AJG - Earnings call transcript Q2 2021 | Arthur J. Gallagher & Co.

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Operator

Good afternoon, and welcome to Arthur J. Gallagher & Co.'s Second Quarter 2021 Earnings Conference Call. Participants have been placed on a listen-only mode. [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 security laws. subject to and differ are cause that statements results actual materially. forward-looking to uncertainties risks could These Please refer filings to contained on in the forward-looking cautionary statement company's its XX-Q and XX-K, and X-K statements. for details the more risk factors

my section measures It and reconciliations well to call begin. President the other pleasure information these materials non-GAAP other is to refer Relations on measures, this in Co. In addition, Arthur please Patrick the of the Mr. J. discussed website. Gallagher, for may CEO regarding of you and now the J. as company's as & earnings Gallagher introduce Investor Gallagher, release Chairman, of

J. Patrick Gallagher

Thank for you, for you quarter afternoon, joining thank our Laura. us XXXX Good and second earnings call.

today to improved Officer, Chief long-term all me all on our We acquisitions, of through and culture. quality Howell, the excellent priorities had heads four the delivered call as unique grew as our operating grew quarter. is Financial maintaining Gallagher divisions. our drive We of second an our with our Doug team raising well shareholder our We The value. operating while productivity On organically.

Brokerage segments, XX% adjusted million new in it's our thrive. basis margin of points. of expansion points, on in we X.X% importantly, Net revenue. margin XXX EBITDAC the more Risk our annualized Most continues in Gallagher mergers eight minutes. expansion growth earnings quarter, which but and to adjusted over organic than spend we estimated of completed XX basis posted growth, culture for when with some time For And $XX revenue, XX% timing, combined will Management Doug a few

measures. on quarter fantastic a all Just

we well-positioned have Towers comment for a termination clients, here's our the for been discuss to earth. support let With Watson transaction. are very remained how would our opportunity. greatest brokerage in in lot were about There all on they about great have and We Willis this, Willis to value the a We're each to We of the new team. before briefly ultimately performed our addition excited loved purchase stakeholders. detail, business businesses of certain would complete agreement of But I operations. Now, our point. to of more our drive key without the at people the and great ones compete or me

our Our stronger about culture and excited future. is I'm ever, than

Okay. with Starting X% that timing. and expectation Back closer our better of segment. Day for quarterly was IR to results. revenue a revenue than organic adjusted strong to at was Reported Brokerage June growth growth, little XX%, our X.X% our

higher net continued and basis expanded discipline. highlighting earnings by XX our our margin expense adjusted Our moved margin points, points XX by basis EBITDAC

Another Brokerage team. excellent quarter the from

our Let breakdown me the by operations. geography. you walk around organization P/C our and with Starting world

than with very First, more X% operations strong our retail were domestic organic.

XXXX second was nearly business quarter MGA open includes excellent, This New wholesale XX%. above Services, brokerage Placement levels. XX% and our businesses. X% organic Risk our and grew and binding programs in domestic nicely operations, organic

organic. X% our retention than new bolstered levels. New rate business and of was solid at X% new was retention. Canada retention. better Specialty posted good growth grew Outside outstanding, of were new XXXX exposure from fuel Zealand up benefiting New business finally, business top and operations and X% XX% and on excellent the And and and nearly both Australia, stable by combined production. U.S. U.K. was XX% retail than business more by

consulting brokerage Moving to our employee benefit business. and

commentary sequential quarter our was organic is and quarter IR ahead also of XXXX. the first Day over which June XXXX Second and step-up X%, another second about up of half

of service and it's and fee encouraging businesses, an sign half the growth our for in improves, welfare year. health business -- for we're encouraging which second activity favorable As consulting seeing retirement more core is the

benefits and performance. X%, X%-plus pushing combined around way So really but either Brokerage timing at segment total another X.X%, X%, strong reported was organic when with I P/C

