Arthur J. Gallagher & Co. Q1 2022 Earnings Call Transcript

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Provided by AlphaStreet
April 28, 2022
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Operator

Good afternoon, and welcome to the Arthur J. Gallagher & Co. First Quarter 2022 Earnings Conference Call. [Operator Instructions] If you have any objections, you may disconnect at this time.. 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 securities laws. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially.

Please refer to the cautionary statements and risk factors contained in the company's 10-K, 10-Q and 8-K filings for more detail on its forward-looking statements. In addition, for reconciliations of the non-GAAP measures discussed on this call as well as other information regarding these measures, please refer to the earnings release and other materials in the Investor Relations section of the company's website.

It is now my pleasure to introduce J. Patrick Gallagher, Chairman, President and CEO of Arthur J. Gallagher & Co. Mr. Gallagher, you may begin.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Thank you. Good afternoon, everyone, and thank you for joining us for our first quarter 2022 earnings call. On the call with me today is Doug Howell, our Chief Financial Officer, as well as the heads of our operating divisions. We had a fantastic start to the year. For the first quarter, our combined Brokerage and Risk Management segments posted 30% growth in revenue, more than 10% organic growth, net earnings growth of 28%, adjusted EBITDAC growth of 34% and adjusted earnings per share growth of 26%. And we were named a world's most ethical company for the 11th year in a row, an outstanding achievement on its own and a testament to our nearly 40,000 professionals around the globe As you can tell, I'm extremely proud of how the team performed during the quarter

So let me give you some more detail on our first quarter Brokerage segment performance. During the quarter, reported revenue growth was 32%. Of that, 9.6% was organic, which is just excellent. Rollover revenues of $380 million were pretty consistent with our March IR Day expectations and mostly driven by the December Reinsurance Brokerage acquisition. Doug will have some further comments on rollover revenues in his prepared remarks. That earnings growth was 27%. Adjusted EBITDAC growth was 35% and we expanded our adjusted EBITDAC margin by about 50 basis points, an outstanding all-around quarter for the brokerage team. Let me walk you around the world and break down the 9.6% organic, starting with our PC operations.

First, our domestic retail business posted 11% organic driven by terrific new business, strong retention and continued renewal premium increases. Risk placement services, our domestic wholesale operations, posted organic of 10%. This includes more than 20% organic in open brokerage and 6% organic in our MGA programs and binding businesses. New business was better than first quarter '21 levels and retention was consistent with prior year. Outside the U.S., our U.K. business posted organic of 14%. Within retail, fantastic new business and continued renewal premium increases helped drive 10% organic.

In our London specialty business, including our legacy Gallagher Re operations, saw 17% organic. Australia and New Zealand combined organic was nearly 10% driven by strong new business stable retention and higher renewal premium increases. And finally, Canada was up more than 12% organically and continues to benefit from renewal premium increases and great new business production. Moving to our employee benefit brokerage and consulting business. First quarter organic was up over 7%, more than one point better than our [Indecipherable] organic was in line with our expectations of 5%, and the upside in the quarter was driven by our international operations and our HR consulting, pharmacy benefits and various other life insurance product sales. So 7% organic in benefits, 11% organic within our PC operations, an excellent quarter.

Next, I'd like to make a few comments on the PC market. Overall, global first quarter renewal premium increases were 8%, consistent with the fourth quarter of '21 after controlling for line of coverage mix differences. Recall the renewal premium change includes both rate and exposure. So let me break that down around the world. About 10% in U.S. retail, including double-digit increases in property, professional liability and casualty somewhat offset by workers' comp and commercial auto.

In Canada, New Zealand renewal premiums were up about 8.5%, with professional liability seeing the strongest increases. In Australia and U.K. retail, renewal premiums were up mid-single digits driven by increases in casualty and package. Within RPS, wholesale open brokerage premium increases were up 11% and binding operations were up 6%. And in our London specialty business, we saw first quarter rate increases around 7.5%. Moving to reinsurance. As we noted in January, our 1/1 renewals showed price increases that varied by geography and client-specific attributes in loss history, even loss-free programs faced modest rate increases.

Our April Gallagher Re first review report is more focused on Japanese renewals which tend to dominate the April one renewal season. We saw pricing increases in property-related classes, while casualty pricing was flattish despite inflation being a key topic of discussion. You can access our April reinsurance market report on our website for more information. So whether retail, wholesale or reinsurance premium -- looking forward, we expect our mix shift away from workers' compensation renewals in Q1 to U.S. property cat renewals in Q2 will lead to premium increases in the second quarter, very similar to full year 2021.

And we see these difficult PC market conditions continuing throughout the remainder of this year. Carriers will likely continue their cautious underwriting stance due to rising loss costs and increases in reinsurance pricing. And this comes at a time when the conflict in Ukraine is elevating geopolitical uncertainty, courts are reopening and global monetary policy is tightening. So from our seat, it looks like carriers will continue to push for rate and don't see a dramatic change in the near term.

Moving to our employee benefit brokerage and consulting business. I see domestic labor market conditions in '22 working in our favor. There are more than 11 million job openings in the U.S. That's five million more jobs available than people unemployed in looking for work. And that imbalance lays the groundwork for robust demand for our HR and benefits consulting services as employers look to attract, retain and motivate their workforce. So we finished first quarter with organic of 9.6%. Given our first quarter results and the current insurance market conditions, as we sit here today, we think 22% organic should end up even better than '21.

