Arthur J. Gallagher (AJG.N) reported a 24.5% increase in fourth-quarter adjusted profit on Thursday, driven by higher commissions and fees amid sustained demand. The insurance broker benefited from resilient insurance spending, as businesses and individuals continue to prioritise coverage against financial risks, natural disasters, and other potential losses. Arthur J. Gallagher acts as an intermediary between clients and insurers, assisting customers in selecting policies that best suit their needs, rather than selling plans directly.
Commissions for Arthur J. Gallagher rose significantly, reaching $2.06 billion for the quarter compared to $1.50 billion in the previous year. Total fees also experienced substantial growth, climbing nearly 34.8% to $1.2 billion. The company reported adjusted net profit of $620 million, or $2.38 per share, for the three months ended December 31. This compares to $498 million, or $2.16 per share, for the same period a year earlier.
Arthur J. Gallagher is an insurance brokerage that acts as an intermediary between clients and insurers, guiding customers in selecting policies that best match their needs, rather than selling plans directly. Brokers generate revenue through commissions based on premiums, tying their performance closely to the insurance industry numbers. The results mirror trends seen in the sector, with peer Brown and Brown (BRO.N) also reporting higher quarterly adjusted profit earlier in the week, driven by increased commissions and fees. However, Brown and Brown reported a 2.8% fall in organic revenue.
