasonality there margin as any well?

sorry. I'm

that. Let probably XX the in and of in X, me looked second just the fourth. at there XX check are expansion maybe I third in basis XX points I'm quarter, seeing the

previously include does said run Great. roughly Buck well? seasonality that think as was And rate. it I you had to

That’s right. Buck. That includes

I'm million growth curious that And a I I'm assuming sense it is few there, if Great. that's, or per other how deals how Okay. you table you the acquired quarter. revenue a is in call that's growing? can $XX but quickly that's any growing? for assuming Buck Buck give business quickly see currently can to of including in

on mid-single do discussions, a give beginning pretty pipeline. digit to last very them across Buck to on in pretty to It's have They QX five Yeah. like, already been revenue going on This year, year. little built early growth looks best last very organic lot [Indiscernible]. then already year. engagement but is We're with quarter in strong a world expect country the have this We're the together. growth the of deals have has across finished business. synergy U.K. sales what communications the last their their and last just a early this strong we in They predictions stable years. stages,

questions. Great. Thanks for taking my

Thanks, Weston.

Thank you.

Our next Please Elyse with question proceed is Wells your from Greenspan question. Fargo. with

But few just Hi. to the basis about points were said confused. XX Thanks. question, response the then XX year. you points Good expansion can Brokerage XX thought XX evening. My quarters. to for first points points I'm basis talking expand next in over points basis basis of question, maybe you sorry, basis XX I margin, Weston's to

that XX is to the Does one basis answered at Buck. points basis XX we're Question margins. without the for, they that question we was Gallagher lower looking that how points right. is from Buck That The run naturally because All math results before help? Weston.

well you. Yes. then sense it. you're over as the you outlook, us few when in quarters of the QX. Thank saw Can we Got for there keeping That as organic just you're the of environment in helps. compared expecting give for And Okay. stable in of think pricing next the terms a the still general what XX% just kind to about a the embedding range economy year. what or you

this Elyse, Pat. is think, I

think lot I stable predicting of that seeing environment We're three it's that sort a we're next not rate over reduction. of quarters. a just the

are way, country-by-country. they are day-to-day, about insurance grow being rates around continued, We've you the and and pressure this. those costs. out United the particular. And the businesses States can to saying data our market continuing clients this in been we're headwinds a by seeing tell interest the robust, recessionary by and one the We seeing not off, we and middle higher backing not geography-by-geography, in of even I'd point insurance little line-by-line, higher costs Those proud are with are

we prepared over like that it's remarks So, quarters. I market, about the view reason going that three it next way think that the firm our for all commentary enumerated, a continue it to pretty way same in our being looking we

think, I that the the know guys have of generate energy kind or could there of kept you expecting that related Thanks. tax clean more this kind guys credits expired and to of point? there or end the That's you the helpful. And then of Is at your not some ‘XX, I at plants you investments still laws right guys, potential have right, open. you

generate out bill service. all into an this that preserving come allow or energy that us year. could there's credits We're a be the of back bill tax reconciliation put machines something those yet to might Those if plants tax

a Do think that happen? there's you could high probability

a if high there's in know don't probability I getting Elyse, anything of done Washington.

would So another sit there. out plant high there I I year. another they probability Yes, coming for mean, if but put on so, of that for there sits hope year, the but wouldn't anything I

color. the for Thanks

Good. Thanks, Elyse.

Thanks, Elyse.

Thank you.

question. with next Our James. is Raymond Please from Greg with question Peters your proceed

everyone. afternoon, good Well,

Greg. Hey,

results, recruiting producer us So, I the employee Gallagher. and a about that's update you get I parallel don't guess I just think and maybe question, have gas some if inside as of And announcements there back about retention, maybe those in could talent J. into before talk I Arthur in was and you so c-suite step wanted think of how I promotions the think could on an the to give Pat, in some recent progressing tank, provide you, some and, of plenty well. context I announcements left you

Well, first, first, let couple efforts so our me are Greg, address things a recruiting ongoing.

recruiting We look the a if here, in will producers, about showing probably up States, interns United globe, I in the XXX around it's are few excited interns. the begin fact our always like that weeks XXX more

