Arthur J. Gallagher & Co.

Legal name

Arthur J. Gallagher & Co.

Headquarters

ROLLING MEADOWS, IL

Incorporated in

Delaware

Fiscal year end

12/31

Exchange & ticker

NYSE: AJG

Industry

Insurance Brokers

CIK

354190

Website

https://www.ajg.com/ ↗

IR page

https://investor.ajg.com/ ↗

Source: Form 10-K (FY2025) cover page and business description

Source: SEC EDGAR filing history. Release dates are the dates the earnings release was furnished to the SEC on Form 8-K (Item 2.02), which is normally the day results are announced. Fiscal years are labeled by the calendar year in which they end.

• Brokerage

  Retail commercial insurance and benefits brokerage

  Examples: Property/casualty, health & welfare, cyber, D&O, workers' compensation

  Organized around industry niches such as construction, healthcare, and real estate.

• Brokerage

  Gallagher Re

  Examples: Reinsurance placement, catastrophe modeling, capital modeling

  More than 77 offices across 27 countries.

• Brokerage

  Wholesale and MGA programs

  Examples: Hard-to-place risks, Lloyd's access

  More than 75% of wholesale revenue from non-affiliated brokers.

• Risk Management

  Third-party claims administration

  Examples: Workers' compensation, liability, and property claims

  For self-insured organizations and captives.

Descriptions are from the FY2025 Form 10-K's Item 1.

Most revenue is commissions — a percentage of the premiums clients pay insurers — so it rises and falls with insurance pricing, which Gallagher doesn't control. Fees, contingent and supplemental commissions, and claims administration fees make up the rest. Revenue is seasonal because it follows policy effective dates.

• Brokerage commissions and fees

  Brokerage: $12.2B of FY2025 revenue (87%)

  Typical term: Commissions generally follow premium levels on placed policies

  Gallagher doesn't take underwriting risk on a net basis.

• Claims administration and risk management fees

  Risk Management: $1.6B (13%)

  Typical term: Contract claim settlement and administration, including performance-based fees

Source: Form 10-K (FY2025) — Item 1 and MD&A

Gallagher's 10-K says many insurance brokerage, reinsurance brokerage, and benefit consulting firms compete with it, and that two of the firms it competes with in global brokerage and risk management have larger revenues. Its claims administration business competes with stand-alone firms and divisions of larger firms; private equity-backed firms and insurtech start-ups are also entering. No company is named.

Company names link to this site’s analysis where one exists; “site ↗” opens the company’s own website.

Gallagher has completed about 780 acquisitions since 2002, mostly small regional agencies and benefit consultants; 2025 added two unusually large deals.

1. Aug 2025

   AssuredPartners

   $13.8B

   Older deal, core to today's business

   A leading U.S. insurance broker covering commercial property/casualty, specialty, employee benefits, and personal lines, with operations in the U.K. and Ireland.

   Stated purpose (company)

   Part of the brokerage segment; the 10-K calls it the largest acquisition in Gallagher's history and expects about $575M of integration expense over three years.

   Source: Form 10-K (FY2025) — MD&A, Acquisition of AssuredPartners and Woodruff Sawyer

2. Apr 2025

   Woodruff Sawyer

   $1.2B (cash on hand)

   Commercial property/casualty, employee benefits, and risk management services for middle and large market clients, with over 600 employees.

   Stated purpose (company)

   Added to the brokerage segment; the 10-K groups it with AssuredPartners as larger than Gallagher's usual tuck-ins.

   Source: Form 10-K (FY2025) — MD&A, Acquisition of AssuredPartners and Woodruff Sawyer

Figures as disclosed in the FY2025 10-K.

Inputs (FY2025): free cash flow $1.79B (operating CF − capex); enterprise value $79.48B = market cap $67.36B + debt $13.51B − cash and short-term investments $1.4B; r = WACC of 6.7% using this page’s default assumptions (β 0.59, risk-free 4.0%, market premium 5.5%).

A simplified model for seeing what the market price assumes, not a forecast or a target price. It treats free cash flow as growing at one constant rate forever; the result swings widely with small changes in r and g, and is undefined when g reaches r. Free cash flow here is operating cash flow minus capex, which is after interest — a full DCF of enterprise value would use cash flow before interest. Market cap and enterprise value use the fiscal year-end price, not today’s.

• ✓

  Operating CF ÷ net income: averages 1.59x

  Profit is backed by cash coming in.

• ✓

  Accrual ratio (latest): -0.6%

  A small share of profit rests on accounting estimates.

1. 1. Compounding through acquisitions

   Gallagher has grown from a one-person agency to the third-largest broker, combining about 6% organic growth with a steady stream of acquisitions.

   What has to hold

   Acquired firms keep their brokers and clients, and integration stays on budget.

   The other side

   AssuredPartners is far larger than the usual tuck-in deals, and the 10-K flags integration risk and possibly inaccurate deal assumptions.

   Evidence: Form 10-K (FY2025) Item 1 and Item 1A

2. 2. Fee business without catastrophe risk

   As a broker, Gallagher earns commissions and fees without carrying underwriting losses.

   What has to hold

   Insurance premiums keep rising with prices and exposures.

   The other side

   Commissions follow premium levels, so a softening insurance market would slow revenue.

   Evidence: Form 10-K (FY2025) Item 1 and MD&A

3. 3. Rising dividend

   Dividends per share rose every year from $1.92 (FY2021) to $2.60 (FY2025).

   What has to hold

   Earnings keep growing.

   The other side

   At a P/E of about 45x at FY2025 year-end, the dividend yield is low and the price already assumes continued growth.

   Evidence: SEC EDGAR XBRL

P/E, dividend yield, and payout ratio use the FY2025 year-end share price.

1. 1Governance & quality

   Integrating AssuredPartners

   Company disclosure (summarized from the 10-K)

   The largest acquisition in Gallagher's history brings integration complexity, especially in technology systems; Gallagher expects about $575M of integration expense over three years.

   Company’s stated mitigation

   Long experience integrating acquisitions.

   This site’s assessment

   Impact High / Likelihood Med

2. 2Demand & macro

   Insurance pricing cycle

   Company disclosure (summarized from the 10-K)

   Commissions follow premium levels, which are cyclical and set by insurers; if renewal premium increases slow, revenue growth could slow.

   Company’s stated mitigation

   The 10-K says Gallagher may adjust budgets for acquisitions, capital spending, dividends, and debt repayment if commissions decline.

   This site’s assessment

   Impact Med / Likelihood Med

3. 3Labor & workforce

   Losing brokers

   Company disclosure (summarized from the 10-K)

   Gallagher has lost key brokers and groups of brokers, with their clients, to competitors in the past.

   Company’s stated mitigation

   Agreements with brokers and client-facing employees, and long-running talent programs.

   This site’s assessment

   Impact Med / Likelihood Med

4. 4FX & interest rates

   Interest rates

   Company disclosure (summarized from the 10-K)

   Lower rates reduce investment income on cash and on fiduciary funds held for clients and insurers, and on premium financing.

   Company’s stated mitigation

   Lower rates also reduce borrowing costs.

   This site’s assessment

   Impact Med / Likelihood Med

5. 5Competition & technology shift

   Competition and AI

   Company disclosure (summarized from the 10-K)

   Two competitors have larger revenues, consolidation and private equity investment strengthen rivals, and competitors' use of AI could give them an advantage.

   Company’s stated mitigation

   Niche expertise and data analytics.

   This site’s assessment

   Impact Med / Likelihood Med