Arthur J. Gallagher & Co. (AJG) 25 Jan 242023 Q4 Earnings call transcript

Good afternoon, and welcome to Arthur J. Gallagher & Co.'s Fourth Quarter 2023 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. The company does not assume any obligation to update information or forward-looking statements provided on this call.

subject to and differ are cause that statements results actual materially. forward-looking to uncertainties risks could These Please refer recent to such Risk X-K Factors the for risks information concerning contained filings the forward-looking and in uncertainties. company's details most more XX-K, and sections XX-Q on statements and

the In reconciliations other Relations to refer the non-GAAP release and of website. measures call Investor on this company's please addition, well these as of measures, in for materials section the as other the discussed information regarding earnings

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

Thank you joining 'XX for fourth very you quarter and much, earnings call. everyone. Thank for our afternoon, us good

well had On operating fantastic during of in the IR with call strong me a year. is right line with wrap we as the what divisions. All as our today up We Doug quarter CFO, fourth day. said to heads were another December measures our our Howell,

For for our controlling in but X.X% Management like timing. posted combined life and that's more case organic we Risk headline large X.X% revenue, Brokerage XXX growth, accounting and the XX% growth segments,

We acquisition completed mergers annualized X.X% that will were quarter. minutes. $XXX counterintuitive payable merger terrific the XX earn-out $X.XX estimated also elaborate per accounting few revenue. Doug million earnings We of share earnings margin a of a totaling GAAP on of had net and and impacted in by

billion. basis we at by fourth were full margin amazing. out we 'XX. When an look EBITDAC terrific points our on think up to posted Adjusted That's of in share and team. XX a the revenue. year, XX% $X.XX, XX.X%, growth $X.X increase I for quarter an better So year-over-year, to per incredibly good comparable That's over up What of it XX% about close year more the are quarter a basis. up earnings an

was the revenue million, and noise interest XX%. year-over-year, but X.X%, and basis timing XX% starting of like EBITDAC posted segment. I on and expansion Organic Moving adjusted more you Brokerage $XXX points. margin see accounting basis, growth was if to a the segment was it growing include Reported EBITDAC XX% with XX results headline without we Adjusted income. X.X%

Let insights segment set to including the behind me some give and interest you just Brokerage does organic our following level income. not

Our This includes X% organic global Zealand. organic in X%. the in U.K., New and retail in XX% U.S., brokerage operations P/C in X% of posted the Canada, X% Australia about

large for brokerage business organic of timing Our those cases. and the X%, employee consulting life posted controlling benefit X% of or

organic specialty Shifting and to includes XX%. businesses, at wholesale XX% wholesale Re specialty XX%, at and overall reinsurance, Gallagher U.K. of at XX%. This U.S.

So very the similar all throughout of are seeing what we year. to these were

market. which we let up the in X.X%. starting insurance XX% to premiums, on insurance both change the Next, the environment, have primary X% pricing 'XX fourth some rate renewal throughout That's with line exposure been renewal and include quarter me P/C provide premium thoughts reporting and Global 'XX. changes, were with

lines. broad-based, to geographies product continue up be our across of and increases major premium all most Renewal

X%, XX%, up is XX%. is up cat about are and even is in property slow quarter. General each liability example, package workers' For up a property umbrella X%, up comp

reinsurance reflected more were X/X market. a balanced dynamic. the to renewals Shifting orderly supply-demand

property for bonds. cat demand strong reinsurers met from Continued reinsurance and cat existing was with sufficient cover capacity

last terms, reinsurers giving not changes Importantly, the discipline to exercise and year. achieved back continue structural on pricing

lines casualty there most flattish. casualty, adequate was mostly Specialty pricing supply, treaties In pressure. while experienced renewed

limitations continued coverage on war-related However, products.

needing rate. continued And pushing carriers of is behave lines. to need think development journey concern, rate it big could a the in we our rate insurance rationally, for needed Property The about be underwriting year a casualty profit. hearing where and reinsurance multiyear rate for a prior generate an view, turns it's increases. we're more to more, So in and acceptable into still

that All while find coverage price to is the our increases. clients brokers remember, our best as mitigating help job said, always

these all renewal not our ultimately premium So increases organic. show up in

Moving to strong. to business Overall, activity. be it our continues customers'

quarter, endorsements indication levels. policy and showed fourth of midyear last year's daily ahead our the audits positive During