Moving on to mergers and acquisitions, starting with some comments on our recent reinsurance acquisition. Integration is progressing at a fast pace and is ahead of schedule. Alongside the speed that we are executing comes the pull-forward of some of the future integration costs which Doug will cover in his remarks. Also, we had a strong first quarter with the legacy Gallagher Re team growing 30% and our new reinsurance operations delivering towards $340 million of revenue and over $170 million in EBITDAC. And our reinsurance colleagues are melding together extremely well. So it continues to be a really good story. During the first quarter, we completed five new tuck-in brokerage mergers, representing about $32 million of estimated annualized revenues. I'd like to thank all of our new partners for joining us and extend a very warm welcome to our growing Gallagher family of professionals. As I look at our tuck-in merger and acquisition pipeline, we have around 40 term sheets signed or being prepared, representing nearly $250 million of annualized revenue. We know not all of these will close. However, we believe we will get our fair share.

Next, I'd like to move to our Risk Management segment, Gallagher Bassett. First quarter organic growth was 15.2%, better than our IR Day expectation due to a strong March, some new business wins and higher-than-expected COVID claims. Adjusted EBITDAC margin was 17.3% and would have been 18.5% but we had a litigation settlement late in the quarter. Moving forward, we think the remaining '22 quarterly margins will be closer to our 19% expectation. We again saw increases in new arising claims across general liability, property and, to a lesser extent, core workers' compensation during the quarter.

New arising COVID claims were well above what we saw during the fourth quarter. However, core claim counts, which tend to have a greater impact on results, still have room to rebound fully to pre-COVID levels. Looking forward, we see ample opportunity for organic revenue growth from existing clients, growing claim counts and new business and expect organic to be around 10% per quarter for the remainder of the year. And let me finish with some thoughts on our bedrock culture. I believe our outstanding financial results are made possible because we're able to act as one company, united by one set of values, the Gallagher Way. As I mentioned earlier, we were once again named a world's most ethical company by Ethisphere, a truly global effort that reflects our colleagues' care and integrity to each other and our clients. Every day, I hear stories of our colleagues working together as one team to give our clients exactly what they need all around the world. That collaboration is possible because we genuinely want to deliver the best possible service at all times. When one team wins, we all win. And then there's the way our people give back to their communities.

In March, we announced a special matching donation to provide humanitarian relief to the people of Ukraine. Thanks to the generosity of my Gallagher colleagues, we're able to donate over $1 million for necessities like food, water, supplies and first aid. I'm proud to stand together with my Gallagher colleagues impacting communities around the world, and that is the Gallagher way.

Okay, I'll stop now and turn it over to Doug. Doug?

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Thanks, Pat, and hello, everyone. As Pat said a fantastic first quarter and start to the year. Today, I'll get to my typical comments on organic margins, clean energy, cash, etc. And I'll also do a financial recap of the Willis Re acquisition, but first, the modeling heads-up regarding rollover revenues this quarter. We typically don't comment on consensus estimates, but this quarter looks like there is a large variance in brokerage segment rollover revenues relative to the guidance we provided within our CFO commentary document during our March 16 IR Day.

When we get to Page six of today's CFO commentary document, you'll see we've added a table that shows consensus overstates rollover revenues by approximately $40 million versus the number we provided in March. That has an impact of overstating consensus EPS by $0.06. We hope you take this into consideration as you analyze our performance relative to consensus and to your model.

Okay, with that housekeeping behind us, let's shift to the earnings release, to the Brokerage segment organic table on Page three. All-in brokerage organic of 9.6%, we had a really strong finish to the quarter, some nice new business wins by the P&C team and a terrific finish by our benefits consulting teams.

You'll also see strong growth in both contingents and supplementals. The Ukraine-Russia conflict impact was small, about $5 million of revenue, which is about a $0.01 hit this quarter. Looking forward, it's looking like it's small also, maybe another $5 million revenue impact spread over the next three quarters. Given our strong start and given our current favorable outlook of the market, as Pat discussed, we could be pushing nicely towards upper 8% to 9% full year organic growth here in '22.

Next, we'll turn to Page five, to the Brokerage segment adjusted EBITDAC margin table. Headline all-in adjusted margin expansion for first quarter was 49 basis points, right in line with our March IR Day expectation. Recall that expansion includes a favorable seasonal impact from reinsurance roll-in, offset in part by a return of expenses that as we come out of the pandemic and it also has a little more incentive compensation given our stronger first quarter organic growth and full year expectations. Repeating what we said during March, we are well positioned to deliver around 10 to 20 basis points of full year adjusted margin expansion.

But remember, as we discussed here in '22, there will be margin change volatility quarter-to-quarter. That's due to expenses return as we come out of the pandemic and the roll-in impact of acquired reinsurance revenues. So let me walk through what we said in March,.50 basis points of expansion here in the first quarter, then expecting second and third quarter margins to each be down around 100 basis points, but then that flips and we expect fourth quarter margins to be up around 100 basis points. The math, given that we are seasonally larger in the first quarter, gets us back to that 10 to 20 basis points of full year margin expansion. Looking way out towards '23 that quarterly margin change volatility should go away with the pandemic behind us and reinsurance fully in our book.

Okay, let's move on to the Risk Management segment and the organic table on the bottom of Page five. You'll see 15.2% organic in the first quarter. That's just terrific work by the team. And with continued strong new business and rebounding claim counts, it's looking like organic revenue growth of about 10% each quarter for the rest of '22.

On the next page, you'll see that our Risk Management segment posted adjusted EBITDAC margin of 17.3%. That was compressed by about 120 basis points due to an unusual late quarter litigation settlement. As Pat said, moving forward, we would expect margins for the remainder of '22 to be closer to 19%.