As and to consistency is we there of very you and continues strong, know, strong. be group, well our that from heavily recruit retention

of new we a that producers, do good good more nothing than pipeline So, efforts robust regard we are way in have -- normal. any in of a the landing good to announce a and job

good think that. I really I about so And feel

I believes in that In place places a we people offer think growth terms people still their that. producers, very that retention, we well one of in for retention to do We're of great trade, remunerating strong and and books. acquire the pay of very, to very,

level people and about production I I have the about new retention I with So, very we about recruits. are. feel our that feel that good the our feel good hires, good

was make article, I don't much. CEO, the to would I the say of on you great. an just a that simply and lot know very feel you relates it and comments not stories, announcement, Thank that. Greg, As I which I'm think we news

has environment tables, rate posed I for in I rate with look interest landscape for will you M&A. expected in from We about what Can seems much. the, like you it. the at multiples on on prices talk your how are outstanding, and on M&A. comment know XX have And every look at Doug's you this Do almost are you term the about, changing you change but changing that of like multiples the term sits pay? talk it thank marketplace? quarter. so you but my follow a can guess, kind quarter, the sheets comment you But view talk M&A commentary you, about deal I environment willing you think, it that the XX interest or validating sheets being every to might CFO your doesn't you're question current the how perspective

will. I Yes.

the on slowdown of week reflects article XX%. -- after First seeing that. more That's are which think put first slowdown I in I some so do M&A entrance. very of the all, is If a in deals number the active we're done read less the me correctly it's, of people active now. have a in I some who about that in think business there let are I color are insurance been past a There number transactions, new year-after-year-after-year, think ago, quarter entries, about some the being PE down more

multiples. we're in those present, decrease a not At big seeing

If you you today. have ago, months XX still XX had a people XX bidding on property

that do anything, supply multiples will now. believe think are And and impinging that so, continues but that interest demand see way and to you like if rates come not capital, I demand, doing decrease down, I that they're some that, in right

it. for answers. Thanks the Got

Greg. Thanks,

Thank you.

question. Please question Zaremski your BMO Capital with proceed next Markets. is Our Mike from with

good Hi, afternoon.

from dimension percentage that seem doesn't taking that your touch that can or on continuing like rates stats question, guide and any side, in you're revenues I'm in the way about what of Brokerage element acceleration your of you maybe prepared Any organic First the acceleration remarks, talked property or incorrect? accelerating. we it

of be in going quick, percentage doing mental here to the some our there around XX%, is math the of book we also P&C our something like units. can listen real around somewhere include quarter, give Well, that package you book, our just I revenues first total in is property

out things of we there there our the that increase. rate mitigating pretty at do and is good that One all some guys of is do

So, you down commissions XX% you because XX%, when creative rates property something or that. programs it, XX% going deductibles, might increase you you look up bring limits, come up are that you up some at see XX%, going like more in

So, there. that the where between get and of commissions premium that line delta then there's is a direct a business the correlation we increase the

think a time here. I very This good XYZ we in -- Every piling that's Rates I'm up get is, that Pat. XX%. That's question. point. firm are a market, a very, on in

You're is X%. at and job Why showing our the to XX%, we're on that? pass good Because that. is not

Got it.

the -- That's that thanks reinsurance? excludes Doug, for Okay. and answer, that

That's seen already But our you've math. right. most that are reinsurance Yes. renewal, on of so

it. Got

jumped that than too investment I Maybe I number run book there It there's there because have is the know but rate? the been noise there might might income missed new income. the late, some were investment on Follow-up expected. with was in right a balances I -- better Okay. if fiduciary I sales was minute looks this, any now. have know help two. it like on this some

some truly you thinking we help should there? be need So,

right. All

So, book sales been have would tiny.