The HR So nonfarm we are strength and 'XX. in also continued same benefits rate, terrific opportunities with will labor unemployment and why low the not I retirement is U.S. is in growth seeing believe a slowdown. market in have business evident payrolls which our consulting

a year, to clients was As new we we and very believe we existing positioned. sit today, business win I well will customers. here are while great continue XXXX new our retaining

niche incredible expertise. have We

from and another to our reaffirm analytics service outstanding data the organic ourselves is X% lead We still anywhere this size that notch, year. further around client that the can would account of All me distance continues will competition. Brokerage we any in 'XX to to top see the leads to range X% Our and globe. any handle

like And a about brokerage to Gallagher I'd family mergers closed and revenue. growing we to thank of our quarter, here brokerage $XXX partners joining in $XX mergers had very representing for Shifting of January and annualized million professionals. welcome a We've excellent acquisitions. to strong new us estimated X We off warm new mergers, an completing all to million already start of are of extend XX revenue. for fourth our annualized about to 'XX.

$XXX very close, not XX sheets know clearly, around We a strong representing prepared signed believe these fair annualized share, of we being our but get around all of we'll revenue. will We also pipeline. million term or have ultimately

full of segment, this all December EBITDAC quarter was Gallagher XX% on fourth line to expectations. terrific growth and Management Risk at organic in with at XX%, our year right Bassett. XX.X%, at full quarter Moving Adjusted year Fourth margins XX.X%.

annualized X capabilities about with in completed adding in disability million, also new revenue $XX merger of We expected Australia the space.

full XX% excellence full year another teamwork culture and the And drive of way. to forward, organic. margins be some the and of 'XX-year ethics 'XX our an continue would culture Looking close regarding Gallagher to of bedrock our culture. a It's for helped Management conclude and segments with year. was see results Risk to XX%, year growth client we organic in in unrelenting XX% that Brokerage and which outstanding encapsulated range service, in I'll combined that X% XX% revenue, is of It comments

XX in EBITDAC. nearly in our Gallagher is every live annualized It's fuel huge million with culture growth Most growth. and a way. people and advantage $XXX XX% adjusted continue embrace have That we a the will importantly, in, and mergers and estimated revenue success our to believe that day. competitive

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

some hello, segment. commenting everyone. outlook. Today, full and on CFO document year commentary provide payable quarter comments release and conclude provide through typical give short capital earnings remarks a accounting. fourth our on our to our and vignettes, IR then comments on M&A quick also that X with website refresher 'XX Pat, modeling then on on I'll Thanks, comments shift investment some organic one on our a then full management. walk as I'll We'll where year helpers margins my by posted I'll you another earn-out the and income we and I'll few and cash, prepared on

Okay.

X.X%. focus flip in X.X% IR also Brokerage if what Page expectation fourth X% want were no and on. that December But income. we quarter release. matter to X.X% we XX% of Pat as with right quarter, closer you line Headline Let's the earnings to organic Day noted, X our is to to percentage organic of of interest darn to That's include of see good a

of couple and A to page. call puts on out other takes that

you time. in that performance come December second, life in And did than at and organic levelize than should thinking impact contingents commission those better more favorable over First, the for bit we those that a of fee of cases. thought That's Controlling carrier for little where takes our due X.X%. to X%. XXX base

our from expectations. segment We that X% our late unchanged is see organic to to Brokerage still year mid-December October organic outlook range. X% growth ahead Looking 'XX, full in and

right. All

the XX.X% that year's of and table. FX flip adjusted quarter to up Let's get recomputing Brokerage EBITDAC quarter XX requires fourth last fourth But to points. done fourth the segment is using Adjusted remember, to We've that EBITDAC earnings to table for in was this rates. release X margin 'XX. quarter basis current Page

margin December end posting margin quarter XX.X% that points at gives So and the a our expectation. of expansion, basis Day XX right high of IR this you that's

control of expansion. points you we in some closed role in Buck terrific have a XXX other simply quarter been the mergers the and by if basis that have That's late the for seasonality, Then work that would team.

around seeing mostly And XX double to basis roll Looking X% against full of ahead to year points that in that, was, basis year, of M&A, about say, some XX margin we includes Buck. next the note, it due expansion. of at anticipate maybe if starting pressure expansion organic And points organic.

