Arthur J. Gallagher & Co. (NYSE:AJG) used its quarterly investor meeting to reiterate its long-standing growth strategy, provide an update on insurance market conditions, and outline early organic growth expectations for the first quarter and full year 2026. Management also devoted significant time to describing how it is deploying artificial intelligence across brokerage, reinsurance, benefits, and third-party claims administration.
Strategy: organic growth, M&A, productivity, and culture
Chairman and CEO J. Patrick Gallagher, Jr. said the company’s value creation plan is built on four initiatives: organic growth, mergers and acquisitions, productivity and quality improvements, and maintaining Gallagher’s culture. He said the company does not plan to alter this approach and described Gallagher as a “two-pronged growth company” with “nearly limitless opportunities” given its low market share.
On acquisitions, management said Gallagher has acquired more than $6 billion of pro forma annualized revenues since the start of 2020. In 2025, the company completed 33 mergers representing more than $3.5 billion of estimated annualized revenue. Year-to-date, Gallagher completed seven mergers totaling about $60 million in pro forma annualized revenue and said it had a pipeline of nearly 40 potential mergers representing about $250 million of annualized revenue.
Insurance market conditions: property down, casualty up
From a global perspective, the CEO described the P&C market as “rational,” with carriers generating good returns supported by interest income and improving underwriting in personal lines and commercial property, partially offset by certain casualty classes. Through the first two months of the first quarter, he said global renewal premium changes (rate and exposure) increased in the low single digits, with property decreases more than offset by increases across most casualty classes.
He cited global renewal premium change details by line as follows: property down 7%, casualty up 5% (general liability up 3%, commercial auto up 3%, umbrella up 7%), package up 2%, D&O up about 1 point, workers’ comp up 1%, and personal lines up 4%. Management also noted a bifurcation by client size, with larger accounts seeing more property-driven downward pressure.
In reinsurance, management said strong 2025 results for reinsurers left capacity “plentiful.” Property and specialty reinsurance rates were described as decreasing in the teens, with top layers of towers seeing more pressure. Casualty reinsurance pricing was described as broadly stable, with reinsurers cautious on U.S.-focused casualty risks due to loss trends and development concerns.
Business unit updates and organic growth expectations
In the Americas P&C retail and specialty business, Mike Pesch said retail operations across the Americas totaled more than $4 billion of revenue as of the end of 2025, with U.S. retail P&C revenue over $3.6 billion in 2025. He said renewal premium change in U.S. retail was up about 2% so far in the first quarter, with property down 9% and most other lines positive. He also provided renewal data for Canada showing decreases of around 4% and U.S. wholesale renewal premium increases of around 1%.
Pesch said early indicators suggest first-quarter 2026 organic growth around the mid-single digits in both Americas retail P&C and specialty.
Internationally, Patrick Gallagher said the company’s large retail operations in the U.K., Australia, and New Zealand generated about $1.6 billion of revenue in 2025 and placed about $10 billion of premium. He reported renewal premium changes of around 4% in the U.K., about 2% in Australia, and down 3% in New Zealand. For London Specialty, he said renewals were flat to modestly lower for most lines, while aviation and marine risks in areas of conflict saw substantial premium increases. He said he expected both first-quarter and full-year 2026 organic growth in the mid-single digits for the combined U.K., Australia, New Zealand, and London specialty units.
Tom Gallagher said Gallagher Re finished 2025 with over $1.3 billion of revenue and delivered 14% organic growth in 2025, with a strong start in 2026. He said property reinsurance rates decreased in the teens at January 1 renewals and casualty pricing was stable with terms broadly unchanged. He added that early indications for April 1 renewals suggested similar conditions, with more downward pressure on Japan-specific renewals.
In benefits and HR consulting, Bill Ziebell said Gallagher Benefit Services generated about $2.6 billion of annual revenue at the end of 2025 and, with AssuredPartners, expects run-rate annualized revenue to exceed $3 billion this year. He said medical cost trends increased throughout 2025 and are expected to continue in 2026, with fully insured renewals showing high single digits to 10%+ increases and stop-loss premiums up in the mid-teens and sometimes above 20%. He said first-quarter organic growth was running in the mid-single digits, with full-year 2026 organic estimated at approximately 4%.
In third-party claims administration, Scott Hudson said Gallagher Bassett finished 2025 with $1.6 billion of revenue and closed well over 1 million P&C claims, paying out around $18 billion on behalf of clients. He said first-quarter 2026 organic growth was estimated around 9%, with full-year 2026 organic around 7%, and EBITDA margin expected in the 21%-22% range for both the quarter and the full year.
CFO Doug Howell said early indications point to global P&C units including reinsurance posting first-quarter organic growth “somewhere around 5%,” benefits around 4%, and combined brokerage segment organic around 4.5%, supporting a midpoint full-year brokerage organic growth outlook of 5.5%. The CEO reiterated a full-year 2026 organic outlook of 6% for the combined brokerage and risk management segments.
AI, technology spend, and financial implications
Management said the company is spending nearly $1.5 billion annually on technology-related initiatives, with Howell estimating roughly 10% of that amount tied to AI-related digitization, data feeding, and training. Howell said Gallagher has 40,000 employees using AI and is seeing about 1.6 million self-serve AI prompts per month.
Executives described AI use cases across units, including automating extraction of quote data, accelerating proposal and presentation creation, improving underwriting and placement workflows, and supporting claims operations. Howell cited operational examples, including reductions in time required for certain quote letters, benefits marketing spreadsheets, and loss-run summaries, and said AI is also helping draft real-time responses to time-sensitive claims emails in Gallagher Bassett.
Howell also discussed potential longer-term cost impacts, describing illustrative savings over a three- to five-year period across production, customer support, and back-office layers, while emphasizing the estimates were educated guesses. He said the company believes normal attrition could allow productivity gains without layoffs.
AssuredPartners integration, capital, and buybacks
Howell said the company continues to expect annualized run-rate synergies of $160 million by the end of 2026 and said it is moving up an estimate for early 2028 to about $300 million. He noted the synergy outlook does not include revenue or expense synergies in certain modeling tables and said the pace of converting locations to a common agency management system is a key gating factor for synergy realization.
On capital deployment, Howell said the company estimates close to $10 billion available over the next two years to fund M&A before using stock, based on cash on hand, expected free cash flow, and future investment-grade borrowings. He also said Gallagher ended 2025 with a $1.5 billion share repurchase authorization and has repurchased about $250 million in the first quarter. Howell added that S&P recently upgraded Gallagher to BBB+.
About Arthur J. Gallagher & Co. (NYSE:AJG)
Arthur J. Gallagher & Co is a global insurance brokerage and risk management firm headquartered in Rolling Meadows, Illinois. Founded in 1927 by Arthur J. Gallagher, the company has grown from a regional broker into an international professional services organization that arranges insurance, provides consulting and designs risk-transfer solutions for commercial, industrial, public sector and individual clients.
The company’s core activities include property and casualty insurance brokerage, employee benefits consulting and administration, and a range of risk management services.
