About Arthur J. Gallagher

Arthur J. Gallagher & Co. and its subsidiaries engage in providing insurance brokerage, reinsurance brokerage, consulting, and third-party property/casualty claims settlement and administration services to entities and individuals around the world. Segments The company operates through three segments: Brokerage, Risk Management and Corporate. The company’s Brokerage segment operations provide brokerage and consulting services to entities of all types, including commercial, nonprofit, public sector entities, insurance companies and insurance capital providers, and to a lesser extent, individuals, in the areas of insurance and reinsurance placements, risk of loss management, and management of employer sponsored benefit programs. The company’s Risk Management segment operations provide contract claim settlement, claim administration, loss control services and risk management consulting for commercial, nonprofit, captive and public sector entities, and various other organizations that choose to self-insure property/casualty coverages or choose to use a third-party claims management organization rather than the claim services provided by an underwriting enterprise. Brokerage segment The company’s Brokerage segment operates through a network of sales and service offices located throughout the U.S. and approximately 60 countries, most of which are in the Australia, Canada, New Zealand and the U.K. Most of these offices are fully staffed with sales and service personnel. The company offers client service capabilities in more than 130 countries around the world through the company’s direct operations, as well as through a network of correspondent brokers and consultants. Domestic Retail Insurance Brokerage Operations The company’s retail insurance brokerage operations accounted for 73% of the company’s Brokerage segment revenues in 2023. The company’s retail brokerage operations place nearly all lines of commercial property/casualty and health and welfare insurance coverage. Significant lines of insurance coverage and consultant capabilities are as follows: aviation, casualty, claims advocacy, commercial auto, compensation, cyber liability, dental, directors & officers liability, disability, earthquake, errors & omissions, exchange solutions, executive benefits, fiduciary services, fine arts, fire, general liability, health & welfare, healthcare analytics, human resources, institutional investment, loss control, marine, medical, products liability, professional liability, property, retirement, surety bond, voluntary benefits, wind, and workers’ compensation. The company’s retail brokerage operations are organized and operate within certain key niche/practice groups, which account for approximately 78% of the company’s retail brokerage revenues. These specialized teams target areas of business and/or industries in which the company has developed a depth of expertise and a large client base. Significant niche/practice groups the company serves are as follows: affinity, automotive, aviation, construction, energy, entertainment, environmental, equity advisors, financial institutions, food/agribusiness, global risks, healthcare, higher/k12 education, law firms, life sciences, manufacturing, marine, nonprofit, personal, private client, public sector, real estate/hospitality, religious, restaurant, retail and services, technology & communications, trade credit/political risk, and transportation. The company’s specialized focus on these niche/practice groups allows for highly-focused marketing efforts and facilitates the development of value-added products and services specific to those industries. The company’s detailed understanding and broad client contacts within these niche/practice groups provide the company with a competitive advantage. The company anticipates that its retail brokerage operations’ greatest revenue growth over the next several years will continue to come from: The company’s niche/practice groups and middle-market accounts; Cross-selling other brokerage products to existing clients; Mergers and acquisitions; and Developing and managing alternative market mechanisms, such as captives, rent-a-captives and deductible plans/self-insurance. International and Other Brokerage Related Operations The company operates as a retail commercial property and casualty broker throughout 39 locations in Australia, 44 locations in Canada and 33 locations in New Zealand. In the U.K., the company operates as a retail broker from approximately 88 locations. The company also has specialty, wholesale, underwriting and reinsurance intermediary operations in London for clients to access Lloyd’s of London and other international underwriting enterprises, and a program operation offering customized risk management products and services to the U.K. public entities. In Bermuda, the company acts principally as a wholesale broker for clients looking to access Bermuda-based underwriting enterprises and the company also provides management and administrative services for captive insurance entities. The company also has strategic brokerage alliances with a variety of independent brokers in countries where the company does not have a local office presence. Between the company’s direct operations and this global network of correspondent insurance brokers and consultants, the company is able to serve its clients’ coverage and service needs in approximately 130 countries around the world. Global Reinsurance Brokerage Operations The company’s reinsurance brokerage operations (which the company refers to as Gallagher Re) accounted for 12% of the company’s Brokerage segment revenues in 2023. Gallagher Re operates from offices across 31 countries, with specialist expertise, underpinned by a portfolio of analytics capabilities, including catastrophe modeling, dynamic financial analysis, rating agency analysis and