'XX. XX headwind is the On points first a about quarterly in basis to quarter the XX basis,

reflect to in forget don't please So nuance models. your this

Okay.

tables and Risk the Moving organic X. and to and X the Management EBITDAC Pages segment on

excellent Bassett, quarter growth XX.X% organic Gallagher Another for XX%. margins and at

new wins benefit business and to retention. We continue excellent from

Looking from growth 'XX new forward, and December even X% around margins XX%. 'XX, wins full associated in as we with XX% -- our some year That's that's lap from organic to early range see we business that again, large unchanged views.

in slightly adjusted to corporate quarter of came Page to turn a expenses. earnings our on X and little than let's December table. end Day of of borrowing the our Total numbers IR corporate shortcut better due favorable So fourth credit the line less segment segment expectations the and release lower

we to provide CFO to modeling document the shift So where many now helpers. commentary that's Page X, let's

Most also are added close of Day very actual now numbers XXXX We've the our to IR fourth quarter information. estimates. December

as look look that. at take So a In a take at -- FX. we particular,

segment. EPS a Brokerage expecting headwind in within half are to small the We the first

of during X the we CFO we now quarterly no year IR Day, change to for are Now our There's weeks the X provided moving segment year commentary to that full providing estimates. estimate full but to 'XX. outlook Page ago there our document corporate

some this shows to your carryforwards. get added you credit take Page refine with time please tax X, information. So our models us When to page

at see IR December Day. we our You'll discussed what

credits in million we about to December fund federal tax That's are credits the fourth the that election able $XXX tax when flow following U.S. in future a of helps available. here quarter. 'XX our return cash reestablish method filed sweetener of Accordingly, of tax change nice our a tax us we We portion future XX, M&A. have as

questions third-party we've table that equity book revenues, The turn income. about income addition such of we top let's new and of would giving as punchline thought Page items in our a this line. to to this includes We in So is the investment gains in premium as line investments put X. brokers lot be helpful been that finance the interest

We So We've change, numbers No breaks clarify we've also this you find renamed hope by that descriptor. statements quarter. line other broadened financial will just in that it items. for table to our you this contains down helpful. it the

for revenue million. rollover down page, see that Page our expectation. with Day just So consistent on Brokerage quarter IR shifting was X, fourth $XXX on you'll total That's

Looking segment don't forward, closed estimated text revenues the and in be the borrowings. also, Management the estimating Risk Based Brokerage for a for to Risk rollover also around we're in yesterday, $XXX Brokerage table. M&A in forget, through of we've portion interest revenues that segment for those And below we mergers you'll included on future recognized future that and a and mergers need million fund for add via through expense closed yesterday Management 'XX. table to pad of as acquisitions make

out backwards. performance performance what So in December, of good And are estimated Pat now less we the XXXX. line during it are what expectations our creates of as the Willis earn-out That's Remember, of pay increase accounting. if foreshadowed of more GAAP for sight payable favorable, while meant income. earn-out topic we I'm bit when is did If for accounting it might have favorable, the we first expectations a because quarter on he quarter payables Re counterintuitive said expense. the GAAP of in M&A, creates of we

estimate changes, well. does what's highlight That extremely on GAAP but all more it because punchline important, some The this these the reinsurance business said, is earnings we performing were do create and adjust noise. our

cash incremental year we about another M&A funding. and $XXX 'XX, in using of $X.X Available on estimate December cash, strong capacity about and XX generation expected at moving was in M&A cash here flow million. management 'XX And So billion hand to of borrowings. fund to with only cash capital free

my So are those comments.

$XXX up segments for I on year good X million. 'XX, adjusted and up growth Management reflect Revenue of combined how XX%, XX% sum Brokerage of our EBITDAC Risk nearly As metrics and growth billion was. really $X.X or our

So year, to tremendous we in the to it and here again terrific momentum team delivered do you, 'XX. another have Pat. Back all

questions Thank you, I Doug. can please. we operator, go And think to now,

coming Fargo. from with is Our question Elyse first Wells [Operator Instructions] Greenspan

to X% for exposure organic you're year? the the assuming and Brokerage of of pricing you the throughout X% question, sense first give us can guide guys course economic My within for what XXXX, a

when today of pretty year. of we've really don't think in that next Where lot year Well, assumptions are what it's budget our so throughout year? to here in pricing? a to I that range we What much we we is next are is. X%, Where process, the see X% running did the this been today we're seeing We exposure units? in change

you shaking and in to might wholesale to like be expected up with reinsurance, through and And X%, maybe really see How you've assuming be then growth different out seeing mean, X% of you come businesses within when benefits be below? guys strong go continue that I do above businesses 'XX? in all you been and to your some are that of the others specialty. range? the will Are those the

All right.

every number in opportunities, They flat it on given So seeing that the exposure point, on based target producers. new not they're marketplace hiring, a rate hiring business view what has

every reinsurance differently. range, business large, might So that that the of up, get say does that. Benefits little lower range? of how range end X% on What a being and the on by each the to range. on be business pet and that's bit unit different? upper it might of But who's of rolls and and in the end on lower see X% end upper end the Who's we you specialty to the and maybe is range the I the would

reserve you pressure and how the comments across to on seeing pricing you're Pat, Can casualty multiyear expect assuming interesting right, you mentioned emerge start tell cycle the you industry? this your us journey just starting hear you some thoughts more and to We're then, we about do said then like could just see side. what And transpire holes here.