few positive to are pre-pandemic exposures second adding higher the their seeing overall, like with existing remain quarter premium coverages increased Customers policies across a our comments and economic I'd on activity Global at were to P/C same client market. and are endorsements quarter. policy were similar the make P/C and base. renewal monthly increases And levels. we Next, rates first trending time, than overall, firm the

was Moving up in retail liability about X%, by increases increases liability. professional including was around up U.S. professional X%, and world, the package. double-digit in driven Canada

is X%. Australia up Zealand and flat New

finally, brokerage Moving to operations And specialty the X%, up business up open within were retail while U.K., was over wholesale was binding X%. XX%, up was with XX%. part RPS, most about our

premiums clearly are geographies. all still So, increasing nearly across

renewal will forward, pandemic. And professional back environment profitable the to on elevated current for feels impacts cut umbrella, or continued it lower of less that natural Carriers or time. business, catastrophes of some capacity more budge the back property, persist liability, and in cyber the of offering terms lines some like conditions to have or limits yet haven't to points. attachment reverted Looking

environment the are difficult clients, and to the likely foreseeable rate is That for frequency Social increases for pressure and this, all economies future. continuing on too remain as inflation We rates. investment some are see persist the for recover of to the P/C carriers that making are potential and strong returns for time. top case, remaining to a low likely increased global our claim

Moving to our benefits business.

customer levels, retail, grabbing is hospitality. like little and slowly Our headline sectors base a leisure, pre-pandemic returning towards than more

to from and our even expecting well-positioned Further, businesses and controlling and XXXX their their workforce So, retaining in deliver clients HR half. to units organic the in consulting costs attracting, pivot beyond. solutions as very are motivating, second growing better we're and prospects away

second year the in X%. I better organic terrific first I a will as half full could towards here be the half we sit So, and XXXX. would organic take That be step-up organic than X.X% brokerage from reported think today, XXXX

thank quarter, new partners representing during over professionals. We warm very all our growing second a seven to Moving $XX mergers us. the Risk onto revenues. annualized of to our joining completed estimated and one I Management million extend of Gallagher and of to for family acquisitions. I'd like And welcome Brokerage merger

look acquisition I tuck-in XX revenues. pipeline, signed representing our or and sheets being at have more prepared, annualized of term merger million than around $XXX we As

Our tools, data, pipeline to capital in grow to second and of and market owners attract continues given half And our taxes. year, platform will U.S. leverage their expertise, expect relationships to our entrepreneurial potential businesses. grow the gains looking changes we that the the

be merger to XXXX successful is year up So, strategy. setting for another a

Next, segment, Gallagher our Management Bassett. move I'd like to to Risk

benefited era lift related XXXX exceeded Day our claims an Second core wins, within new quarter organic increased to a IR growth expectations new mid-teens, adjusted workers' XX%. and from June business revenue our We easier pushing better comparison. than our XX% of and pandemic EBITDAC was arising compensation margin

Looking double-digits. the new activity economic our nicely rebound to third forward, organic solid should business employment, quarter and and in in lead fourth

year, our be XX% XX%. and over to margin the expect organic remain just to For EBITDAC above we

what makes decide we've our our what months, attracts to the wake different. day way. open clients. of best back us So, every be things culture partners mastered preserving excitement we That's employees It about up has merger and never Ultimately, people Gallagher the it's a us and I together. that special been It makes franchise. in do and way, the believe to being ultimately because as our last over It's that And very employees unique yet the pandemic. culture exciting an offices right the culture. the strong. keeps time Gallagher our Gallagher. And us XX,XXX-plus the flexibility part XX our depths of of the globe, hearing I'm as around the during that's together

be to So, quarters shaping excellent in with two XXXX the up an is year. books,

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

Douglas Howell

hello and everyone. Pat Thanks

our Pat then little give on time excellent year. Today, expenses I'll you liquidity the finish up organic margins. I'll CFO and commentary and with of items document, and the you quarter As of said, half through management. our and current on capital an spend on some and Then, I'll a some cash, walk extra comments first thinking on

