Gallagher reports revenue rise, sees AssuredPartners deal closing soon

Arthur J. Gallagher & Co. reported double-digit revenue growth in the second quarter and moved up the expected closing date of its proposed $13.45 billion purchase of rival AssuredPartners.

The deal, which was delayed pending an antitrust review, will likely close in the third quarter, Chairman and CEO J. Patrick Gallagher Jr. said on a call with analysts Thursday. Previously, the company said it expected a fourth-quarter close.

Gallagher reported $3.18 billion in second-quarter revenue, a 16.2% increase compared with the same period last year, including 5.4% organic growth in its brokerage and claims management business.

Its brokerage segment posted $2.79 billion in revenue for the quarter, up 17.2% and 5.3% on an organic basis, which excludes the effect of acquisitions and foreign currency fluctuations.

Rates changes on business Gallagher placed during the quarter varied by line, Mr. Gallagher said.

Property insurance rates decreased 7%. Casualty rates increased 8% overall, with the umbrella segment seeing the largest rise, at 11%, followed by commercial auto at 7%, general liability at 4% and workers compensation at 1%. Directors and officers liability rates dropped by 3%.

Gallagher’s risk management segment, which includes its third-party administrator, Gallagher Bassett Services, posted $391.9 million in revenue, up 9.3% and 6.2% on an organic basis.

Gallagher completed nine acquisitions in the quarter with approximately $290 million of estimated annualized revenue.

The company reported net earnings of $366.2 million, a 28.3% increase, as interest income surged.