Gallagher's quarterly profit shrinks on hit from higher expenses
30/10/2025 22:13
Oct 30 (Reuters) - Insurance brokerage Arthur J. Gallagher AJG.N reported a nearly 13% fall in third-quarter profit on Thursday, as higher expenses offset a jump in commissions and fees. Shares of the Rolling Meadows, Illinois-based company fell 6.5% after the bell. A sharp jump in compensation, interest and operating expenses drove Gallagher's total expenses to $3.02 billion in the quarter, a nearly 26% jump from a year earlier. That overshadowed the higher commissions and fees Gallagher raked in from its brokerage business, as insurance spending continues to be strong. The insurance industry is typically resilient even during a broader economic slowdown or changes in discretionary spending, as individuals and businesses look to mitigate risk against climate-related disasters and cyber threats. "Global insurance renewal premium changes remain in positive territory and we are not seeing indications of economic slowdown," CEO J. Patrick Gallagher, Jr. said in a statement. Gallagher's commissions jumped 24% to $1.91 billion in the quarter, while total fees surged nearly 12% to $1.06 billion from a year earlier. In August, Gallagher finalized its $13.45 billion acquisition of insurance broker AssuredPartners, strengthening its retail middle-market property and casualty and employee benefits focus across the United States. Insurance brokerages act as intermediaries between insurers and customers, helping clients choose policies that best suit their coverage needs. They generally pocket a percentage of the premiums paid to insurers as commissions. The company's net earnings attributable to controlling interests fell to $272.7 million, or $1.04 per share, in three months ended September 30, from $312.6 million, or $1.39 per share, a year earlier. Gallagher's shares fell 7.7% this year as of last close, underperforming the benchmark S&P 500 index .SPX. (Reporting by Anuj T and Arasu Kannagi Basil in Bengaluru; Editing by Maju Samuel) ((ArasuKannagi.Basil@thomsonreuters.com))