stockrowWhat it does
Arthur J. Gallagher & Co. is an insurance broker, reinsurance broker, consultant and third-party property/casualty claims administrator. Founded in 1927 and headquartered in Itasca, it is led by Chairman and Chief Executive Officer J. Patrick Gallagher, Jr.
Its brokers and consultants help companies, public bodies, nonprofit organizations and individuals buy insurance, arrange reinsurance, manage risks and run employee-benefit programs. In plain English, it connects clients seeking protection against losses with insurance companies and other risk-taking providers that supply the capital for those losses. It generally does not keep the underwriting risk itself.
The brokerage business places commercial property/casualty coverage, health and welfare coverage, employee benefits and specialized insurance. It also advises on risk of loss, alternative risk-transfer arrangements such as captives, and employer-sponsored benefit programs. Gallagher Re helps insurers and other underwriting enterprises buy reinsurance, which is insurance that protects an insurer against specified risks or classes of risks; it also provides analytics and selected capital-markets services.
Its Risk Management segment, operating through Gallagher Bassett, administers claims, settles claims under client instruction, provides loss-control services and offers risk-management consulting. These services are used by organizations that self-insure or outsource claims work rather than use an insurer’s internal claims operation. The company had 72,000 employees at December 31, 2025.
How it makes money
Gallagher’s main revenue sources are brokerage commissions, fees, supplemental and contingent revenues, interest income, premium-finance income and other brokerage income. Risk Management primarily earns fees, including performance-based fees. Commission revenue generally moves with the insurance premiums clients pay, while fee arrangements can be negotiated instead of commissions.
The company reports Brokerage, Risk Management and Corporate segments. Brokerage generated $12.2 billion in FY2025, or 87.4% of revenue, and Risk Management generated $1.7 billion, or 12.5%. Corporate generated $1.0 million and mainly records debt, external acquisition expenses, other corporate costs, foreign-currency remeasurement and clean-energy investments rather than a material operating revenue stream. FY2025: Brokerage revenue was $12.2 billion and Risk Management revenue was $1.7 billion; Q2 2026: combined Brokerage and Risk Management revenue growth was 24% and organic growth was 6%.
Within Brokerage, domestic retail insurance brokerage represented 75% of segment revenue in 2025, Gallagher Re represented 12%, and wholesale brokerage represented 13%. Retail brokers arrange many commercial insurance and benefits lines for clients. Wholesale brokers help affiliated and non-affiliated brokers place specialized or difficult risks; more than 75% of wholesale revenue comes from non-affiliated brokerage clients. Gallagher Re earns fees and commissions for placing reinsurance and providing related analytics and capital-markets services.
Revenue and related client-service costs can vary by quarter because insurance contracts become effective at different times. Salaries, employee benefits, rent, depreciation and amortization tend to be more even through the year. Acquisitions, and gains or losses on books of business, also affect quarterly trends.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Brokerage | $12.2 billion | 87.4% | 22.7% |
| Risk Management | $1.7 billion | 12.5% | 8.97% |
| Corporate | $1.0 million | 0.01% | −93.8% |
Customers and how it sells
Gallagher’s clients include commercial, industrial, nonprofit, religious and public-sector organizations, plus insurance and reinsurance companies and other underwriting enterprises. Its retail brokerage operation also serves individuals to a lesser extent. The Risk Management business markets independently to Fortune 1000 companies, larger middle-market companies, nonprofit organizations, public-sector entities, insurers and captives.
The client base is diversified: its largest client represented approximately 1% of combined Brokerage and Risk Management revenue in 2025, while its ten largest clients together represented approximately 3%. Approximately 95% of Risk Management revenue comes from clients not affiliated with its Brokerage operations, including underwriting enterprises and clients of other brokers.
The company serves clients through more than 650 U.S. sales and service offices, approximately 400 offices in about 60 countries, and correspondent brokers and consultants. Those direct operations and correspondents provide coverage and service capabilities in approximately 130 countries. Brokerage and Risk Management revenue was concentrated in the United States at $9.4 billion, or 67.4%, in FY2025. The United Kingdom generated $2.5 billion, or 17.8%, while Australia generated $586.0 million, Canada $395.0 million and New Zealand $207.0 million.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| United States | $9.4 billion | 67.4% | 26.4% |
| United Kingdom | $2.5 billion | 17.8% | 11.3% |
| Other foreign | $886.0 million | 6.35% | 26.4% |
| Australia | $586.0 million | 4.20% | 1.91% |
| Canada | $395.0 million | 2.83% | −5.05% |
| New Zealand | $207.0 million | 1.48% | −1.43% |
Suppliers and costs
Insurance companies, reinsurance companies and other risk-taking entities provide the capital that covers insured losses arranged through Gallagher. The company calls these parties underwriting enterprises and does not own or control them. It also relies on cloud-storage and cloud-computing application services supported, upgraded and maintained by third-party vendors for parts of its claims-administration operations.