Okay.

earnings really Headline X.X%, to running two organic page Brokerage own, table. that. the all for There's closer its but organic on move X%. as release segment Let's of to the said, pat in and of excellent reasons four

related the First, in recall unfavorable points. caused timing that basis XX little some timing to first commissions we call had in quarter our quarter, here contingent a second that that favorable

quarter XXXX. Second, also XXX accounting in first revenue the of then adjustment our we XXXX, adjusted quarter we of took recall that second the in that

We difficult more a combined don't for in second creates quarter, here call similar second in XXX expect basis points this the the that year headwind about that headwinds quarter. two These compare basis of a So half. second about items points. XXX

Okay.

page table. EBITDAC adjusted to to go Let's the Brokerage six

save the we this the You'll $XX shows here expanded are second terrific post our Brokerage see the that any points quarter pandemic margin in depth in is holding basis by at our second quarter. by all lot quarter quarter XX and our savings. team, that the EBITDAC segment work expansion indeed in Considering to of last a of million year we was

So, $XX natural question million $XX margin was and Answer to relates utilization X.X% incentive that in right. expenses modest a to million on what of million cost the this year of levelize self-insurance savings and second pandemic of which higher comp. is about organic came when the our for pickup mostly that about plans, is, the XXX feels expansion? quarter, T&E $XX medical you second quarter, last about underlying back basis That points,

savings this that's really quarter. $XX held cost So, we terrific. million And of

we can think a of perhaps period will more hold those but back. come our forward, savings, costs naturally continue lot Looking to of than some we pandemic half,

return are million year relative we now costs and of of million quarters. those fourth $XX to the As of the think both about in quarter, returned last numbers third same $XX quarter in

third were after expansion? might is the margins X%, need XXXX, again, would say expenses the you just fourth still post real really Recall expanding margins do points organic XXX story. flat. at quarter basis and what have looking holding those in question which to at and about the margin of year, the So, we overcome beginning be, natural Math to

at we're Now, looking expansion full story. year a margin

business would What be expansion productivity margin well a assuming full highlights points. great year a XXXX. organic again, That math with even in operate. the for return we full two-year the point margin of another we say would story. do of XXX mean improvements now in expenses, X%, So, expansion the really over illustration, how and and basis That our are and ingrained would how cumulative of that let's show

showing also of savings. that XXXX in sustained year, table of expect we cost Let's EBITDAC to margins the move Management above can margin full the our segment fantastic. is onto step-up XXXX. be XX.X% the segment induced for Risk can Risk on the XX% Adjusted deliver team in quarter page in to seven. margin pandemic Meaning the Management that the continue And EBITDAC hold some

to the in blue the now to One on our related to months. the revaluation line. the upside. million associated statutory When a energy our June, IR $XX the that increasing $XX came adjusted a late of to post tax wind two terminated two in net the were second Also four certain lines the Let's in CFO our back to our thanks it and page M&A quarter tax interest our we U.K. is the move Accordingly, higher June of website. is section that corporate rate. adjustments. estimate control deferred XXXX and than Towers shows section, related pretty better range natural past the results for to in gray document increase production and second with estimate, gas Comparing items, we're June on both Day banking year the Watson of earnings notice to areas corporate Clean in commentary in other country close charge prices. acquisition, cost those Willis million full XX energy through one-time hot less the quarter you non-GAAP

million. third the million quarter after you'll That's redeeming XX-year $XX $XXX to related million charge mid-May. tax non-GAAP in to senior that's pinkish $XX is adjustment the mostly the in debt. This ahead Looking notes see we of for section, and to issued

may Savings million also page fourth read should lead interest tax lower of release. banking to adjusted the three earnings also of quarter. third This each You'll on and be and to after quarter $X million $X expense. that