Moving to Page seven of the earnings release and the Corporate segment shortcut table. Most adjusted first quarter items were in line with our March IR Day estimates. Within the corporate line, we did also benefit from an FX remeasurement gain and a larger tax benefit related to employee stock option exercises given the strong performance of our stock late in the quarter. You also see a couple of non-GAAP adjustments. The first relates to transaction costs and professional fees associated with buying Willis Re. And the second was a state tax benefit related to the revaluation of our deferred income tax balances.

All right. Let's now go to the CFO commentary document. Page three has our typical brokerage and risk management modeling helpers. We've updated our outlook for integration, I'll get to that more in a minute. We've updated FX, and you'll see a slight tick-up in our expected Brokerage segment tax rate, call it 0.5 percentage point. In addition, the amortization lines in both brokerage and risk management are now highlighted in yellow. This means the item is now being treated as a non-GAAP adjustment. If you missed our March IR Day, we did a vignette on this change and how we're reporting adjusted EPS. This is the first quarter reporting under that revised method.

On Page four of the CFO commentary, that's our corporate segment outlook. You'll see there is no change in our outlook for second, third and fourth quarters. When you turn to Page five to Clean Energy, the purpose of this page is to highlight that we have over $1 billion of credit carryforwards, and we are now in the cash-harvesting era of these investments. There's no GAAP earnings anymore other than a little bit of overhead expense but rather now substantial cash flows. You'll see in the pinkish column that the 22 cash flow increase should be substantial. We should be able to harvest $125 million to $150 million a year of cash flows and perhaps more in '23 and beyond, at that rate, a really nice seven-year cash flow sweetener. And there still is a possibility of an extension in the law, so we remain well positioned to restart production if that happens.

Okay, flipping to Page six of the CFO commentary document. Top table is the rollover revenue table. Recall that we update this each earnings release day and also each quarter during our late quarter IR meetings. The next box, highlighted in yellow, is the math behind the $0.06 impact of consensus versus our March guidance that I touched on in my opening. Then at the bottom table is an update on our December reinsurance acquisition. Revenue this quarter was $337 million, and EBITDAC was $172 million. The very small difference to the numbers we provided during our March IR Day reflects two items: first, the quarterly timing related to further refinement in our ASC 606 accounting for both revenue and expense; and second, some further movement in FX rates.

In the end, if you go all the way back to our original August '21 projections, there is very little change to our first year of ownership expectations other than a small impact from Russia, Ukraine and FX. As for integration, the good news is that our original estimate of around a total of $250 million for integration charges through the end of 2020 is holding close. The even better news is we're making progress at a faster pace than we originally thought. Integration efforts around people, real estate, back-office transition services, etc., are targeted to be mostly done by late '22 versus mid- to late '23 as originally planned. When it comes to technology rebuilds, we think most of it will be done by the end of '23 or early '24. So what that means is that we will see integration costs lumped more into '22 and '23, then spreading deep into '24. You'll see the bump-up of our '22 quarterly integration estimates back on Page three of the CFO commentary, but it's important to remember, it isn't changing our in-total view.

So that continues to be a really good story. As for cash, capital management and future M&A, at March 31, available cash on hand was about $450 million and no outstanding borrowing on our line of credit. With strong operating cash flows expected in '22 and a nice bump in cash flow from our clean energy investments, we are extremely well positioned to fund future tuck-in M&A using cash and debt. We continue to see our M&A capacity at more than $4 billion through the end of '23 without using any stock. So those are my comments. We're off to a great start in '22. From my vantage point as CFO, we're positioned for another great year. A huge thank you to the entire Gallagher team for another terrific quarter. Back to you, Pat.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Thank you, Doug. Darryl, I think we're ready to open up for questions, please.

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Operator

Thank you. The call is now open for questions. [Operator Instructions] Our first questions come from the line of Paul Newsome with Piper Sandler. Please proceed with your question.

Paul Newsome
Analyst at Piper Sandler Companies

Good morning. Good afternoon. Congratulations on the quarter.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Thanks, Paul.

Paul Newsome
Analyst at Piper Sandler Companies

I was going to ask about the guidance for organic growth is at a decelerating pace. Maybe you could talk about sort of the factors that go into what might be decelerating prospectively from a macro basis that's having an effect on your business.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

So listen, I think we posted 9.6% this quarter, and I think that we're guiding upper 8% to 9%. I wouldn't call that a deceleration. I think that there's a reality, looking towards where we were in third and fourth quarter, as the compares get a little more difficult to have. But I don't know if I'd use the word deceleration, but I think it's pretty close.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Well, in fact, Paul, we looked at the stats before this call, and over the last eight quarters, the renewal rates across our book, including, I should add, the exposure units are about flat, around 8.5% to 9%. So I mean it varies up to 9%, 9.5%, it comes down to it. But I would say any kind of a wholesale drop-off is not what we're seeing, to Doug's point.

Paul Newsome
Analyst at Piper Sandler Companies

My second question is to interest rates. We're finally seeing some rising interest rates. I was wondering what your thoughts are on how that affects your earnings as well as, frankly, M&A. I wonder if we're seeing any change in the competitive environment for M&A with interest rates changing as well. So I guess that's sneaking in essentially two questions.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Let me take the investment income for our fiduciary funds that we keep on hand. We would think that a one point rise in interest rates would be about another $40 million a year of investment income versus what we've been showing so far. That might tick up a little bit more as we get reinsurance completely rolled into our books. In terms of what that means in terms of other pressures inside of our organization, we're just not all that sensitive to interest rates internally in our operating model.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

But we do know, Paul, I mean let's face it, a lot of the competition from our private equity competitors for acquisitions has been driven by free money. And if they got to start paying for it I think that bodes well for us.

