Gallagher Reports a Loss Amid Increased Revenue
Insurance brokerage Arthur J. Gallagher & Co. reported $1.23 billion in revenue in the first three quarters of 2008, a 1.6% increase over the same nine-month period of 2007, but the company's profits through Sept. 30 of this year declined to $72.6 million—a 37% drop from the same period in 2007.
Profits were $115.4 million for the first nine months of 2007.
The drop in part in net earnings comes from $27.1 million in losses associated with discontinued operations, according to the Itasca, Ill.-based firm's third-quarter earnings release. In February, the firm sold its London-based reinsurance intermediary, Gallagher Re, to Aon Re Global, a division of Chicago-based Aon Corp., and in the third quarter closed its Irish wholesale brokerage operation after dropping efforts to sell it.
"We are satisfied with our third-quarter brokerage segment results given the soft market conditions seen in the (third) quarter," J. Patrick Gallagher Jr., the firm’s chairman, president and chief executive officer, said in a statement. "Despite an increase in catastrophes and financial turmoil impacting the banking and insurance sectors, we continued to see pricing decreases throughout the third quarter. It is too early in the fourth quarter for us to see any meaningful change in carrier pricing behavior."
Published on October 30, 2008
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