now peach the section. colored five turn you to If to CFO commentary page go the

our in during models years. another what energy the will show will our show calls cash Day couple P&L is last reminder of Just investments we've beginning last discussing for Rather we earnings. clean year GAAP and of been flows XXXX, substantial in million these and as XXXX a the consider IR $XXX six this sure our for XXXX through a your cash years. million to statement, it to call year seven flow beyond. I build you to lot, I I've know you just highlighted $XXX but want say make this

multiples. no cash go I to billion billion, look if cash. facility. and At also at put million on the upwards the XX, gets I after of $XXX dividends, and the page When for the redeem on of plenty capital half would was billion work tax change So, And announced We'll second that's next line borrowings we'll capacity. CapEx, a of to to million top cash. pipeline of would about million $XXX we million June of taxes, net let's billion that have cash that use Means just sheet also on in hand to M&A. debt have leave I rate first balance $X fair credit to cetera. gains to today repurchase out $X.X generation opportunities $X.X $XXX XX, of et another momentum, the our program, Then capital we us $X.X have with share interest we discussed. we really a think that And have outstanding $XXX borrowing about add

Okay. quarter, Those cash comments, to excellent are position. Pat. second an really bright excellent outlook the for half Back a half my terrific a and first you, an

J. Patrick Gallagher

think Laura, we take some Doug. questions now. Thanks I

Operator

first Our Fargo. of comes Instructions] the line [Operator Wells Elyse with you. from question Thank Greenspan

You may proceed with your question.

Elyse Greenspan

Hi. evening. Thanks. Good

J. Patrick Gallagher

evening. Good

Elyse Greenspan

My first on, growth your comments. Pat, question organic is

full you get year would I the mentioned X%. guys think you that to

half right, So, that or thinking, for come half is the if second the imply you the my a would XX%. quarter sitting Is within the that timing we to math Brokerage? half double-digits second guys close that with at to thinking close you year, the given get are X.X% expecting wrong in of are impact back something you first if were in there so to the year

J. Patrick Gallagher

think that, Elyse, strong little math. Yeah. I based might on you be the on a

again. So, it look at just take a

are why towards more think X%. I produced like, math

Elyse Greenspan

Okay.

X%. So,

Willis guys a Okay. stock for repurchase billion then issued $X.X right, Close. deal. And you question, my share program, the to the announced buyback second effectively

And the So sense I little of Is a to quickly? bit upon tuck-in is Or on year? come you timing something is dependent also expectation get the will some then, all the shares? expect some deals buybacks. just them of wanted to of that together you buyback this pretty that that those a complete if

J. Patrick Gallagher

I that We No, of certainly in right by short we think the our is $X.X order billion. now, as year. we can intent get and end think the sit to done repurchase also the

-- the won't we access by here let point sip Now that idle we're means. capital is any

Elyse Greenspan

you then, points us That's Okay. helpful. give X%, could were, And giving of were that data if pull on that improvement. you information the margin XXX side and of example, to you if helpful show your a basis you right, an get some guys margin

within about adjusting the that for margin days So, of expectation back of is year? states Brokerage with this kind or impact is or the we'll that of after be the that XXX coming points a

J. Patrick Gallagher

Yeah.

for expansion, we able into clearly about see costs I better should those we to XXX of points full that of think, margin basis using too. if even the illustration back we is coming with X% And a post what I our doing structure. the saying was better X%, if you'd be year,

Elyse Greenspan

That's for Okay. helpful. color. the Thanks

J. Patrick Gallagher

Sure.

Douglas Howell

Elyse Thanks,

Operator

Our next of David comes ISI. from question Motemaden Evercore the with line

You may your proceed with question.