Paul Newsome
Analyst at Piper Sandler Companies

That makes sense. You haven't seen that -- I see this as too soon with interest rate can...

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Cash, no, we haven't seen anything.

Paul Newsome
Analyst at Piper Sandler Companies

Thanks, guys. Appreciate the help.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Thanks, Paul.

Operator

Thank you. Our next question is come from the line of Mark Hughes with Truist. Please proceed with your question.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Hey, Mark.

Mark Hughes
Analyst at Truist Financial

Yes, hello, Pat. Good afternoon. Could you give the margin in brokerage, if you back out the Willis Re, I suppose you've given us the inputs, but do you have that handy, Doug?

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

I can dig it out here for you here in a second.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

We've got it at the table somewhere, Mark, do you have another question?

Mark Hughes
Analyst at Truist Financial

Yes. Pat, you talked about the risk management being helped by an uptick in GL property, workers' comp claims. Anything you see in either GL or comp that influences your view of what's going to happen in terms of the cycle, if, in fact, courts are opening and you're seeing a pickup in GL. Does that tell you anything?

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

There's two things I'd comment on, Mark, really. One is it's been in very interesting hard market. And as you know, looking over the past, what is now almost four years, comp hasn't moved. Comp has not been a big rate driver up and it's not coming down. So it's been an interesting line. And as the economy becomes more robust. And frankly, when we pick up -- when we start to fill some of those 11 million jobs, I think the natural increase in claim activity is going to really benefit Gallagher Bassett. We clearly can track back that when our economy is humming, it's just a natural outcome. You don't like to see people get hurt, but we have more claim volume. That's number one.

Number two, what I continue to be astounded by, and I'm sure everybody on this call reads it every week as well, when I look at our social inflation around tort, it's incredible. And so I think what you're seeing is, number one, case settlements at levels that never any of us would have predicted but also what that does is it drives our clients to be much more cautious and concerned about claims that, frankly, in the past, they might have said, "Pay us $50,000, move on" or "Let's not settle that. It doesn't look like that big a deal." I mean not to get anecdotal on you all, but it is late in the evening.

And you probably saw the settlement last week for some guy who got $450,000 because this company threw a surprise party for him. I mean I keep asking the folks for a surprise party. But it's just -- so that I do think is beneficial to GB. And GB continues to invest and I think capable of proving that if, in fact, you use our services, with all that we bring to the table, our outcomes are better. So all of a sudden, if you're used to getting a lot of claims, but one of them every five years tends to pop. And now you're looking at it, you go, "Man, what's happening? I'm starting to get two a year, three a year." Now who pays those claims makes a bigger and bigger difference. And I think that bodes well for the long term.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Mark, I can give you the answer on the -- if you have a follow-up with that, then I'll come back to that.

Mark Hughes
Analyst at Truist Financial

Okay. I was just going to ask on the June one reinsurance renewals, so what kind of rate increases are you seeing, how much dislocation is there in the cat property.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Really not that much dislocation on the reinsurance side. And I would say, back to my prepared remarks, depending on the carrier, depending on the carriers experience. That's what's driving the renewals. And Doug, go ahead.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Yes. On the margin, Mark, we're somewhere around high 37% margins in the brokerage business without Willis Re. And there is some variability around that because of allocations between the units, right? Second of all, I just think that in the context of margin, as you're looking at what's changed since last year. This quarter, I know that we're ahead on our bonus accrual relative to where we were last year because we started off with considerably better organic growth. So that has a little bit of a margin compression impact, but I would consider that timing. We are in the first quarter.

And recall, we give our raises out mid-year, so raise impact rolling in versus first quarter. As organic develops throughout the year, you grow into your raises and then when it comes back to cost returning into the business. So if you break it down, let's say that expenses year-over-year on an apples-to-apples basis are $25 million up, $10 million of that's bonus. You probably can call it $6 million is raise impact and then you get down to about $8 million left over.

That's probably -- take 1/3 of that and call it increased professional fees that we're spending, 1/3 of that would be T&E travel and 1/3 of that would be client entertainment. So when you look at the pieces of being up, let's say, $25 million of expenses year-over-year, the way we look at it, call it, $10 million of it's timing and $15 million is spread between raises that we'll work ourselves into for the year and then the other piece of it, T&E, entertainment and some professional fees. Does that help?

Mark Hughes
Analyst at Truist Financial

Yes. I appreciate the detail.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Sure. Yes. And let me throw in too is that we're -- I went back while you were doing that. I looked at in first quarter of 2019, we posted 35%. And this is where the supplement really helps so that we post, not the CFO commentary but the five-year supplement we put out there, we posted 35.6% EBITDAC margin in first quarter of '19. And this quarter in the Brokerage segment, we're at 39.8% so we're up 420 basis points. If we hit our target this year of being up 10 to 20 basis points for full year, we'd be up 540 basis points over 2019.

So it's 180 basis points of margin expansion a year over the last three years, each year, 180 basis points. And truly, our reinsurance business is rolling in. While seasonally a little better this quarter, when you put full year and it's not all that different than our combined brokerage operation margins. So the margin story we believe is pretty darn good. And when we're running somewhere around 34 points of margin for full year, if we hit our targets this year, that's pretty darn good versus the 28 and change in 2019.

Mark Hughes
Analyst at Truist Financial

Appreciate it.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Thanks, Mark.

Operator

Thank you. Our next questions come from the line of Greg Peters with Raymond James. Please proceed with your questions.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Hey, Greg.