the about like sales this something of quarter XXX,XXX think I book amount that. total bucks, was

numbers, our at influenced have wouldn't in it that all. So

Our investment our funding includes financial face businesses. the on premium of statements income also the

translates into number. that right So, that that -- invest of you will amount so income the

face of incremental that you additional on XX% investment investment Just income see real, is and the of XX% as and income. what take

not the it is When in of as you you it year, second so about the quarter. look half in the tick-up year, first follow is the month for year, big investment at rest what and of starting here the means interest the dramatic last through the increase rates if income as last

were on look be lift, organic expansion the from margin XX maybe if So, XX to our full investment basis year I for that at of basis year, impact of points income would full full for year. points invest about income

for basis quarter the basis XX XX points that. So, up year would it you something full here fueled see XX can be basis and like about was points, points this about to

just, last Okay. one. well, Great. maybe And quick

forward last Given Gallagher, what should in margin margins be a to profile there we percentage much of up its there deals. you do way has to guys maybe deals headwind dimension sometimes improvement or Is how going the as like at years. continue better have to few Buck expect Gallagher over look you shown than guys a to, the there a similar

No.

look pipeline it, I and looking back, would think think next you Buck. to if that year the you standing January were M&A project of of at excluding our we I be in rolling impact if what's

expansion. points of So, might it use to XX basis XX about points all basis margin

So, it has the a on significantly smaller quarter. year in so impact seasonally first large the full because we're

you. Thank

[Operator Instructions].

Evercore. question with question. is next your with Our from David Montemaden proceed Please

just question the Hi. Thanks. a had just I margin. on

the full points like the maybe that ticks have we So, for XX offset first year, point we I basis I've And XX I'm about understand, here to in XX basis are expansion Buck points some guess, point basis yes, headwind the guess. then, Because, about Doug, to so contribute of some organic points to got, Could the basis XX down is I basis that points sounds that. XX headwinds should XX that tailwind this a from to to struggling forward? going margin like basis points going of other income fiduciary the offset year. the you XX quarter, to get talk

right. All

look So, of if and last if and back-up were in already a and bridge I'll are were this about this of here to We of quarter, about way. X% ‘XX, think kind right? year So, we standing at couple X% more. it toss -- some quarter the range, the from year we're maybe in components we first seeing me let just built looking January that we've a in that in say, organic talked a

points, basis not said margin of basis we income that year, but XX points, where investment XX give So, basis XX for full points basis expansion us maybe XX would the points.

full point. We margin acquisitions we XX you year, about business in points XX a of expansion, then points let's points to on other the the margin basis I about the some expansion. may regular say throughout half Omicron of T&E normalization basis doing XX would T&E to basis expenses maybe and cost as inflation Buck basis to of but that were excluding use got of year. tuck-in told to second last impact rolling the maybe the XX That think back

we That basis some raises expansion. -- margin talked in XX additional maybe organic of we XX to a about provided are that pure that quarter. then XXX XXX just basis basis those basis without last points gives a points additional organic things, And to you making points points we some

are are additional quarter points margin ranges, a to basis Again, those that year $X XX that points full points points use XX of the basis for the that gets of to some XX to back maybe FX basis $X expansion expansion. the million bridge all adjusted and basis We XX follow you maybe would making these investments to IT year. margin million for

layer you'd that Buck, get and you you margin expansion in mentioned then So, there. would to that down that

we're a not bridge, the and get some because have impact ball, that some of goes back and it's next some investments. January investment was type has impact, year, but of crystal organic, from T&E that a little income, hope you a I you of I from get if lot rolling So, don't -- you and range making

we margins have in still five I knowing would So, out year, and if and we XXX point knowing that opportunities feel personality, look I'd basis say have would as XX the year confident up January probably points would more that years, we in to XX Buck would forward. I next my we me and up productivity more that basis expanded probably being basis ended points, ignored points

but in that wouldn't nine to year be can So, for a us a months, change post. great lot

that on So, kind listeners of are that's my this where thoughts models. helps the those hope and I the that, help to understand you hopefully and are coming on that from your will that build all pieces

quarter. that a above said bit did Thanks you like Yes. organic X on Doug. about chugging sounded, It it little is in guys' follow-up, else along. really That sounds were organic I helps full-year you comps appreciate on should after we think the Is bullish Or that this being the rest of I think the I Doug, over you thinking the hitting the a that, increasing Maybe you from premiums just mind that you renewal say as that. a growth also lot. back X The anything about to economy chugging holding your for that outlook? tougher just that that outlook you range that is there that's year? or are is were along.