David Motemaden

if Good that costs, I look continue $XX a I wondering, year? sort non-comp, line, non-D&A, this business, Brokerage it spoke to OpEx side. guess expense the like Hi. little you that sort just flat million Doug, the take think in on in at question, expenses I just in year-over-year were of rest of the had and the evening. right If of expenses just about the this operating out would underlying incremental expenses, year-over-year. roughly I I just comments. bit of is for But expect a flat or you the your the that I'm looks

Douglas Howell

far but entire M&A. flat the or So, into and take in also spread did being of factor did you you're out OpEx some to M&A, that when did factor you not million it, pretty of you comp close $XX of then in off you

David Motemaden

OpEx. Yeah. I purely was looking just at

the it the can last just course of that's but of you that the the guys was changes made something year. of given for So, year, roughly continue over rest think you flat, some

Douglas Howell

Yeah.

will there quarter. to I was of in the see some million between back our between expensive, the think OpEx think starting $XX the savings estate. than $XX come I We're the That large, I underlying in see areas, think maybe some and savings will -- compensation. fourth come starting quarter million will by real But guess and I to in costs, third professional and we're fees. be other in IT split back in

entertainment seeing expenses there you us increases our and we're there for some seeing and be pandemic. some are clients But are in be expecting happy from because to good the to travel We are learnings of it.

of well care that all We world deploy so mail. It's a of the some anywhere button. outgoing so taken saving have we touch the our pretty incoming, mail centralize there, of costs with around we can can

been some that expense continuing out that going So, good there to have to harvest -- on are projects the line. operating of we're

David Motemaden

COVID a or Got better you XXX. to thinking of would've in it sort come expense than it. saves, Is was the that still I you're XXX the about, I I good a -- guess, to yeah, in that? of to of that level -- That sustainable getting sort bit continues -- from think update the on Yeah. that any terms sort to of thought. of think any changes

Douglas Howell

Yeah.

say -- think that $XX pandemic. a hold call can of million that Let's let's of $XX it we million level we $XX million -- set. saving, the were And We let's during that. quarter

XXX times, the you half, was and XXX by came your I -- four from, back divided XX So, But from? again, then or five -- a get where two. where'd four unless know and to don't it

David Motemaden

range, of using you guys have But that that a more given. sense. makes I was

Douglas Howell

Okay.

David Motemaden

that the down of rate That you gains of course we just Thanks at different over a Could makes some X% versus business talk of break just sort year. side, for organic, each guess, guess sense. the Whether I of is, the about if how to that. those in this trend versus expect maybe look on of basis? -- also could that? sort share clean the growth Brokerage on just you I you and components of exposure new and the

J. Patrick Gallagher

Okay.

say the second also we rate quarter we XX/XX. is business was that now that same and from XX% stronger. getting lift same, the think rate stronger about and were, new exposure about So, Retention for it's range business than year right or new together, combine where when exposure. I

David Motemaden

Got it. Thank you.

Operator

next Our comes question with Hughes of line Mark from the Truist.

your may with question. You proceed

Mark Hughes

you afternoon. Thank much. very Yeah. Good

J. Patrick Gallagher

Good afternoon, Mark.

Mark Hughes

some to up, markets just cyclical other think compared ramped end end your been of bit? little on you markets. I maybe a have expand that Could getting little a slower more

Douglas Howell

What mean end do you markets?

Mark Hughes

I You're heard properly, customers. I but your didn't, If talking if tell your about customers. me you

Douglas Howell

Our stats you see citing travel recovery employee headline employment that related -- hospitality, benefits lot business, industries. are in a generally transportation of retail,

in is diverse quite isn't our just what not work of the the you more those customer It's that. Mark? in those base down it's concentrated and Our at business. about, than you're industries. work That see numbers And it's Nothing, customer there. just to benefits return mix returning asking base the business to headline

Mark Hughes

like commentary, than looking Yeah. QX, you better that there's Pat, seeing compared good little as a might No, of or last like be some but to others Yeah. perhaps? do it pricing, your heard Right. deceleration. question. at more not time some Why specific you seems potential may discussion all on it they your my of -- optimistically think seems have broader in the was Gotcha. it Then, I numbers were