Nobody you logical X, makes least. years for property it because sense, in X X. X, Well, think I touched at this a the just back, side. some saw look When take we was inflation values

casualty but those spike got settlements you at And all that And been it's fact, a then the on yes, you very side, so sudden you've set into take a come in tamped nuclear. a you reserves And reserves of back still a look that and are, in these down, it's bunch of same inflation. at years those at look there.

to a how meetings that Now sense have the for that are say, up? speak is And they we're having industry look, and well whole. discussions exactly we're I But well, of start having you necessarily number to concerns a all there the they are. they not with can't in various right, with where some going as those reserves hold that my are carriers comfortable the

you'd you to there that And in is, right, it look okay, if them take inflation see and have to numbers those it. were on in so you if something at if were where view order a do increases to our price get had

with X something have that you that you year. need in in casualty kind to that's of think that, don't get the structure I payout

you're take years up possibly reality. to that think I fact, with catch a affirming to see few in So does, going

the then the reserved you And one Have earn-out guys associated maximum on Willis Re with one. last deal? the to

I mean have we year. accrete for yes. to X Effectively that still more

there's next the So it I that as will year. think $XX statements might -- through accretion financial million go be of

Truist with coming next from is Hughes Securities. Mark Our question

wholesale? Pat, versus open did you business brokerage give the the organic program for within

brokerage nice business. think mean to probably the program going had what's open I in Well, the has triple where on double we've I it's run-up. real been

brokerage open XX%, So programs. on probably to the you're if you X% look around running at XX% at looking

property do it think your you case? would the deceleration of two, you material take any of there? market? little And Do one, organic? think on And kind on that's Well, bit impact the have then what's your

No.

take on for change I I still we is went saying, think So incredibly And was -- on the going you There can carriers no rate. of is impact this do, years. -- X% then course, organic. valuations. any no, well, to in not are don't news carriers the on of I push That But blah, pricing the wayside blah. price inflation, seeing property backwards." "Oh, I blah, by mean, see good have kind have I'm an a fine, at focused point

Now predicted. the for their substantially get didn't claims be are costs they premium higher it, in, are coming they may replacement than

I for you strengthening. continued do time And so a is bit think a correction, need be do of to going have some there's little there valuation left I where rate think and

Mike of the with comes question from BMO next Capital Our Markets. line Zaremski

So first question on M&A.

You and those there's and a what's I example, of landscape few meaning we of guess, of believe, would machines the was them guys I of of you've terms take was those, for competitors -- available. that X in into deals -- companies just I if a -- your years talk brokers. most I'm those acquiring tougher, changed when that would firms. are extremely have historically, Buck just kind been bank-owned little them a has curious But bit did the successful And, integrating one growth turn of to about they openly too. and a different, couple announced being

just and of expect we should versus is changing the different curious bit, the X, kind deals XX of historical a going if years? types So forward probably pool so

tell Well, let's of all, remember. you, first I'd

fact that But course, think of earnings, we're got they've more brain the bank-owned the power, brand. now adds And virtuous we and in call. getting addition a Gallagher, we that brains. in things. of the when getting we're we're get. but lot acquisitions, niches we're I sizable terrific happen about knowing And not just it power we're getting, getting like not more want, listening the deals the that which, con-call, to And accepting the do people. to to and brain circle We're revenue talk we that spreading the of the in two getting to to about also areas from the volume we be terrific we're are expertise getting

seeing think of our There's the I in. They've to that is right we're say. it, And fire. our it. engine. lot this phrase It they way kind They it's question and about got no organic is acquisition a get guess come what aboard, -- our is I targets to on come

been than data more geography. own Now the if you take are our people the their have accounts not bank not deals bigger. large roll-in often acquisitions, to down, are in these really But and that tackle able

on they those minute out Gallagher. sign us, part to the telling In we're of they're clients

Here's what we've got.

expertise Let tell the you about me we've got.

me Let that we the and data things show some in you of do analytics.