revenue accounting on deferred cases. from a in fourth quarter the think plus XXX maybe the I the life

two we come in like mix when a are of even before we a -- cost sell the XX say Now got more lot we of maybe we overnights these more full-year Those at all on look increases is lumpy. our tell to that looks pretty points. where The are us cases looks that. thing that you, and the in life will going probably combination scrape terms were dailies, renewals basis one basis. get know, the I I seeing of some organic stronger that adjusted on, But than you a April premium something

from one we're other in and in two smaller not or that data, seeing ones. some geographies, there that lines tone a further our polling, all anecdotal strengthening maybe than is is There all

who in that to we'll X%, we're be to but close the Maybe So, still knows? range. X% that comfortable X%

And in could Scott. I just one sneak then more Great. I appreciate if for maybe that. Okay.

Just on non liability claims. the Gallagher asset comp

on significant quarters? on like digits Just liability comp previous lines. was level single core claims liability claims up digits that in running the was workers' I'm sounded quarter. both low core how is low during change were underlying it wondering That a the to that single underlying up lines, in

we things be, to a business is new at look there's One the on. activity. you kind of we've of couple connected happen mean it's liability if to going more selling, I been been

that But a So it's are to more. in individual be direction. accounts new tends little business bit the that tilting not saying necessarily

Got it. Thank you.

Thank you.

from with is Hughes your with question question. next Our Please Mark Truist. proceed

Yeah. Thank afternoon. you. Good

Hey, Mark.

Hey, Mark.

that? you any seeing what you're the help what really will have pretty that happen project system. think on to be the you Do In space, through there if would given your crisis. up, Pat, about some exposures. work kind early banking would started view will have tightening construction or Would of are banks around you've what been see flow there enthusiastic you

the we sure in not we're I'm I'm understanding around Mark, construction I risks is what If So, seeing question. the that the ensure? question my look data, in

Correct. banking Any of the because pressure early signs of situation?

unrobust. construction In be right pretty to continues now, fact, if anything

their the First off, smaller And doing well. are you get you've -- got, contractors you is backlog now flowing do that when is the to have a down lot strong. contractors, of infrastructure more stuff and to infrastructure through, very our

-- you about they willingness with system, And inflation the pay in the claims observation carrier's up carriers? your with in there? tightening that is that are the Any seeing are perhaps relationships to

No, I proud will market. industry say the this. I'm of

based is And fashion, I a One stays are of they claims paying and I'd I they're them say the our that they're in on in the have paying filed consistent broad I a this carriers think basis them them. legitimate that paying fairly. think a timely that with and think things

I claim. on get can of don't benefits industry efficient paying insurance jurisdictions. behalf to claim going by when But system, put claims, very and legitimate that the there's there. mind is the and was you on you a model into of litigation the Now of Florida certain mentioning a large, battle a and assignment it.

lot are there We our a sitting not of complaints with from claimants.

you. good. Very Thank

Mark. Thanks

you. Thank

next America. of your Our Josh Shanker from question. is Bank proceed with Please with question

earlier. Thanks to follow-up just Yeah. in. ask to for fitting question one me want I Greg's

it. and You gave about I did hypothetical a path

guess them XX a property. were still in are cash? to a it raising say keeps flush only seems was there's environment with acquisitions? me. the of now to funding market XX but lot there the their Are the I only in today bidders Let's that XX. bidders I'm Maybe are they this on hypothetical, around? debt still lot wondering who What's make there

understand and it, I don't a, Well, I'm enough smart not too.

let's So that. And raising b, like funds with crazy. start they're yes,

competitors got additional Announced longer and they Go to they're funding they've name sell out that our pursuing their Not acquisitions, and eliminated going that. their game. to won't publicly team who actively actually would of team. were be no acquisition that One figure me. integration I the back in

you other days. funding XX consistent in last then been significant yes, that more long And, go the So they have players received they're to term.