J. Patrick Gallagher

to I to field No. I'm any just sit, and the be for just seem underwriting talking I when doesn't where from when talking in to our there I'm Mark, partners, appetite people -- cutting.

is thing increase down, not but of oh rate seeing say, people we've got this I'm Now gosh, right.

flood Let's the gates. open

Douglas Howell

a We're seeing bit. little

or were here market half that XXXX. think larger let's of of in a say, market, size of that higher a account increases the market end the I little larger throughout of think than, there I the in premiums first the smaller there's a bit we mid-market and -- XXXX saw little

So, really we're We're that quite is seeing just account in as as growing mid-market. large a rates they were the not if seeing market the past. fast not much not in as

quarter We are it more fourth first quarter. seeing with and consistent

You lose there, Mark?

Mark Hughes

No. No.

I'm of potential in thoughts adding forum, Any Here any -- I'm share you'd the just in in sorry. around seeing care public you I'm light Watson, back. Aon some market? if is to out moving staff curious noteworthy? breakup, for Willis people Towers anything that the a

J. Patrick Gallagher

you don't. no. But time. us long Well, Mark, as a know, We follow you

of we're And of that of big Our strategy across our hire -- for followed we've all depths there's doors talent the to organic open as hiring you in a the no doors the going production lines that of got. and the is continue part business to soft talent. doubt market, production us, all even our

Mark Hughes

good. you. Very Thank

J. Patrick Gallagher

Thanks Mark.

Operator

line Shields with Our next question Meyer KBW. the comes of from

You may proceed with your question.

Meyer Shields

M&A Thanks. million I wanted that of bit to it's management, on about your it as debt $XXX potential a raised the keeping, able comments million? I utilize interpret, capital guess being $XXX that little Doug, is you're

Douglas Howell

Absolutely. the of right for special in M&A more We towards on the a at, that, we a in that -- end cash looks Yeah. $XXX That's year, the have but to how mandatory and next now. year feature the of redemption there. bit depending part there's might pipeline the little million think borrow bank

here So, pay we'll the $XXX year. work along back. that that that we And the second then happened half with in raised get the -- to that million of what we'll that, with

Meyer Shields

tax Okay. this But I potential gains one. is because an placing capital likely in assets depress to increase that on sellers hard you expecting rates, these at might be find you're with all? of if

Douglas Howell

up pull will an think actually it I a same and might might might the on forward have less stay I put might truthfully, bit put more that think it a it but pricing little -- little that -- earn-out You end, front. and

as not Is bad. to pricing. So in on might earn-out, it's much on going I big decrease you but put say a it full you it, to here maybe have it cause turn year, feel wouldn't accelerate the that a multiple, in this

J. Patrick Gallagher

a No, there's deals for of out lot competition there.

Meyer Shields

enough. Fair Yeah.

Thank Okay. so much. you

Operator

the next Bolan Alex [Operator question from line Raymond Instructions] of James. Our comes [ph] with

proceed may with your You question.

Unidentified Analyst

behalf Greg on or guess as when in thought? kind to that and tuck-in is a the talking, Peters. the conversation sticking up of with you're now, within calling am Maybe as potential still of M&A, is, I conversation, of I tuck-in

J. Patrick Gallagher

time. coming every It's up

Unidentified Analyst

Okay. And at, looking Has then, of when is M&A, guess all? guess, I what considering? changed that you're acquisitions I at size the

J. Patrick Gallagher

By in remember insurance brought very No. We're knows at fact out also, If it's and in good tuck-ins. business looks way, month well. XX,XXX a was the agents there's just edition Greg this let's $XX this brokers in number that July America, revenue. XXX that million

So of players. the good tuck-in really, playing field is really full

Unidentified Analyst

and sense. Okay. expansion then, compared -- And might has, your that the and T&E margin thinking how maybe of deployment you touch changed T&E That on when be around to effect can XXXX. thoughts makes about

Douglas Howell

All right.