You've all they're should they've like limits people whether with you tools arm or about bank What not What heard in us you we a bank, had before. never of they buy? talk have? just So a drive. kind -- do them that

the level So resonate. time excitement take a does not long to

that hear The And another the go They back immediately, folks calls moving you foot front way are hey, that of in are the day pretty part of and not literally we're on foot. out any closing. firm." did their at these are on

Yes.

on one Let thing add that. me

organic cadence areas. geographies and think in was that and seeing Eastern I the what similar in similar similar running we're our very to

think was it I to a them. So while that take restart your premise

they're think started. already I

get in terrific going our organic after already numbers it. I think they're showing year. is it We for a growth. Buck don't

growth get it, our for So numbers. credit get we organic credit the out the in year, but we and we get And the somebody something that. but goes for never revenues sells organic within don't

they say bought I So ones a that needed was, if premise that restart. that the the -- wouldn't they were we

got to and It Gallagher is in know you marketplace. It's their fact, many new tell good is what announced hard you slowdown, Can about takes your and Gallagher. in I the called a here. it. to your relationship talk the after a effect. go you market, Gallagher No, of I've It's to pipeline no. about The but I our something part about you process prospects you I'll referring happens -- list, of team market, have no, to we're it's And we really energizes talk the not times. their just not back on in -- a pricing? soft explain effect Mike, I've about, what tell

is some bring This let me and -- data analytics.

Let you me going on what's our in niches. show

specific going involved, get I to your turns it that in pretty to experts It's have you're a actually. meet. think area I get chance me exciting, We When to want out.

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brought your really up you you your think up didn't I guide. 'XX -- didn't But bring

just guess, should XQ seasonally we a more bit I into the the year of or be thinking historically? in does am reading we -- gets a the So I much there's obviously, -- But know quarters. we little Or of bump things? seasonality too than should half it first

you're the on that year. it, a quarter, the of think call in this $XX here million missing that out million in total $XX next I billion let's $XX business pushed a gets of magnitude

to X% there, guide so in be that there. XX Okay, to basis but change enough or points wouldn't X% it's that XX in

Okay, And just lastly.

You're one leaders. of the

a the You've years? sorry, talked last kind kind for -- of changes maybe successfully terms so guys goal about moving of of of your or of in terms excellence. been in employees in in the doubling, folks of over what of there while next you it X or year the center of the in Any doing terms there kind percentage trajectory of

we'll X have people as to I years, need now. many as said that the there next we there over think we twice what X is

X because done decades do. in a the that's position that unleash already now being done. standardized we've so what's exciting really about opportunity there put to on we for that think all us have has now the We processes of I of work AI many in that the almost

investment. deploy against that AI can is now made And it. we what do have We

as And using over with going they're many to twice you're to jobs they're hire going because those going folks, folks, end better AI. there if up to be

going So to well there deploying technology our are into by that be it. colleagues rewarded

we really up about fired are So it.

Yes.

hit would to to double the employee Why couple count we're of because double And we to business. a me other going plenty lead of our that's to opportunity Let need there items. going there.

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did plan you effort know you due come you and that we don't years them. that team system to in need virtue you XX it We agency diligence, you of can to prove your data it and for the sell. change into to ago. We on by provide you out don't need We to aboard, our go and rewarded When analytics join our that. sell to get us, the

next David is Evercore from Our Motemaden with ISI. coming question

sort I favorable that margin help? of have guys of expenses just in first timing little helped big 'XX, there quarter it through? on And Was that you that on just during was on just the like -- that a a coming had baked incentive looks into something Brokerage. quarter that compensation -- bit timing the is the question a of

in that accruals. year back ahead think, the little I further June a at April that, were point of or about our call talked we and all, we incentive that probably our comp of first Well,

that's guidance So in margin expansion back since contemplated our then. of been way

say December delivered there's we quarter. news that what no new I So versus we what -- expecting would in this of were

mean, it? a It's so the what's impact a and big number. not not -- point. So it's I of

Understood. X%. of And you X% are to and in the to outcomes the it. considering the are level you just thinking that then set guys of I X% to that growth Brokerage sort guys on wanted side, what of range within organic to exposure for back terms come Got XXXX X%

All right.

some our you we X% break versus down organic, at So more I lost probably, you when When exposure year usually of on new rate points there, more have X is think new lift X to X we're that. in get versus growth. net there's lost going that's that I X% -- it's from we're points and points have probably X unit maybe it, don't to next or -- proportionately. probably that's

So X/X. X/X, if break might down X/X, it you X%, be

break down excuse unit again. it's X%, business mostly half me, then new you growth and probably -- rate If exposure

question next Our Gregory coming from with Peters is Raymond James.