Greg Peters
Analyst at Raymond James

Good afternoon. Hey, good afternoon, everyone. I can say listening to your comments, Pat, that I'm sure a number of us, myself included, would take a piece of the action on your surprise party. Keep us in mind. So I guess from a macro perspective, I'm going to comment -- Paul tried to ask a question, I'm going to come at it from a different way. I know you've mapped out a pretty robust outlook for the remainder of the year. There are a number of economists and other reports out there that are speculating about the potential oncoming over a recession. And obviously, the data is not showing it yet, at least your data isn't. But I'm just curious from an enterprise risk management perspective. When you think about that type of risk, what are you doing at the corporate level to prepare for something like that, if you think that might be in the cards?

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Well, first of all, Greg, I'm not going to sit here and predict a recession. Unfortunately, we've lived through them before. And I think we do know how to react to those. And when you're in a recession, a couple of things happen that are very, very negative. Exposure units drop, companies go broke, expenses become even more important, not that they're ever not important, and shopping can go up. Now when shopping goes up for our strength, in particular, in the middle market, I think we show well. So we hold our own there. But when you've got a robust economy falling off, you end up with negative audits and you've got lesser exposure units.

And depending on the depth of that recession, it's not a pretty picture. So when you talk about what are we doing relative to our risk management approach, we talk about it every quarter. We take a look at where we are. We've got significant margins, and we prepare to say here's what we have to do to make sure that -- one of the things I really like about our model is we basically pay our production for us on how their book of business performs. So we're all in this together and if the business is sinking. Now in previous recessions, if I don't go back too far, we've not had the benefit of inflation. So inflation may, in fact, help cause a recession, and I don't know whether that will be one point, two points. I know the first quarter GDP was down.

But if you're talking 5% to 8% inflation, that has the exact opposite impact. As you know, payrolls go up. We're all seeing that. I mean, I can't go a day without somebody stopping me and saying, "We're getting whacked. I've got a mid-level service person, and it's a problem and what am I going to do about it?" And every customer is coming to Bill's or Bell's team and saying, how am I going to hold on to my people. Everybody wants them. They go to a restaurant, they don't have people that can serve you. I mean there's just huge demand, and that's pushing payrolls up. And our contractors book, they bid everything out and now they got to deliver at inflation rates they never anticipated when they made the bid. Well, if there's other business to bid, those rates are going up. So sales will go up. So there's offsetting factors there. And I think our business holds up pretty darn well in a recession.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Yes, so a couple of things. We look at daily endorsements, cancellations, audits, we get that as a daily feed. And this was the biggest month of positive audits that we've seen. And again, that's historical. That's a rearview mirror metric, but I'm not seeing that trail off at all. So I'm not seeing any early signs of a recession to happen because the first thing a customer will do is they'll ring up the phone and they'll adjust their expected payrolls down. So we're not seeing that. We're not seeing it in our exposure unit and our rate monitoring the deal. We look at renewals every day also.

So we're just not seeing it happen. But what we've proven throughout the COVID is that we've got a pretty resilient model. that we have a lot of levers to pull should we get into a situation where growth becomes more difficult. And I think that we've proven we can do that. So we think the model is resilient. We think that inflation is going to help us on the top line when it comes to revenues for the business that's there. But we do have levers that we can pull in order to help us get through a recession.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

And also, let me remind you, back in 2007, '08, '09, and this is just an incredible support of this model again. You'd think, people before they stopped paying their insurance bill. That's how important we are to them. That's a good spot to be.

Greg Peters
Analyst at Raymond James

Indeed. Thanks for the color on that. Pivot to perhaps a little bit more detailed question. And Doug, your guidance and commentary on the various parts in your CFO commentary quite helpful. And I guess what I wanted to ask about was the free cash flow, excluding clean energy because you talked about the integration expense and some other things. I'm just wondering what you think the cadence of that looks like now for '22. Has there been a change versus previous expectations? And how you would suggest we look at that?

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Let's see if I can break it down. Let's start with $4 billion that we have left over for M&A in '22 and '23. Cash -- clean energy provides $250 million of that. Integration is already net in that number, right? So I've already given you a number net of integration. Also, when we talk about integration, you've got to look at it as half of it being noncash and half of it being cash. You recall that integration expenses are the sign-up bonuses that we delivered and mostly equity plans, so that's amortizing as a noncash item against that. So I would say that integration won't consume an excessive amount of cash. I would say that the clean energy -- maybe you think about it this way, the clean energy basically offsets the cash portion of that. And all that is all washed out in our $4 billion expectation for M&A over the -- during '22 and '23. Does that help you give a thought on it?

Greg Peters
Analyst at Raymond James

It does. I know you've given me similar answers like that in the past. It feels like that should be your voice mail, but thanks for reminding me of all that little pieces there.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Listen, it generates a lot of cash. It's like I say around here, I don't make the money, I just count it and there's a lot of it coming in.

Greg Peters
Analyst at Raymond James

Got it. Thanks guys for the answers.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Thanks, Greg.

Operator

Thank you. [Operator Instructions] Our next questions come from the line of Elyse Greenspan with Wells Fargo. Please proceed with your question.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Hi, Elyse.

Elyse Greenspan
Analyst at Wells Fargo & Company

Hi, thanks. Good evening. Maybe my first question is kind of going back to the earlier discussion on organic. Pat, when you gave us the initial outlook for 2022, you had said that the full year would be about 1% above the Q1. So is it just that the -- and I think that was maybe based off of the benefits business perhaps being a little lighter and heavier in concentration in the Q1. But is there something that changed? Or is there just -- I understand that the rest of the year outlook is close to the Q1. Is there something that perhaps caused that view to change? Or is it just that just as simple as the Q1 being better than you expected when you made that comment?