I Let word can hear me or question a understand your did if about see I in I -- that India wrong? thought had again. there, asked you

Unidentified Analyst

future of the -- then, didn't was guess T&E on considering No. say compared T&E effect I I no, India. to the on you're in and anything lower how XXXX. deploying maybe expansion It margin

Douglas Howell

self-governing Well, they're more that. Great. on. than their are on people somebody to we that. wants have on see clients right. have restrictions travel All no we go of first hold no And do it, to to welcome If where all,

will us to to meet wherever our them. We they them conduct clients in with would meet like business order

past. how quarter where $X want have from a and How to We there do of step-up much are million they we maybe that? were is probably So, in it. we the

maybe at depths million next extra there's our first next, that this then $XX maybe million pandemic. quarter, to So, million $X of quarter -- in quarter, $XX relative an we're $X the $XX million the million

thing is the now good than though, are being we were experts we The bring before. able it. virtually that to this our doing sale to more much actually of we're So, about point

to home of advantage they can we the if it every the Des a from aspect less in around and even with prospect world. there's there's or office, button. or We experts can person remember have right Moines, into drop our Iowa experts of now International do our lots we client conservative London that insurance but of that is virtually. international have, now folks, click our in want terrific -- travel, bring from So, customer's single that into the we

advantage really compete of But So and we don't they competitive that's than the with expert. somebody that. of just have time XX% smaller us the the

can our in bear, a expert capabilities hour we meeting, the drop travel In a in wins for bring be past some and going somebody three-day might more those to affair. two it's half leave to So, in or future. the that when to

So it's think extent, experts -- get a really the pandemic. the from to certain prospect the the that point terrific though to of expenses to the even return our might about of is ability outcome at the or point sale, virtually

Unidentified Analyst

appreciate That makes Okay. sense. I the answers.

Douglas Howell

Thanks, Alex.

Operator

Our the next question Research. Autonomous with comes from line of Ryan Tunis

question. your with proceed may You

Ryan Tunis

Good evening, guys.

J. Patrick Gallagher

Good evening.

Ryan Tunis

X% think second probably organic, you employee it’s about First the of half about mentioned, year, I get the question, X% benefits. thinking

back of that's into guys that try how lot a supposed half? spend how -- You the are would on fit thinking X% the about you to visibility how mean, I of

Douglas Howell

weeks, really plans is to people and we've -- even step-up of back get last to in units we're just stepping I think there's as We're calls. the starting participants lives starting HR up. and starting like to few number increase are the employee dental medical -- a covered plans in our continuing benefits get come sequential more seen, as consulting

So, the surprise quarters over then it's to four our of couple went benefit. employee went and me to next in it wouldn't six eight and

Ryan Tunis

of just mean see why of do by more do you those? deals you very but guys Pat, then, remind wholesale M&A? And Why it. us we wholesale What don't can year, few related. them you a XX -- be Got for seem a to

J. Patrick Gallagher

over XX acquisitions, last it's last done We're very active plus opportunistic. large We've the years some at acquisitions with months XX nice RPS. in over and there. think part the Ryan, we've RPS just built I

out, we we're of the MGA. course, built of the largest areas country's One

some a out very also hardship. young business and recruited program We our Gallagher strong, but done have that's And own the nice brokers, our built built way. of really we we've typical open own We've people there. acquisitions market

there's there's which a no, one back successful real at of lot month. there. IPO shortage actually no opportunities, of And of a competition, very hole So, no this

Ryan Tunis

Gotcha.

Okay. guys. Cool. Thanks,

J. Patrick Gallagher

Thanks, Ryan.

