Commercial insurance rate increases continue to outweigh decreases, despite falls in property insurance pricing, Arthur J. Gallagher & Co.’s top executive said Thursday.
The brokerage continues to see mid-to-high single-digit increases in premiums across several casualty lines, said J. Patrick Gallagher Jr., chairman and CEO, on a call with analysts discussing Gallagher’s third-quarter results.
Gallagher reported more than 20% revenue growth for the period, in which it closed its largest-ever acquisition.
Global property insurance renewal premiums fell 5% in the quarter, Mr. Gallagher said.
“I think the property market is going in a direction that makes some sense, given the fact that they’ve got good results,” he said.
Casualty rates were up 6% overall, with workers compensation up 1%, general liability 4%, commercial auto 5% and umbrella liability increased 8%, Mr. Gallagher said. U.S casualty lines are up 8%, he said.
Directors and officers liability rates were down 2%.
Gallagher reported $3.33 billion in revenue for the third quarter, a 20.2% increase over the same period last year. On an organic basis, which excludes the effects of acquisitions and foreign currency fluctuations, revenue rose 4.8%.
Gallagher closed six acquisitions in the third quarter, including the $13.8 billion acquisition of AssuredPartners, which closed in August.
In its core brokerage business, it reported $2.92 billion in revenue, a 22% increase. Risk management revenue, which includes its third-party administrator Gallagher Bassett, rose 8.8% to $402.1 million.
Net earnings fell 12.9% to $273.6 million for the quarter. Earnings before interest, taxes, depreciation, amortization and coronavirus rose 17.7% to $812.9 million.