I'm you table interest can to you is other will for CFO and think we their some what map guess premium sort to calculate ever perspective finance might that rates, maybe I some trying rates? some Fed to interest going the give could perspective? you provide there's that on happen with obviously what there. of to we're And on mid-December, added us the that new we income. the what's on changed there's out us the benchmarks which appreciate, with revenues which might income, mechanics does with help commentary, line depending what Because us happen since happen going So Fed when the

All right.

got amount of the we on. the that clients, the we're our that you've and only not ours, the and okay? So on have first that's our then what -- balance foremost, it's we're rate both you earning on it's So sheet, sensitivity cash earning but and rate got that

dynamic. got you've the of Second all,

the income mentioned of XX% Fed. of only is about The portion U.S. You the numbers. that interest

the specialty large businesses more that the of in internationally, reinsurance kind So of U.K. weighted we large to you some with balances that and expect it's in actually would have heavily

to So separate you your got thinking on that.

it was services agreement. they receivables it grew our the during The that -- only this because year. other growth going the of because reinsurance thing, of rate was way is got the from migrated It because transition Willis' also books onto too, was you've as that the up, not books but

dynamic that in got you So it.

for I sensitive how you're to think is is that rate to plumb changes. trying number what

would million $X year. the say Fed in I that it's price-sensitive per cut the U.S. that per rate does

your banks, answering might X about if How million the $XX in, central question there's million. other points $XX there's cuts So -- they do just that that's what be Fed. policy have X the about with per year, when you my of right next off just the asked $X number about I it don't Fed, But cut. million think the as that top their head. Again,

Excellent.

Just the for assume quarter WTW shift? with services X. a follow-up agreement would that And have July what that 'XX. table on I meant -- Because change did

-- quarter So forward looking conditions, so when that's quarter, third operating that's fourth the more going normalized correct? we're at under and

That's correct.

for that you Clarification. Thank

for Yes, it's important okay. -- yes,

sure there. premium the that's you've down premium You got got make finance finance you associated just that with expenses to -- know there's

that's a get -- spread we and down the get the up. then costs up So get operating expenses the gross you above, below and have in the -- interest is business. operational. we But We revenues

to clean million going still or there forward? be going more changes and $XXX the I don't on related is getting I But that? and a nuances the tax before energy? that credits energy carryforward can't things million question is have -- there's the balance, appreciate your expectation I'm And me there's get by I up it in detail. And I clean excellent the tax, which know on into a forward $XXX that then bigger hung I to caught credits That's clean -- this And is just I commentary detailed picture credit there. going approach tax surprise the without your then -- here. towards energy up. pulling you're of from that. down other tax going obviously Or revised that

All right.

two So things.

a to of be Page we we of when there'd somewhere that have 'XX. maybe reaffirmed that around is think about X, $XXX 'XX that in of utilization $XXX on see in worth 'XX, And balance million year. 'XX, get million you utilization can You

think be I in other there work. about energy credits say a years. to over credits it construct our small do very There coming when clean from and all for to these need next to balance you X the building. So is purposes, there, a in it of intents rounding is consider office with that has But would home we and our

Great.

others, than it It especially might on our the from clearly, be and on renewal last in because pricing be back the year pivoting year or reinsurance this side, component on question like this I'm you challenging year. And picture lift was less And say. going So periods rate is going commentary focus one the to going cat should of to to most the I it based more a is, to last reinsurance the normal bigger seems like was lot year. seems your it's get lifetimes.

I So to casualty I and has and response observation get it how hung But your was that on, just don't realize work want up I you own might Gallagher? too with curious about think its cadence. to

ago. for that back, team. look say supply this year of up; a and Well, first our got expertise little of tough organization, we our it and now really let a difficult took a proud one, all is group clients. very the I around think -- demand demand tell can't that price is of I when number new in And you year. basically, the the paid, we up. came from got lot just am number some I the that, And but then to clients me we Yes, sure that's is a of to And We how all, of got a environment, was we've what was learned balance year, care into easier, a I you've come us two, but that.

and okay, got sloppy to XX% of And remember, as a as and people a looking our pricing no, get saw of about more like X/X. bunch of it it's you've not So ago, I'd that. at we was X/X. book is saying, down year not that business coming

to year year. it's been pretty And the a So it in is great the bank. property much cat when comes

up. place to but I and than demand last pricing Easier up as said, year,

one good us. there very which still what and do people, many good. remains pretty us quick can for are that off Greg, that we very a And in So our competitors falls aren't our market it larger very, for But it do after clients.

