Arthur J. Gallagher (AJG) Investor Meeting summary

Strategic overview and growth drivers

• Four-pillar strategy: organic growth, M&A, productivity/quality improvement, and culture remain unchanged, driving consistent outperformance versus industry benchmarks.

• Global footprint spans 130 countries, with strong positions in insurance, reinsurance, human capital, and claims management.

• Insurance market is large and growing, with $7 trillion in annual premiums globally and significant fragmentation supporting ongoing M&A.

• Technology, data, and AI are being leveraged for productivity, margin expansion, and client value.

• Culture is a key differentiator, supporting sales, teamwork, and client focus.

Segment performance and market conditions

• U.S. and Canadian retail: Q3 organic growth expected at ~5% (U.S.) and low single digits (Canada); renewal premiums up 6% in U.S., 3% in Canada.

• International retail and London specialty: Q3 organic growth expected at 7-8%; strong new business and retention, with pricing increases across geographies.

• Wholesale (RPS): Q3 organic growth projected at 8-9%; E&S market remains robust, with double-digit submission increases and improved client retention.

• Reinsurance: Upper single-digit organic growth in Q3; market remains stable with adequate capacity, but casualty terms are tightening.

• Employee benefits/HR consulting: Q3 organic growth at 3-4%, with strong demand for cost management solutions amid rising medical and pharmacy trends.

• Risk management (Gallagher Bassett): Q3 organic growth at 7%, full-year near 9%; strong client retention, new business, and claim count growth.

Financial outlook and capital management

• Full-year 2024 brokerage organic growth expected at ~7.5%, risk management segment near 9%.

• Double-digit total revenue growth targeted, combining organic and 5-7% M&A growth.

• Brokerage segment margin expansion of 60 basis points expected for 2024, with Q3 and Q4 margin expansion in the 90-100 basis point range.

• Available cash of $1 billion and $3.5 billion earmarked for M&A in 2024, with a strong pipeline of 100 deals totaling $1.4 billion in revenue.

• Tax credit carryforwards to provide additional cash flow benefits in 2024 and beyond; balance as of June 30, 2024, is $805.1 million.