So work. put to get it They got they to didn't are That it interest. flush. capital's

So there's competition out there.

felt terms attractive are of of patching come going who not choice they acquirer a I I've be to it's are the on. want always sellers consider certain that there's in price bidders People might in an to And big not partners there others. paying, certain willing a that Is acquirer? less really compared evidence mean, to some and with Gallagher

Well, I think so.

or believe a mean, a of the always are twofold. I we think franchise stay I if offers tend trade our the their that's differentiator it, this opportunity great business to expand they So, that the about mind love in big part best is them from. platform the is fact that they And One, business. to the we we have to that sales, in talking here our

there for discount. it. there don't starts then, them competitive. should got course, are, we're And various are that that the you fact that a not aspect. you've know, So deep and all. the And we're we that give to trying win But of cultural sell We're not them reasons, sell people

it. you answers. Thank Appreciate for the

Sure, Josh.

you. Thank

Shields with Meyer from Please KBW. is question. question with your proceed next Our

if of sort Two questions big I Thanks. can. picture

growing talked growth Is something than lot there you specialty. a why about that Pat, and there's within us you wholesale and talk business. faster rate? through is Open brokerage could binding First, MGA in gap

Joel. that Go Joel. toss I'll ahead, to Sure.

Sure.

work larger larger accounts to you end wholesale the larger play. up space and the accounts on and with tougher obviously, So, a are little exposures with in that wholesale larger side, typically accounts

that into what or of robust. market quickly today would thing lines E&S coming is, inflow especially several more because the terminology second admitted are the the and the really market first. They're really And be very the property market. in your coming of difficulty is So of accounts on in is that out tougher then the the coming depending

business, you nature smaller would more a consistent binding MGA nicely, higher accounts. growing in the see So consistent, that in our more line organic versus but is which of it's

much. move doesn't it So the as needle

this Look way. it at

in to Another business, are way going up price. in need we're help on because open market is us brokers coming doing troubled to that are to they frankly. When one put broker, accounts tough Meyers, place our

consistently for specialty Our writing MGAs that are coverage and accounts not or are programs that smaller are expertise. looking specialty distressed,

Okay. That's very I That's needed. what No. Thank helpful. definitely you.

of you're now of question, that just there the with we insurance deal about happens, is and the you can explain because or once wondering enduring growth special it's a on maybe think upside? stable sort company the benefits that purview, Second you and how a should over doubters worldwide sort reinsurance basis? of a so. then first Or of year Is under next that more boost that I'm temporary to

A And in thing. When very they No, part was enduring this they Willis, I fact an very were part think good of good firm similar that's underneath block competitor, our say had of. of a I team would business them. economic.

much a at level a our changing higher We're with people shouldn't So I at believe never know. we're way accelerate higher have not different that's could with retailers We would have And I offer offer it fuel environment. than do trading. reinsurance different and I we're to, a that. used say beyond do not we of the which think bringing should But level together or they we'll but think frequency interaction they achieved, what much greater growth. much greater will it will a were their what I

Perfect. Okay. Thanks so much.

Thanks, Meyer.

you. Thank

is with Rob Please question proceed Sachs. Goldman your Our question. with Cox next from

Hey, thanks. I on pricing. just had one question

a that you all and also potentially are think is in the quite commented Australia, I UK strong. seeming had Zealand previously rate New seeing reacceleration

business. seeing So U.S. to I'm the just pricing more curious a of trajectory the international if and or expect between, see the in you're divergence

those, out seeing, but close now. I D&O the think take we're to right seeing we're pretty same. of of they're it Yes some

in are starting to We workers' comp some now. see uptick

Zealand, a New I on mean, I difference what's between lot So, the U.S. on Australia, of Canada, and what's the going see UK. don't going in and

close. So it's pretty

you. Thank it. Got

Sure.

you. Thank

is question proceed Wells with Fargo. with Greenspan Our from Please next Elyse question. your

Thanks. Hi.

moving level for are side Just color a with three on assuming the margin XX line and all investment basis the quarters? remaining over points, the within that to thanks income on pieces. follow-up But XX is fiduciary you that in the the the QX

That's close. pretty That's right. Yeah. Yeah.

forecasts just of question assuming earlier What GDP of for you're to in asked like know, know balance seems there perhaps out you over stable just then, economy. We GDP you negative. or kind see I just decelerating a Right? a guys the terms the for it assuming had are go some I And of GDP year?

