What Arthur J. Gallagher & Co. (AJG) Said on Its Q3 Earnings Call

Key Points

• Strong Q3 performance: Combined brokerage and risk management revenue rose 18% year over year, with 5% organic growth, while net earnings and adjusted EBITDAC each increased 25%. Brokerage and risk management margins also expanded.
• AssuredPartners integration is progressing: The acquisition generated $285 million of Q3 adjusted EBITDAC, while Gallagher reiterated synergy targets of $160 million by the end of 2026 and $325 million by early 2028.
• Growth and capital deployment remain priorities: Gallagher reaffirmed approximately 6% full-year 2026 organic growth, completed 21 acquisitions through the first nine months, and repurchased about $580 million of shares year to date despite softer property pricing and slower industry M&A activity.

Arthur J. Gallagher & Co. NYSE: AJG reported third-quarter 2026 growth across its brokerage and risk management operations, with management citing new business, client retention, acquisitions and productivity initiatives as key drivers despite a more competitive property insurance market.

Chairman and CEO J. Patrick Gallagher Jr. said combined brokerage and risk management revenue increased 18% from a year earlier, while organic growth was 5%. Net earnings and adjusted EBITDAC each increased 25%, extending the company’s streak of double-digit adjusted EBITDAC growth to 26 consecutive quarters.

“Our team delivered strong revenue growth and excellent profitability,” Gallagher said. “Our strategy is working, our team is executing, and the opportunities ahead of Gallagher have never been greater.”

Segment Performance and Insurance Market Conditions

Brokerage revenue rose 19%, including 5% organic growth, supported by retail property and casualty, wholesale, reinsurance and other businesses. Gallagher Bassett, the company’s risk management unit, posted 14% revenue growth and 10% organic growth, driven by new business and retention.

Chief Financial Officer Doug Howell said brokerage adjusted EBITDA margin reached 35.3% during the quarter, an increase of 200 basis points from a year earlier. Risk management adjusted EBITDA increased 17%, with margin rising 90 basis points to 22.8%.

Management said insurance pricing remains mixed. Property insurance renewal premiums declined 6% in the third quarter, compared with a 10% decline in the prior quarter, though Gallagher said the sequential change principally reflected renewal mix and seasonality rather than a broad market shift.

Other commercial insurance lines remained firmer. Casualty renewal premiums increased 4%, professional lines increased 2%, workers’ compensation rose 1%, personal lines increased 3%, and package business also rose 3%. Excluding property, renewal premium changes increased 3% overall, according to the company.

Gallagher said rates account for about one percentage point of current brokerage organic growth, while new business, retention, client exposure growth and the breadth of the company’s offerings are larger contributors. The company expects that approximate one-point contribution from rates to persist in 2027, assuming broadly similar market conditions.

Management emphasized that premium changes do not directly translate into revenue changes. As property pricing eases, clients may use savings to add coverage, raise limits, improve program structures or reduce deductibles, Gallagher said.

“Property pricing is moderating, and that is well understood,” Gallagher said. “But property is only one part of our very large and very diverse business.”

AssuredPartners Integration and Margin Outlook

Gallagher said the AssuredPartners acquisition, completed more than a year ago, continues to meet its expectations. The acquired business produced $285 million of adjusted EBITDAC during the third quarter, in line with the company’s earlier estimate.

All AssuredPartners back-office systems are now integrated and operating, Howell said. By year-end, close to half of the acquired company’s revenue is expected to be operating on its designated agency management system.

The company reiterated its expectation for $160 million of annualized run-rate synergies by the end of 2026, rising to $325 million by early 2028. Howell said the larger synergy figure remains principally expense-related rather than a revised revenue synergy target.

AssuredPartners contributed 310 basis points of brokerage margin expansion during the quarter, including 220 basis points from pre-synergy effects and 90 basis points from realized synergies, according to Howell. The company expects additional margin improvement from further AssuredPartners synergies, expanded use of its Centers of Excellence, technology, automation and artificial intelligence initiatives.

For 2027, management said AssuredPartners’ lower organic growth rate could reduce reported companywide organic growth by roughly 40 to 50 basis points. However, Gallagher and Howell said they expect the acquired producers to benefit over time from Gallagher’s tools, capabilities and specialized offerings.

2026 Outlook, M&A Activity and Capital Deployment

Gallagher reaffirmed its outlook for approximately 6% full-year 2026 organic growth in its combined brokerage and risk management segments. Brokerage organic growth is expected to be around 5% in the fourth quarter and for the full year, while Gallagher Bassett is expected to deliver roughly 9% organic growth for the year.

Management said early planning suggests 2027 organic growth for legacy brokerage could resemble 2026 levels, while Gallagher Bassett’s momentum could also continue into next year.

The company completed five tuck-in acquisitions during the third quarter, representing about $100 million of estimated annualized revenue. Through the first nine months of 2026, it completed 21 acquisitions representing approximately $225 million of estimated annualized revenue.

Its acquisition pipeline included more than 30 signed or pending term sheets representing about $300 million of annualized revenue. Gallagher said it remains disciplined on strategic fit, culture, valuation and expected returns, while acknowledging that broader insurance brokerage M&A activity has slowed as valuation multiples have declined.

Howell said the company estimates it has more than $12 billion of acquisition capacity over the next two years, based on cash on hand, expected free cash flow, tax benefits and future investment-grade borrowings. The company also repurchased approximately 400,000 shares for about $100 million during the third quarter, bringing year-to-date share repurchases through Sept. 30 to approximately $580 million.

Productivity, Client Demand and 2027 Milestone

Gallagher said its 20,000-person Centers of Excellence and ongoing investments in standardized workflows, data, digital systems, automation and AI are intended to reduce repetitive work, improve service quality and support margins.

Management also pointed to positive daily indicators from client insurance activity, including audits, endorsements and cancellations, as evidence of steady underlying business activity and exposure growth. Howell said the company has seen a positive trend in those measures over recent quarters, particularly among middle-market clients.

Gallagher said the excess and surplus insurance market remains an important channel for clients and has not seen meaningful movement of its renewal business back to admitted carriers. The company also cited continued opportunities in complex risks including construction, infrastructure, energy, data centers, artificial intelligence, aviation, marine and political violence.

Looking ahead, Gallagher noted that 2027 will mark the company’s 100th anniversary. “We got here because our colleagues, year after year, did the right thing for clients and for each other,” he said.

About Arthur J. Gallagher & Co. (NYSE:AJG)

Arthur J. Gallagher & Co is a global insurance brokerage, risk management and consulting company. The firm helps businesses, public entities and individuals identify, manage and transfer risk through insurance and related services.

Its operations include retail insurance brokerage, employee benefits consulting, wholesale brokerage, reinsurance brokerage, claims administration and risk management consulting. Gallagher places commercial and personal insurance coverage and provides services related to property and casualty risks, health care, benefits, and other specialized insurance needs.

Founded in 1927 by Arthur J.

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