The business is service- and people-intensive rather than manufacturing-intensive. Compensation expense was $6,660 million in Brokerage and $974 million in Risk Management in 2025, representing 55% and 61% of the respective segment revenues. Other recurring expenses include rent, depreciation and amortization. Acquisition integration can add redundant-workforce costs, retention-bonus amortization, duplicate services, extra lease space and external information-technology assimilation costs.
The company also incurs the cost of operating across jurisdictions, including compliance staffing, policies, controls and employee training. Its capital requirements have historically included acquisitions, technology and software-development projects, investments, dividends and share repurchases.
- Revenue$13.9B
- Cost of revenue−$7.8B
- Other operating costs−$3.6B
- Operating income$2.5B
Competitive position
Gallagher competes in insurance and reinsurance brokerage, consulting and third-party claims administration. The company identifies competition from brokers and other intermediaries, insurance and reinsurance carriers that sell directly, banks, consulting and accounting firms, technology companies, global and regional claims administrators, insurer-owned claims administrators and legal firms in certain jurisdictions. It does not name individual competing companies.
The company describes service quality, personalized attention, employee and corporate expertise, data analytics, technology, client cost efficiencies and capabilities across insurance, reinsurance, alternative risk transfer, benefits consulting and claims management as factors in its competitive position. Its Gallagher Drive offering provides data analysis and benchmarking for insurance decisions, while SmartMarket provides carriers with preference-setting, risk-identification and performance-data capabilities. Gallagher Bassett uses data, AI and machine learning in claims work.
Our reading: Gallagher’s broad office network, specialist teams and range of brokerage, reinsurance and claims capabilities are a meaningful source of competitive differentiation because they address client needs across multiple insurance activities. [item1]
Our reading: The data, analytics and workflow tools are a developing moat, supported by their use in insurance decisions, carrier risk identification and claims administration, but competitors can also invest in technology. [item1; call_prepared]
Our reading: Claims-administration scale supports service delivery, yet insurers and large self-insured clients can build in-house capabilities, including with AI. [item1; item1a]
Growth opportunities
Gallagher expects retail brokerage growth over the next several years to come from niche and practice groups, middle-market accounts, cross-selling to existing clients, acquisitions and alternative-market mechanisms such as captives, rent-a-captives and deductible plans. It expects Gallagher Re to grow by adding underwriting-enterprise clients, deepening existing relationships, developing products, expanding facultative capabilities and making acquisitions. Risk Management expects growth from program business, outsourced insurer claims departments, Fortune 1000 companies, larger middle-market companies, captives and acquisitions.
Acquisitions remain a central growth method. The company completed approximately 780 acquisitions from January 1, 2002 through December 31, 2025, mostly smaller regional or local brokerages, agencies and employee-benefit consulting operations. During Q2 2026, it completed seven tuck-in acquisitions representing around $63.0 million of estimated annualized revenue. Management said its pipeline included over 30 signed or prepared term sheets representing around $500 million of annualized revenue.
Management expects 2026 full-year organic growth of 6%, comprising 5.5% for Brokerage and 9% for Risk Management. Management also expects property pricing to moderate, while citing new business, retention, client exposure growth and demand from construction, infrastructure, energy and data centers. The company sizes the global insurance premium market at $7.00 trillion and says it touches $200 billion to $250 billion of premium. Management sees approximately $100.0 million of revenue opportunity over three years from greater internal trading with AssuredPartners.
- $8.2BFY2021
- $8.6BFY2022
- $10.1BFY2023
- $11.6BFY2024
- $13.9BFY2025
Structural risks
-
Insurance pricing cycles can affect brokerage commissions. A soft market can put downward pressure on commission revenue, and clients may reduce coverage or raise deductibles when premiums rise.
-
Underwriting enterprises may reduce commission rates, sell insurance directly to insureds or face new capital and competitive conditions that lower premiums and commissions.
-
The claims-administration business depends on claims volumes, client outsourcing decisions and the availability of its risk-management information system and third-party cloud services. Insurers and large self-insured entities may develop in-house servicing capabilities, including through AI.
-
The company handles sensitive personal, health and financial information. Cybersecurity attacks, security breaches at its systems or vendors, and failures of data privacy, AI or third-party-administrator compliance could bring regulatory scrutiny, legal liability and reputational harm.
-
Operating internationally creates exposure to conflicting regulations, geopolitical and economic instability, protectionism, foreign-operating challenges and the cost of maintaining compliance across jurisdictions.
-
Wage inflation, talent retention challenges, technology costs, acquisition-integration expenses and less favorable claims-administration contract terms can pressure costs or margins.
Bottom line
Our reading
Our reading: Gallagher is an intermediary and services business built around insurance placement, reinsurance advice and outsourced claims administration, rather than taking insurers’ underwriting losses onto its own balance sheet. [item1; item7]
Our reading: Brokerage supplies most revenue, while the company’s office network, specialist practices, analytics and acquisition program support its reach across client types and geographies. [item1; call_prepared]
Our reading: Its results remain exposed to premium-rate cycles, commission pressure, integration demands, claims-outsourcing trends and technology, privacy and regulatory requirements. [item1a; item7]