By Michael Loney

May 2 - (The Insurer) - Arthur J Gallagher’s reinsurance, wholesale and specialty businesses’ organic growth accelerated sequentially to 13% in the first quarter, including 20% organic growth at Gallagher Re and 8% from the wholesale and specialty businesses.

After markets closed on Thursday, Gallagher reported combined brokerage and risk management revenue growth of 14% and organic growth of 9%.

New York-listed Gallagher’s share price was up 3.2% as of 10:30 a.m. ET on Friday compared to the $317.64 closing price on Thursday.

On an investor call on Thursday, chairman and CEO Pat Gallagher said that the brokerage segment’s organic growth of 9.5% included about 1 point of favorable timing but was in line with expectations even without that.

“Within our retail P/C operations, we delivered 5% organic overall. U.S. organic was north of 5%, while our international operations, primarily in the UK, Canada, Australia and New Zealand, were closer to 4%,” he said.

The global employee benefit brokerage and consulting business posted organic growth of more than 7%.

The reinsurance, wholesale and specialty businesses produced organic growth of 13%. This was up sequentially from 9% in Q4.

Q1 2025 included 20% organic growth from Gallagher Re and 8% from the wholesale and specialty businesses.

“So we continue to report strong growth across retail P/C, wholesale, reinsurance and benefits,” Pat Gallagher said.

Pat Gallagher said that reinsurance first quarter dynamics, which are mostly influenced by January 1 renewals, reflected an environment that generally favored reinsurance buyers.

“Overall, reinsurers were able to meet increased client demand with sufficient capacity, while remaining disciplined on terms. The Gallagher Re team shined with excellent retention and some fantastic new business wins,” he said.

Pat Gallagher continued: “April renewals experienced similar trading conditions as earlier in the year, and as expected, saw a bit more downward pricing pressure.”

When asked about the reinsurance organic growth, Gallagher said “the reinsurance folks are just on fire”.

“Our new business spread was responsible for more than half the organic this quarter. In fact, we had about 15 new client wins with more than $1 million each. These are big chunky deals,” he said.

Pat Gallagher continued that increased renewal premiums from carrier growth was another 5% of the reinsurance organic growth. “As you see some rates come down, people have some room for additional cover,” he said.

The executive said the global property casualty insurance market continues to behave rationally with carriers looking to grow in lines and geographies where there's an acceptable return, and seeking rate increases where it's needed to generate an appropriate underwriting profit.

Gallagher saw first quarter global renewal premium changes of property down 2%, D&O down 3%, workers' compensation up 5%, personal lines up 8%, and casualty lines up 8% overall including general liability up 5%, commercial auto up 6% and umbrella up 11%.

Gallagher completed 11 new mergers in the quarter with approximately $100 million of estimated annualized revenue.

This was followed in early April by the completion of the acquisition of Woodruff Sawyer, adding more than $250 million of estimated annual revenue.

Pat Gallagher said that the company has 40 term sheets signed or being prepared, representing more than $450 million of annualized revenue.

Gallagher in December announced the $13.45 billion acquisition of AssuredPartners. In March, it received a request for additional information as part of the Hart-Scott-Rodino filing.

“We are working to respond to the second request. And we still expect to close in the second half of 2025,” Pat Gallagher said.

Also on the call, chief financial officer Douglas Howell said the brokerage segment organic growth of 9.5% “helps bolster our view that full year organic will be in that 6% to 8% range,” with 6% to 7% organic growth in the second quarter.