capital modeling. The company’s reinsurance brokers assist underwriting enterprises, such as insurance companies and managing general underwriters, to secure protection or reinsurance from another insurance company for a specific risk or class of risks, including negotiating rates and terms and while sourcing the best-suited contracts available on the market. Additionally, through Gallagher Securities, Gallagher Re provides capital markets services, including acting as underwriter, with respect to insurance-linked securities, weather derivatives, capital raising and selected merger and acquisition advisory activities. The company anticipates growing Gallagher Re by increasing the number of underwriting enterprise clients, deepening the company’s relationships with current underwriting enterprise clients, developing new products, further building out the company’s facultative capabilities, and through mergers and acquisitions. Wholesale Insurance Brokerage Operations The company’s wholesale insurance brokerage operations accounted for 15% of its Brokerage segment revenues in 2023. The company’s wholesale brokers assist its retail brokers and other non-affiliated brokers in the placement of specialized and hard-to-place insurance. These brokers operate through approximately 147 offices primarily located across the U.S., Bermuda and through the company’s approved Lloyd’s of London brokerage operation. More than 84% of the company’s wholesale brokerage revenues comes from non-affiliated brokerage clients. In certain cases, the company acts as a brokerage wholesaler, and in other cases the company acts as a managing general agent or managing general underwriter, distributing specialized insurance coverages for underwriting enterprises. Managing general agents and managing general underwriters are agents authorized by an underwriting enterprise to manage all or a part of its business in a specific geographic territory. The company’s growth prospects for its wholesale brokerage operations depend on increasing the number of broker-clients, developing new managing general agency and underwriter programs, and through mergers and acquisitions. Captive Underwriting Enterprises The company has ownership interests in several underwriting enterprises based in the U.S., Bermuda, Gibraltar, Guernsey and Isle of Man that primarily operate segregated account ‘rent-a-captive’ facilities. These ‘rent-a-captive’ facilities enable the company’s clients to receive the benefits of participating in a captive underwriting enterprise without incurring certain disadvantages of ownership. In Malta and Ireland, the company acts as managers of underwriting enterprises. The company also has a wholly owned underwriting enterprise subsidiary based in the U.S. that cedes all of its insurance risk of loss to reinsurers or captives under facultative and quota-share treaty reinsurance agreements. Risk Management segment Risk management services are primarily marketed on an independent basis from the company’s brokerage operations, to Fortune 1000 companies, larger middle-market companies, nonprofit organizations, public sector entities, and underwriting enterprises, such as insurance carriers and captives. The company manages its third party claims adjusting operations through a network of offices located throughout Australia, Canada, New Zealand, the U.K. and the U.S. While this segment complements the company’s brokerage offerings, approximately 93% of the company’s risk management segment’s revenues come from clients not affiliated with the company’s brokerage operations, such as underwriting enterprises and clients of other insurance brokers. The company expects that the risk management segment’s most significant growth prospects through the next several years will come from: Program business and the outsourcing of portions of underwriting enterprise claims departments; Increased levels of business with Fortune 1000 companies; Larger middle-market companies and captives; and Mergers and acquisitions. Corporate segment The company wound down its clean investment energy investments’ operations in 2022. The company has investments in limited liability companies that own or owned 35 commercial clean coal production facilities that are qualified to produce refined coal using Chem-Mod LLC’s proprietary technologies. The company owns 46.5% of Chem-Mod LLC and is its controlling managing member. The company also has a 12.0% noncontrolling interest in two dormant, privately-held, enterprises, C-Quest Technology LLC and C-Quest Technologies International LLC (which the company refers to together as, C-Quest), which own technologies that reduce carbon dioxide emissions created by burning fossil fuels. At this time, it is unclear if C-Quest will ever become commercially viable. Clients The company’s includes commercial, industrial, public sector, religious and nonprofit entities, as well as underwriting enterprises in the company’s reinsurance operations and risk management segment. Regulation Many of the company’s activities throughout the world are subject to supervision and regulations promulgated by regulatory or self-regulatory bodies, such as the SEC, the NYSE, the U.S. Department of Justice (DOJ), the IRS, the Office of Foreign Assets Control, the Federal Trade Commission (FTC) the Financial Industry Regulatory Authority (FINRA) and the Financial Crimes Enforcement Network in the U.S., the Financial Conduct Authority in the U.K., the Australian Securities and Investments Commission in Australia and insurance regulators in nearly every jurisdiction in which the company operates. Regulations promulgated by the U.S. Treasury Department pursuant to FATCA require the company to take various measures relating to non-U.S. funds, transactions and accounts. History Arthur J. Gallagher & Co. was founded in 1927. The company was incorporated in 1972.