And question of TD comes the line our from Cowen. Kligerman with next Andrew

define just meant gets $X what how cut, I Doug, by rate were want you cut, cut? you just saying to rate million much rate clarify, when per

XX basis points.

many? How

cut They of a points. at XX. I referring do to XX XX. basis rate was

tailwinds those respect you're playing And driver? -- with and also, Re big or understand XX going Is facultative of about cross-selling into kind a I be And in? reinsurance Management bps. to that do Gallagher Risk Perfect. could the that. with provide bit you've What a then doing maybe XXXX? talk to to how moving you is been

both we under the sides the playing incredibly nicely we benefit out and from we first when with all, and thought that mean, deal, over been one the around was over interaction again. roof, the of considerable to has ourselves I is Well, say that and did world. there over told pleased the of equation of the amount have and I reinsurance having that team surprised retail by with a and And team our team

and As in We in of the capability have in Not well then play. very you niche we in learn. public global our perspective sector or the know, that a had clients those we're to for the we're the nailed. pretty United strong the marketing, to thought player And that's meetings. reinsurance niche a States. And kind largest pooling lot very,

helped team amount for has people. of reinsurance revenue reinsurance add retailers revenue for us a the tremendous and and Our our cover value and pools our for added

question, So journey, to in Andrew? was we're What opportunity the of incredible in other started it's an the the X-year terms Sandbox. together been just and play getting

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and brand now But property, of you're to ourselves like want to is partners talking this. new. treaty grow. X et retailers customers opportunities today go and the hard our areas out example are than we -- our place a done facultative organizing it's say, clients cetera, not you. trying where here But think help it's an better ago in months and course, with position No, what world. our seeing oftentimes, I we We and to we we're in about, participate are in better want to our insurance to getting carrier having things trading get along retailers are of we're to And coming

seeing are opportunities. we an uptick So in

fees. wondering with? Management seems management? growing change just Shifting claims they large you And I'm terrific. -- you Risk it ones? they growth the where there. carriers over Are kind just are side, in what mean, organic I tailwinds Or of Lot and Like to the most ones? seeing of the are in on small the the are management claims

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single just GB So year. is, my every expectations opinion, in the team at outperformed

just a of seems runway lot just like there. the in there's I it No, carriers, mean,

oftentimes will put way, I that? believe let I pay sit that and will unusual, ask. be I Andrew. to I them than in They mention Why partners our Did numbers first not explain that shock. some this. by their just line no. again, Well, the go it numeric by insurance and Gallagher of substantially do of in geography, own company claims dollars claims? And I more really with won't insurance of this companies me carriers. would substantially names U.S., no, claims believe cover, When people do it in the believe more they they that Bassett not any pays and reaction is

believe, a you companies we about if company, that of work put of probably and selling And that's are outsource in work us, out we're an our structure it'd is, be outcomes what your and of coming account and claim key. I superior. terms and the you day through. if X management amount you're through top X around be And capital or will in it insurance Look, to claim world. the whether self-insuring carrier, think, a proving large risk in is really this day the whether your Think a focus, GB you insurance called

or find insurance you "I of I help and could an X could worth company be ROE, dramatic. points look CEO pretty it at I'm And if saying, think

were one the They quarter. squeak up just in the in revenues. one could I if Maybe on last contingent XX%

it maybe you underwriting, go being that as flattish given it X% you for we when your year all? Just see of provided scope great was flattish impact X% such into do of a becomes kind in that guidance, 'XX, the to

not we to it bucks, No, pleasantly that. say outperforming thought to I we that few same extra I'm And in it -- yes, would there. see X% get I range. it a we supplied and said going million were would by going be to X% were

what that potential you through as number look way, a the owner. it's see and By telling

is interesting, to isn't it? business That's the of book superior Our competition.

Yes.

Jefferies. the next with line your question And of from comes Yaron Kinar

But came with organic were a Brokerage the expecting. First forgive I and have line here. bit think a But guide. contingents in question nitpicky you December me I I know were bit it's better organic, in than

case accounting the already for and accounting. were the XXX life You timing

bit So something that about it may little it seems Or I came than like in been have there am there a incorrectly? lighter expectations? thinking

little meaningful $X order X%. We that it -- a we X had does bit, We year, there's percentage you're a $X are Maybe had X%, it's than when it's at X% on looking another sales not I quarter. doesn't a of had but had quarter. look last back we it in -- billion quarter, less XX% $X them. million million, the we few But a move mean, I a hoped

around bounces little a it So bit.

bucks fact do point or the bounce at a we're or around here, that within there. looking X.X what you So get few we here in brought for some million a it

And Okay. quick the commentary. ones on couple then a of CFO

earn-out So 'XX? Willis of Is I a payables in bit that true-up Re XXXX. in seeing a am just in slowdown the Brokerage

That's right.

risk in Are increase meaningful large seeing a any of expecting also Or then intangibles did already amortization you I'm there? you the And Okay. M&A management. and

here month acquisition Yes, X announced or a ago. months manager we so by or plan

So down business revenue disability million that's Australia. in $XX the worth that of in

so Thanks it. Got Okay. much.

