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| Statement |
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| Let's move on to the Risk Management segment and the organic and EBITDAC tables on Page 5 and 6, a really strong finish to the third quarter |
| So bringing it all together, as we sit here today, we see full year brokerage organic in the upper 8s and pushing towards 9%, posting that would be another fantastic year |
| For our combined brokerage and risk management segments, we posted 22% growth in revenue, 10.5% organic growth; GAAP earnings per share of $1.72, adjusted earnings per share of $2.35, up 22% year-over-year, reported net earnings margin of 15.5%, adjusted EBITDAC margin of 30.8%, up 78 basis points |
| Another great quarter by the team on all measures |
| Third quarter adjusted EBITDAC margin of 20.4% was strong and in line with our September expectation |
| And as pleased as I am with our third quarter performance, I'm even more excited about our future, future organic prospects, future M&A opportunities and our ability to become more productive and increase quality |
| Organic does reflect the lapping of last year's newer large business wins and margins remain terrific |
| As Pat mentioned, we continue to benefit from higher claim counts related to the new business wins from the second half of '22 |
| We had an excellent third quarter |
| Adjusted EBITDAC growth was 23%, and we posted adjusted EBITDAC margin expansion of about 55 basis points |
| I think retention will continue to be very, very strong |
| In fact, I think we're going to unleash an opportunity to really grow the top line |
| We have terrific momentum taking us into '24 |
| Our Canadian P/C operation was up 10% organically, reflecting solid new business and retention and more modest renewal premium increases |
| There's good opportunities for everybody at Gallagher, yes |
| Core new business wins remain excellent, and renewal premium increases were ahead of third quarter '22 levels |
| Our global employee benefit brokerage and consulting business posted organic of 6% with solid health and welfare results and continued strength across many of our retirement and HR consulting practice groups |
| Gallagher Re posted 20% organic, thanks to a strong 7/1 renewal season, another outstanding quarter by the team following an excellent first half |
| Specialty posted organic of 18%, benefiting from outstanding new business production, strong retention and continued firm market conditions |
| We still expect to grow over these wins by double digits during the fourth quarter due to our superior client offerings, some smaller new business wins in '23 and continued growth in claim activity |
| If we deliver on that full year '23 which show margins expanding 30 to 40 basis points or 80 to 90 basis points levelizing for the roll-in impact of Buck, that would be a terrific year |
| Those are my comments, another fantastic quarter by the team |
| Our returns have been terrific |
| And frankly, they're going to have our tools and they're terrifically excited about it |
| Second, our fourth quarter is historically a very strong cash flow quarter |
| Looking forward, we see full year '23 organic above 15% and adjusted EBITDAC margins pushing 20%, and that would be another fantastic year |
| But I'm really -- this is a good business for us |
| That's great work by the team to end up a bit better than our September IR Day expectations |
| A few soundbites: first, in total, we came in a little bit better than we foreshadowed at our September IR Day due to really strong results from reinsurance and London specialty; second, base commission and fee organic was strong at 9.6%; third, supplementals and contingents, together up 5% |
| Rather, these full-time Gallagher employees represent the very best service and support professionals who are passionate about our customers and have a culture of constant improvement, which is the Gallagher way |
| Statement |
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| It remains a tough environment for carriers, dealing with frequency and severity of weather events, including secondary perils, pockets of unfavorable prior year development in casualty lines, higher replacement costs, social inflation and rising reinsurance costs |
| So we believe carriers are likely to seek out further renewal premium increases and to maintain their cautious underwriting posture |
| At our IR day, we flagged some softness, mostly related to the Maui fires |
| But frankly, we're hearing of some stress in some of the PE-backed roll-ups where the combination of higher interest costs and earn-outs are pressuring their free cash flow |
| So really, our early estimates of maybe getting it done in September might have been a little optimistic on that |
| Over the last year, we have reminded that we have an accounting headwind to overcome |
| When it comes to casualty, reinsurers appear to be taking a cautious view of risk |
| Yaron Kinar I apologize, I had some technical difficulties |
| That will now create a more difficult compare, called out about a point of organic headwind |
| I know it's really difficult |
| Two reasons: first, lower borrowings on our line of credit and some of the M&A opportunities were pushed into October and November and second, lesser FX remeasurement headwinds |
| wholesale operations posted organic of 7%, including a couple points headwind from lower contingents |
| Property, in particular, is a big driving line for sure, and there just is a lack of capacity, and it is getting -- it continues to be -- whoever can tell the best story might just get a quote |
| It does assume a little bit of a drag from one quarter of Buck rolling into our numbers that naturally runs lower margins |
| All-in M&A, mostly Buck which naturally runs at lower margins, impacted it by about 65 basis points |
| And yes, we're seeing a lot of pressure on medical costs |
| I know it's really difficult to do, Mark, because of FX remeasurement gains |
| Gallagher helped, you can't believe it |
| We're just not seeing that |
| It blows the competition away and our merger partners can't wait to get their hands on it |
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