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

I'll let Doug answer the actual number piece on that because a lot of that's mathematical. But in terms of what I'm seeing for the year, I'm not seeing -- I'm not anticipating significant change in the operating environment over the next three quarters.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Yes. I think that our cautious guidance in January and then again in March really was talking about the fact that we're not getting rate lift from workers' comp, which is heavier in the first quarter. And then also, you're not really seeing rate and benefits yet [Indecipherable] inflation that's coming back fast and furious. And I think that give us another quarter on that, and we might become a little bit more bullish because I think that -- and of course, that will eventually translate into workers' comp too, absent of any frequency declining or holding in there. But I think our cautiousness on the benefits business might have been overly cautious. But again, we just need to see another quarter of that before we get into a position of declaring that there's true medical inflation that's going to affect next year's growth, too. But I don't see it as a headwind. I see it as a tailwind to our organic.

Elyse Greenspan
Analyst at Wells Fargo & Company

Great. And then my second question, you guys have mentioned having around $4 billion of capital over the next couple of years to spend on M&A. The tuck-ins, right, were just around $30 million this quarter, so maybe a little bit light relative to some historical averages. So as we think about just kind of deal flows, it sounds like interest rates could impact private equity interest, so maybe that helps with the pipeline. Is there a certain point and maybe we have to wait until next year where if deals don't materialize since that's a pretty high level of capital, Gallagher might consider using some buybacks as well with the excess capital?

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

I think an answer to that is -- yes, let's clarify. I think that first quarter is already seasonally the smallest when it comes to M&A. It's historically been that five out of the last six years. So I think there's just a natural little push towards year-end and then there's a little pause in the first quarter. So I think there could be a rebound in opportunities through the rest of the year. If those rebounds don't materialize and we're not seeing opportunities for it, then our next place that we would go is to make sure that our debt is clearly within an a solid investment-grade rating and then use it for stock buyback next and then maybe even consideration on the dividend. So those are the three or four things that we're seeing: how's deal flow look, next thing is what do we do with the excess cash as the deal flow isn't there, and we'll stack that up to controlling the debt, for sure, then making sure that we're positioned well to buy back stock or do dividend increases.

Elyse Greenspan
Analyst at Wells Fargo & Company

Okay. And one last one on Willis Re. I recognize the revenue was close to what you guys had laid out at the Investor Day. Can you give us a sense of just client retention and new business and how that's been trending in your first full quarter of owning the business?

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Yes, I will do that, Lisa. It's really been an amazing -- and let's remember, as we finished the quarter, we're four months in. So as we have this call, we're close to five months. But I will tell you that the team, we are not losing people, we are not losing clients. Our renewals have been fantastic. Tom, myself, others at the table have had a chance to meet with reinsurance clients. They continue to be [Indecipherable]. There's not one less competitor in the marketplace. They're also very clear with us that the reason that the business held together over the years of discussion as to where this business was going to land was because of the people handling their business. And those people are still in place. Our losses in terms of people out the door are minimal to zero.

And so when I look at it, I'm really, really happy about it. And new business pipeline is strong. What I'm very excited about is the integration that we're seeing or the sharing of information from our retail. Everybody said at the beginning, why is this good for retail. And people also would ask, well, why does reinsurance care what you're doing as a retailer? Well, I'll tell you what. There is so much going back and forth right now in terms of data relative to the business we're doing with all kinds of carriers, with things that our reinsurance people are seeing can help our retailers and they're melding. So the business is strong. We're absolutely nailing it when it comes to what we hope the performer would be -- and I think it's going to continue to be a great business for us.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Yes, I can give you some numbers behind that flavor is that -- and I'll give it to you is net new. Our net new was over 5% this quarter, if you control for those people that put on a different jersey before we bought it. And our overall organic is nicely, let's call it, 8% first quarter plus or minus a point. So organic, really I got to give it to the team for what they went through for three years for them to be out there battling the way to have holding their clients, writing new business, terrific story. So when you're posting organic nicely in that upper single digits after what they've been through, I couldn't be more pleased with the team.

Elyse Greenspan
Analyst at Wells Fargo & Company

Thanks for all the color.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Thanks, Elyse.

Operator

Thank you. Our next questions come from the line of David Motemaden with Evercore. Please proceed with your questions.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Hi, David.

David Motemaden
Analyst at Evercore ISI

Hi, good evening. How is it going guys?

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Great.

David Motemaden
Analyst at Evercore ISI

So great to hear the outlook on organic in the Brokerage segment, but obviously still keeping the 10 to 20 basis points full year margin expansion outlook I guess I'm wondering, it definitely sounds like it's a bit more positive on the organic growth side. So I guess I'm wondering why I guess we're not expecting -- or why you guys aren't expecting more margin improvement than the 10 to 20 basis points. Is it additional investments that you're making? Is it the bonus accruals? Is it something in addition, I think you had called out $60 million of incremental costs coming back in this year. Is that higher now that sort of keeps it at 10 to 20 basis points of margin expansion?

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Yes. I think that we're just a little reluctant right now to push that up when it really comes down to it. I think that there's a lot of things that we'd really like to do. And I'll segue into some of the exciting stuff. When you look at what's going on with -- and you listen to our March, our late quarter IR Day. We talk about all the great things we're doing in the business. When you look at what's going on with our electronic delivery platform, when you're looking at the automation that we're doing that we're writing 6,000 policies a month with hardly anybody involved on cyber, the Gallagher Drive, the Advantage program, the smart market. And then you look at the average [Indecipherable] advertising systems.

