Commercial insurance rates continued to rise in the second quarter, and average increases have accelerated so far in the third quarter, senior executives at Arthur J. Gallagher & Co. said Thursday as the brokerage reported its financial results.
Rising rates contributed to Gallagher’s higher revenue, which was up more than 13% in the second quarter from the year-earlier period.
Average renewal rates were up about 5% in the quarter, said J. Patrick Gallagher Jr., chairman and CEO, on an earnings call with analysts.
“Renewal premium increases continue to be broad-based, up across all of our major geographies and most product lines,” Mr. Gallagher said.
Umbrella and auto liability renewal premiums rose 8% to 10%, general liability rates were up 5% to 7%, property rates increased 2% to 4%, and workers compensation rates were up 1% to 3%, he said. Cyber renewals were flat and directors and officers liability rates were down 5%.
July renewal rates increased more than in the second quarter, said Douglas K. Howell, chief financial officer.
“With an active hurricane season predicted and noise around U.S. casualty reserves growing louder again this quarter, it’s not unreasonable to expect mid-single-digit or greater renewal premium changes in the second half of 2024,” he said.
Gallagher reported $2.74 billion in revenue for the second quarter, a 13.7% increase over the same period last year. On an organic basis, which excludes the effect of acquisitions and foreign currency fluctuations, revenue increased 7.7%.
For its core brokerage business, Gallagher reported $2.38 billion in revenue, up 13.8%, and for its risk management segment, which includes its third-party administrator unit Gallagher Bassett Insurance Services Inc., it reported $358.6 million in revenue, up 12.6%.
Gallagher reported net earnings of $285.4 million for the quarter, a 21% increase over the 2023 period.
The company completed 12 acquisitions, with approximately $72 million of estimated annualized revenue, during the quarter.