Michael of line the Citi. from comes with question Ward next Our

Canada. Maybe just curious on

of I think saw it if like interpreting too. the we're maybe some one headwinds your I there. think sounds slowdown, commentary, peers mentioned And a you

talk Just about that you that think 'XX? could should in wondering if if dynamic persist you

points, bit. think had listen, points shifted growth. I Well, a has up -- little organic XX there XX they were The posting they of market some

they've X in or last mid-single think the upper So I digits been the X quarters. mid- to for

So a see going XXXX. of I much don't into shift

one, that Michael. on would, pile me you if Let

year right now on. think And High all, I makes Canada. digit they're organic they've number. a year and where been. the to Doug, They've given in perfect you're been killing about great X% out, in of and is upper That First X%. sense me,

had actually just a couple business opportunity fall didn't that We Yes. great new really our of way.

decided For with some to the stay reason, they incumbent.

X have points would a those items, or So handful I you for of to that think X if it. think normalize I they more had

first 'XX and then activity. XQ And acquisition activity for 'XX PIK you your the Okay. like XQ acquisition PIK revenue guys quarter outperformed commentary, in CFO your for for increase it the looked

Just Buck or momentum that? driving from wondering what's is that

right. I what looking question. understand again track saw. at, you're just didn't Help me to All your

Sorry about that.

increased to It the revenue PIK -- XX Buck sort from XX? that was XQ Well, was you just wondering of from and if just 'XX. the PIK XQ XX

-- quarters time buy we to going get Listen, X you're maybe every of something, remember, it disclosure. this

and which So million. but $XX ,XXXX X,XXX it away if -- million that have a off, $X to on it's also it runs it quarter Cadence there, 'XX, -- that the in that's even as falls second it Buck It you were quarter, right? goes can are see quarter -- coming would we Eastern nothing, fourth

just M&A that no in what So It's a over. that's the you're seeing run is there. Buck roll longer

from of mention be up just product bottom of year? you the the going towards hear I end to Did sort to the earlier. you maybe lines question following or growth kind this kind it's spectrum -- on across Awesome. And at Okay. was then the think going for benefits of of be

running some things they said be year. just in No, X% I more might like next X% versus

the that of said, range, I what just be more business. that's X% they to that lower So nature of X% towards on would their end

Okay. Got it.

on that Pause for on about. that up. a that inflation one many starting you answer bit heats are We might worry to a little have different that

our question is And from last Meyer Shields coming KBW. with

XXXX than I you also expectation. to that talked ball in think a a if contingents thinking But it development in right? little better contingent reserve problem December really small be Doug, Am expecting about bit organic. questions. the the like about two quarter organic not why fourth sounds I matches you're core

that. No, I didn't say

that really take be have year on there's a the I but and casualty substantially commission. that they as If happens contingents. that, it that see contingent I don't increases. that reserving, see you use think our rate I I like eroding the lines, that, base supplemental word commission think next something our crisis, our may would or again, don't we rational but do to impact I don't if like something orderly eroding

those all, I where of don't Okay. margin are XX% And missed Page -- may Should on components. increasing I plus out assume we revenue? break that commentary the the individual the this. just X know, Understood. then But have you detail

-- that on -- Brokerage the my the No, There's that very our point margin similar business. on was to would premium be funding.

have entities entertainment, it. inflation income don't inflation for that our margin that. -- there. of big and in And But there's yes, So that's there is because just do then of And on inflation there's that. a not remember, categories number. a substantial travel equity we interest out interest not instance, in have income, XXX%-owned like some interest on is that We many

So if come expect would I that on -- to then inflation if down, travel interest also. come down rates

that. it, margin, of there business XX So some but are the points offsets is funding like premium on something

And year. XX,XXX-plus across let for thank joining you thank Meyer. us another And Thanks, our this the me you globe, fantastic for afternoon. to colleagues again just say

dedication. achievements of Our work hard due and all are your to

our I about and market and niche industry share. quarter global more and in data having As an thrilled with as full think our 'XX I the fragmented limited expertise for and essential even excited economy year when fourth I get a analytics within leader am performance, operate future. market We

opportunities say, at immense. just future our growth today. seeing for us And look while to we're I We being Day. So for forward always our I Gallagher. believe It's are mid-March be IR started. with pretty cool Thanks you to getting

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

You lines at may time. your disconnect this