different into the got one versus first here's and is nominal thing, separate it to a But thing. GDP exercise Translating directly real Well, you foremost.

assured So I the look can there. what's in get being insured values only growth the what's at insured, and a

and right X%. than not we're data construction construction now, XX.X%, earlier, down contractors right up building industry building looking talked heavy list trade our through special other in Remember, construction that construction seeing up we our X%, construction I'm now. about

turn So I down if seeing two here, insurance things Negative them. have audits. through They so just believe terribly seeing at we're they that's The But the cancellations carefully. me, cash not And not this we're because do Audits they in want those in point. customer’s not flow We're of to before. they're wouldn't to business customers, at are a program dailies before. are believe this look is than seeing our it our our a in their industry modify our overnight. one lag are than it. factor list there, seeing you endorsements look lower lower

So, know how years right in two they last our But we are. the dailies now, accurate years. right are will pretty over two

still we or we the what's do guess, like, have impact, and PNC next when economy GDP we it if few to think being greater were I even, about pricing the if going think quarters? about the you thinking so And about

Both.

months the far know the contract. going going exposure We're volumes in at think any to I seeing and or don't just pricing will are six what's to least. I what modest offset But contract next contraction not in it.

of we are really and few very There inflation, out are from get a beneficiary there that the remember, do. benefit industries we But Elyse, inflation.

insure very make for sure hitting in as interested right now values and you're go you're in This hard. building value. decade, and to very, inflation is costs the what for carriers time the So first ensuring building are up the very

Thanks all color. the for

Elyse. Thanks,

Elyse. Thanks,

Thank you.

Our David your question. Please with Evercore. proceed with next from question Montemaden is

my Hi. follow-up. Thanks taking for

last few adjusted compensation in the in the noticed ratio commentary I've brokerage. just So quarters

excellence. just you Could some from impacts has headcount the this controls. But to margin think when roll I'm centres about you savings we forward. I had back Just that office think assuming related of with mentioned touch tailwind maybe leveraging the a as do to don't of on that?

not So, leveraging like, that only but, How maybe me of through opportunity big is centres the I that, just year, this broader for an think maybe guess help excellence. picture. of

just is it tops off basis inflation pay of Well, things that is gas, of our our there. rates about Do people moderately that inflation? remember maybe it that. we our headline premium a the it that because back neutral structure we some transportation, said up And etcetera is whole have and of moves knocking look. sensitivity what of -- to on commission might bit maybe of you XX% about about Then in our discussion cost certain take we've close a XX% by then to of XX% some business we because impacted tandem got on We inflation. incentive more with run more little with compensation

let's that's the of So let's $X that, when up, what number. – cost. say, inflation it XX% us you cost if like – of be something look you could somebody all XX% when subject If you facing is at -- headline to of add an billion pushing call your say worth XX% of your that structure

think about Just that.

might X% factor that have $X the there's off say head it. in inflation Let's of top billion, doing I'm or this just my X%

$X is that we it. that's is process from a because million That's $X is What the get number. out absolutely offshore to that and I'm technology bucks as only domestic saying of affecting centres both a really of saying excellence, other us that's thing offshore controlling more there. against but million centres not just excellence. quarter Right? big And are our productive, inflation That improvements and of on

that's centres off excellence. but point. happening uplift our just kind head, every productivity my So our did and of there the offshore quality And is work, I that you of work top substantial get our of of the because day

we centres cost heck lot a a the excellence. see into have bottom didn't dropping of of You'd if line or expense more our offshore

makes Thank for you That Nope. it. that. Got sense.

comes of We're out quality Sure. proud that too. of operation pretty the that

and us today. you that much thank very for you everyone. Well, thank Appreciate joining

to As I'd you to start outstanding could efforts a posted year. like tell, with their the quarter. our pleased quarter. great we're We extremely for this all our colleagues thank

the nice business Have with to We believe again people are We our Gallagher. us. best Day we thanks people I at at you evening, for with June. have look and being IR speaking forward and in a

This call. concludes conference today's

your at disconnect lines may You time. this