February 6, 2015 by Canadian Underwriter
Arthur J. Gallagher & Co. has released its financial statements for the quarter and year ending Dec. 31, reporting a 4.2% increase in fourth-quarter organic base fees and commissions, a 14.1% drop in Q4 net earnings and a 39.9% increase in Q4 revenue.
The Itasca, Ill.-based commercial brokerage and risk management services provider reported net earnings of $303.4 million on revenues of $4.6265 billion in 2014, compared to net earnings of $268.6 million on revenues of $3.1796 billion in 2013. All figures are in United States dollars.
In a securities filing released Feb. 3, Gallagher reported net earnings of $51.5 million in the final quarter of 2014, down 14.1% from $60 million for the same period in 2013. Revenues were up $39.9%, from $890.2 million in Q4 2013 to $1.2454 billion in the most recent quarter.
Gallagher is the fourth-largest broker worldwide (behind Aon, Marsh and Willis) when ranked by an estimate of 2013 commercial non-life broking revenues, Finaccord Ltd. reported last October.
Gallagher reported a 31.2% increase in fourth-quarter commission revenue, from $426.3 million in 2013 to $559.5 million last year.
For the full year, commission revenue was up 34.%, from $1.5531 billion in 2013 to $2.083 billion in 2014.
Within its brokerage segment, Gallagher also reported organic revenues, which excludes revenue from operations acquired in and disposed of in the year presented.
In 2014, Gallagher announced several acquisitions, including a majority interest in Noraxis Capital Corp. a brokerage that operates in Alberta, Manitoba, New Brunswick, Nova Scotia and Ontario. After its earnings release, Gallagher reported Feb. 5, 2015 that it acquired Ottawa-based Cohen and Lord Insurance Brokers Inc.
In the fourth quarter, organic base fees and commissions were up 4.2%, from $550.2 million in 2013 to $573.1 million in 2014. For the full year, organic base fees and commissions were $2.082 billion in 2014, up 3.9% from $2 billion in 2013.
“We had an excellent quarter to finish an outstanding year, and we are well positioned for 2015,” stated J. Patrick Gallagher Jr., Gallagher’s chairman, president and chief executive officer. “In the fourth quarter, our combined Brokerage and Risk Management segments posted 31% growth in adjusted revenues, of which 5.6% was total organic growth.