We're spending money on hardening the environment and delivering more point-of-sale capabilities to the sales force. When you look at all those things, posting another 200 basis of margin expansion on top of already posting 540 basis points of expansion since 2019. I think we'd just like to spend a little money this year. When you get to 2023 as a lot of this levelizes between the pandemic and between -- and the roll-in of the reinsurance M&A. You might see a little bit more expansion in that if we're still posting in that 9% range. But right now, this is a great opportunity for us to invest in the future organic growth of the company. So that's where we are on it. You want to call that voluntary spend, call it, voluntary spend, but it's not must spend.

David Motemaden
Analyst at Evercore ISI

No, no, it makes sense. No, that makes sense. And I guess just maybe it sounded like the international business did quite well in the first quarter. So I guess I'm wondering, Pat, just specifically, could you just talk about what you're seeing on the ground in Europe and in the U.K., if there's any sign of any wobbles there in terms of exposure growth or demand as I think some of the leading indicators are pointing towards economic slowdown there.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Well, let me go around the world again as I did in my prepared remarks. So if you take a look at what we're seeing in Canada. And it's -- our team in terms of new business is on fire. When we closed on Neuraxis years ago and the Canadian economy was a little flush where it was a little slow. We weren't together. Neuroaxis has seven separate businesses kind of operating separately. Now that business is totally together. The Gallagher branding is working extremely well. People are pumped up. We're using Salesforce. Our pipeline has grown and the 10% organic, yes, it's helped by rate, but new business is much better than it's ever been. When you go to the U.K., that same time frame, we added new -- recall, we bought Heath Lambert, Giles, etc. Again, a lot of time on integration.

Today, we'll do an acquisition of size in the U.K. And frankly, we've got that thing integrated in five to seven months. And they are putting on a Gallagher jersey. They're excited about it. Then our team just gets stronger and stronger there. Now I can't tell you that economic events aren't going to impact us. Recessions are terrible. Bad for our clients, they're bad for us, and they're bad for our business. But I'd tell you that where we are from a team perspective is fantastic. So you're right to look through the numbers and say it seems like international is doing really well because as we walked around the world and told you the organic, they're killing it everywhere.

Latin America is strong. New Zealand is strong. Australia is strong, and all of that is not just rate driven. That's the thing I want to make sure everybody realizes is that it's not just because rates are moving, we are getting our fair share of our new business opportunities. And in fact, we're seeing hit ratios improve and we're being helped by our clients' business expansions and just blocking and tackling. So it's a very good spot to be.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Yes. I can't predict the trickle-on effect. But remember, we're primarily in the U.K. We do have inflow from the rest of Europe. Not heavily based in by any means in Eastern Europe. So we don't have that. And I think at one point, we looked at -- and our inflows from Europe might have been in that $40 million range in total revenues. So if you think about it in the context of what it means to Gallagher, if all of Europe would stop sending any business to London, it's $50 million of lost revenue to us. And pushing $8 billion of revenue as a total organization, we'd feel it, but it wouldn't register at all.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

David, I think it's fair to say, too, what we've done in the United States in terms of the things you've seen in your SmartMarket, Gallagher Drive. Those things are impacting our new business with carriers our retention and clearly, our new business hit ratios using Smart Market, and we're taking those internationally now. So that was born and bred here in the U.S. But those are our products that are going to be available in Canada and the U.K. to start. And they're difference makers.

And really, remember, when we compete, and this is one of the things about again, kind of being in a lucky spot. 90% of the time when our people go out the door to compete, we're competing with somebody smaller. Say at 10%, 11%, 12% of the time, we're competing with folks that, frankly, can come to the table with the same type of resources or story. But every other time, when I talk to our sales force, I think we should win. We don't, obviously, but I think that's having an impact. Our people go out the door thinking they're going to win. I'll tell you that.

David Motemaden
Analyst at Evercore ISI

Yes, it definitely looks like you guys are getting your fair share of wins. And I know in the past, you've broken out the brokerage organic in terms of drivers by exposure, pricing and net new. I think in the past, you said it's about 1/3, 1/3, 1/3. Has that changed at all this quarter?

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Well, I think rates might be fueling that just a little bit more, but we probably need a little more time to peel that apart. We'll see if I can give you something, and get back together in June on that. But right now, rates probably used to be 1/3, 1/3, 1/3, and I think rates might be more 40% than, 30%, 30%, something like that.

David Motemaden
Analyst at Evercore ISI

Yes, okay. Great. Thank you.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Thanks, Dave.

Operator

Thank you. Our next questions come from the line of Meyer Shields with KBW. Please proceed with your question.

Meyer Shields
Analyst at KBW

Thanks, Hi, guys. I hope all is well. One, I guess, dumb question. When I look at Page three of the CFO commentary, it still anticipates a full year margin of 19% in risk management. Is that -- does that mean that we're going to unwind some of the first quarter underperformance? Or is that assuming -- is that based on like the 18.5.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

I think we'll be somewhere nicely in the 18% for full year. So I think that if we post three quarters of 19%, we'll claw back into that $17.3 million for this quarter. And again, we get an unusual legal settlement probably once every four, five years. So it's unfortunate it happened this quarter, but that business is really doing well.

Meyer Shields
Analyst at KBW

Okay. That's helpful. A second issue, and I know these are small numbers, but does the call it withdrawal from Russia on the reinsurance business, does that have any impact on the earn-out?

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Yes. I would technically have an impact. If we don't reach some of our milestones in it, that loss of $10 million over the course of the year, yes, that might have a -- it would have an impact on it.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

They're going to overdo that. That's not -- my prediction is it will not.