Operator

comes Stefano with Bank. line Deutsche Our from question of last the Phil

with your question. may proceed You

Phil Stefano

are Yeah. organic complaint offensive, then Congrats on tonight hope how to evening. lagging understand to to this I'm I -- next Thanks. peers. are over put issue seems it XXX, conversations how Good contingent the to it's people do in. X%, day? me the the but I'm that I'm going know you and with at be I want timing the even tomorrow looking quarter. the and respond this, is, not like to going the the guess, get feels going suspect not to I people I and I to growth as but sure --

J. Patrick Gallagher

think this Doug tactical Phil, it's he's at but I'll because side, let the let's good -- put that, way. I it give you Well,

anyone If of assurance. put every that, lot did you want you're them. dropping really I'm say. proud number competitors. over at and in so aggressively up the God team. had of up to our results of versus our our past a room, team take here's quarter and We a I'd great what morning look if you else bless a our And into years the gets sells

one think stance no take more up, I'm to clients. with I'm happy there's And Doug On I okay really that was answer. great a you get dander holding selling doesn't outstanding. basis, quarter this stronger. to look technical second anything, And and our a quarter others But but that people give so, that. the comparables, with fact And to I of insurance did the comparable our job quarter. my on

Douglas Howell

Yeah.

like insights want year much years, up said, find all your do think one isn't this quarter over might up worth quarter have are all in for to that And of about is so you of I from. and are the last in reported second those Pat two Phil, other math we're Brokerage And and think, I again, our XX% that I that do take them year if you us, delta add segment. organically on might think you wherever second aggregate things different. the coming that

to up this quarter second about number. the year same second quarter -- add quarter last The the might and

a for running quarter whatever. of at is higher Pat of guess to since since industry of of I clip like And this what X% say than bullish. XXXX. two excellent growth. growth or of think GDP. we've I organic is The would aberration our one is half that us outlook entire is posted fourth year pretty an Industry growing is I said, the organic best second towards isn't showing And us much level the or quarter the just

apart I how have the we mathematically two like answer it, that when be quarters you won't together like all that's So, far but for take would business. and

Phil Stefano

clients persistent. if guess, of your back I comes this that part more comes to the it year back about think -- I were that to the idea back suggesting, you're two

recovery guess, And seen we've so, we flow that into the in is ebb the don't numbers? get a last to the the that year. fair way and I that tie commentary

J. Patrick Gallagher

our The of clients. impact competition other Phil, put might rates than is our for better the way we're to a mitigating it, I doing job

Phil Stefano

Yeah. Yeah. Yeah.

door -- always Okay. about to the for the come. Got When you it. said talent I that think that wants open is

that going sideline the wondering, talent potential that, would part keep businesses there that the might shop talent of was be agreement acquired, be on the to non-compete any looking no you around. were that for from As within certain Willis or provisions for

J. Patrick Gallagher

Yeah.

and agreed, of we're speaking, which we general some some in But that We honor we intend in extensive. of production course, to limitations hire generally are that have they're discussion, those course, not to ability not there that limitations. our limited talent. We've But transaction, on. intend

Phil Stefano

Yeah.

past Congrats. second to I Okay. probably look, think few the story Perfect. the has been Thanks. none. years over expansion And margin

comments -- that's hope that it. and Appreciate get takeaway hopefully tonight. from my I the you me So,

Douglas Howell

All Phil. right. Thanks

J. Patrick Gallagher

Laura. Thanks,

Thank delivered, proud to just comments the excellent and day-out. Laura. significant few here. We our a around our make the you very obviously -- all delivering Thank being believe day-in this world, I value we're extremely and in I'm much. next for we quarter. second us best you, globe you the talk clients to quarter. of are for and me in evening, Let with team. Thanks business that we'll

Operator

conference. today's conclude does This

your the participation rest for disconnect at Thank you lines your evening. time. may of You this for your

Arthur J. Gallagher & Co. (AJG) 30 Jul 212021 Q2 Earnings call transcript