Meyer Shields
Analyst at KBW

Okay. Because of other businesses compensating?

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Correct.

Meyer Shields
Analyst at KBW

Okay. And then one final question on the reinsurance side. And Pat, you talked a lot about the fact that some of the people there were under some strain over the past couple of years. Did that depress what Willis Re was able to charge? Is there an opportunity for revenue growth now that simply because it's a more stable platform or you can invest in it more heavily?

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Well, I got to understand the question. I mean, our reinsurance clients pay us very, very, very well and very fairly and now a stable environment is not going to give us the ability to charge our clients. Does it give us the ability to invest more favorably? Absolutely, because you now have people and our old business is people. To be perfectly blunt, there were people who were going to join them before, like join them in the middle of a sale. Nobody knows -- by the way, remember, I'm not making this up, it was public. I mean they couldn't tell the people at Willis where they're going to sit, who are they going to work for. That's not easy to recruit into, is it?

Well, there's lots of opportunities to invest. There's lots of -- at the same time, reinsurance buyers are kind of frozen in the headlights. We want to see competition in the market. We don't want Willis, frankly, to disappear, but we're not going to build the problem bigger. So yes, there's opportunities for us to go back to those clients and say, "Hey, we think we've got something to tell you now." So I think once it settles down and we all get -- again, I'm four months into the quarter, five months in total, a year from now I'll have a much better feel for the individuals.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Thing I'll add to it, though, the thirst for information from our reinsurance partners is there. And if we can bring them the information that they're looking for that maybe they haven't been able to get in the past. I believe that, that will help them attract more new clients and perhaps broaden out the book of business they're doing with their existing clients. I do believe that our ability to provide real-time data like we do for our retail business to them, a compelling advantage for them in the marketplace.

Meyer Shields
Analyst at KBW

Okay. That was very helpful. Thank you so much.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Thanks, Meyer.

Operator

Thank you. Our final questions come from the line of Weston Bloomer with UBS. Please proceed with your questions.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Hi, Weston.

Weston Bloomer
Analyst at UBS Group

Hi, thanks for taking my questions. My first one is just a follow-up on the investments that you guys described around the systems and point of sales. I guess what's the pipeline and timing for that? Does that extend into 2023? And just curious because in 2023, can we go back to a world where the pre-pandemic commentary was we expand margins if organic is over 4%? Is that baseline potentially still the same? Or could it be lower given the higher investments that you're making? Recognizing that the 34% and 19% margins are still impressive, but curious how to think about that.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Well, one of the things I'd like to say about it is that we've been investing in these technologies all along the way. So we're talking about investing in another $3 million or $4 million or $5 million a quarter. I mean this is a smart market advantage, better Works360, all the things that we're doing, we're continuing to invest in them, and we really didn't slow that down much. It's the incremental spend on them to make them even better and more competitive. That's what we want to do. I mean if you looked at our GB go, I'm just talking in the risk management right now, what they can do to adjust a claim on your phone with you, track it, monitor it, help you get back to work, it's impressive.

So these are the type of enhancements that we have on [Indecipherable] better. Right now, RPS has 24 different products on their quote and buying system that's basically a no-touch system. They're doing 6,000 policies a month. What happens when we took that out to 48 policies? And our investment spend on that illustratively is about $2 million a year. But what if we get 48 different lines of cover on that and then go to 72 and then go to 100? It's -- those are the type of incremental investments that we'd like to make because I think they're powerful.

I say this all the time, what we're doing on the RPS automation side alone is a $1 billion business. And I think we'd like to do that across different things inside of the company. So where our margin is going to be in '23, we're going to -- I think that we're going to be over the return of expenses from the pandemic. The real question is how much are we going to spend on investment on that. But it would stand to reason that if we post at least 4% organic growth, there'll be opportunities to expand on that.

Weston Bloomer
Analyst at UBS Group

Yes. That's helpful color. And then my second question is a follow-up to Elyse's on M&A. I just want to clarify. Was all of the term sheet disclosure? Is all of that seasonal? Or is there any of that strategic around Willis Re? The reason I'm asking is I'm trying to frame the potential for maybe a pickup in that number in the second half as you analyze the deal.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

No, no. The numbers we were talking about in the pipeline in our prepared remarks, are totally outside of Willis Re. Willis Re done...

Weston Bloomer
Analyst at UBS Group

What I meant is, yes, is the pipeline potentially lighter as you focus on integrating Willis Re?

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

No. Our retail operations have zero distraction by the Willis Re folks.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

And actually, we're starting to see some small little boutique reinsurance opportunities pipe up on our DLC or any...

Weston Bloomer
Analyst at UBS Group

Okay. That's great to hear. Thank you.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Thanks, Weston.

Douglas K. Howell
Corporate Vice President, Chief Financial Officer at Arthur J. Gallagher & Co.

Thanks, Weston.

J. Patrick Gallagher, Jr.
Chairman of the Board, President and Chief Executive Officer at Arthur J. Gallagher & Co.

Darryl, I think that's all our questions for tonight. So I'd like to just say thank you again for joining us. Obviously, we had a fantastic start to 2022. I'd like to thank our colleagues around the globe for their hard work. We're a people business, and our results directly reflect our efforts. Thank you. We look forward to speaking with you again at our June Investor Day, and thanks for being with us, everybody.

Operator

[Operator Closing Remarks]

Corporate Executives
  • J. Patrick Gallagher, Jr.
    Chairman of the Board, President and Chief Executive Officer
  • Douglas K. Howell
    Corporate Vice President, Chief Financial Officer
Analysts

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