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Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

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The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

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One of the largest insurance brokers in the world, the firm offers brokerage and risk management services to various clients.

This year's Fortune 500 marks the 66th running of the list.

F500 2020-429-Arthur J Gallagher

A Rolling Meadows, Ill.-based insurance brokerage, Arthur J. Gallagher has 33,300 employees.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Arthur J. Gallagher &amp; Co. is a global insurance brokerage, risk management, and consulting firm. The company provides customized property and casualty insurance, risk management, and consulting services to a wide range of clients worldwide. Founded in 1927, the company operates in 130 countries and territories.

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Arthur J. Gallagher (AJG): Company Profile, Stock Price, News, Rankings

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Arthur J. Gallagher

arthur j. gallagher

Good afternoon, welcome to Arthur J. Gallagher & Co.'s Q1 2026 earnings conference call. Participants have been placed on a listen-only mode. Your lines will be open for questions following the presentation. Today's call is being recorded. If you have any objections, you may disconnect at this time. Some of the comments made during this conference call, including answers given in response to questions, may constitute forward-looking statements within the meanings of the securities laws. Company does not assume any obligation to update information or forward-looking statements provided on this call.

These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the information concerning forward-looking statements and risk factors sections contained in the company's most recent 10-K, 10-Q, and 8-K filings for more details on such risks and uncertainties.

In addition, for reconciliation of the non-GAAP measures discussed on this call, as well as other information regarding these measures, please refer to the earnings release and other materials in the investor relations section of the company's website. It is now my pleasure to introduce J. Patrick Gallagher Jr., Chairman and CEO of Arthur J. Gallagher & Co. Mr. Gallagher, you may begin.

Thank you very much. Good afternoon, and thank you for joining us for our Q1 of 2026 earnings call. On the call with me today is Doug Hall, our CFO, and other members of the management team. We had a terrific Q1. For combined brokerage and risk management segments, our two-pronged revenue growth strategy, growing both organically and through acquisitions, delivered revenue growth of 28% in the Q1. Organic growth was 5%, and M&A contributed 23%, driven by strong results from AssuredPartners.

On a segment basis, brokerage revenues were up 30%, of which organic was 5%. We saw strong growth across retail PC, wholesale, reinsurance, and benefits. Our risk management segment for Gallagher Bassett posted revenues up 14%, of which organic was 10%.

We saw excellent new business and strong client retention, and we continued to generate excellent profits. Our brokerage and risk management segments combined reported net earnings growth of 12% and adjusted EBITA growth of 18%. This quarter marks 24 consecutive quarters of double-digit adjusted EBITA growth. We had another quarter of solid underlying margin expansion, which Doug will break down for you in a few minutes. Today, I'll touch on all 4 of our strategic pillars: growing organically, growing through mergers and acquisitions, improving our productivity and quality, and our culture.

First, organic growth. Our client retention, new business win rates, and client business activity continue to be tailwinds. In today's environment, insurance rates are still contributing to organic growth, but to a lesser extent than over the last few years.

Carriers are continuing to behave rationally and looking to grow in lines and geographies where there's an acceptable return, yet remaining disciplined by seeking rate increases where needed to generate an appropriate underwriting profit. Good loss experience accounts can typically receive premium relief, while accounts with poor experience are seeing increases. Breaking this down by businesses. Within our global retail PC businesses, the Q1 of 2026 market environment is materially unchanged from the prior quarter.

Insurance renewal premium change, which includes both rate and exposure, continued to increase in the low single digits in the Q1, with property decreases more than offset by increases across most casualty classes. By product line, we saw the following in our global PC retail businesses. Property down 7%, with rate pressure most pronounced in cat exposed and larger risks. Professional lines, including D&O and cyber, up 2%.

Workers' comp up 2%. Personal lines up 4%. Package up 2%. Casualty lines, which includes general liability, commercial auto, and umbrella, up 4% overall. Excluding property, renewal premium changes increased 4% in the quarter, with higher increases in the U.S. versus international markets. We continue to see significant differences in renewal premiums by client size, with our larger accounts driving much of the downward pressure in premiums. Our customers are opting in and buying more coverage as their prices decrease, whereas over the last few years, they were opting out of coverage when their prices were increasing.

Within the U.S. excess and surplus market, we continue to see a bifurcated market. We're seeing sub-markets behaving differently after several years of a very strong, hard market. E&S property, particularly cat-exposed risks, is the most competitive area right now.

That reflects a pricing reset, not a demand issue. Policy counts and submissions remain healthy, and E&S continues to be the right solution for complex property risks. E&S casualty remains firm. Renewal premiums are up mid-single digits, capacity is disciplined, and demand is steady across general and excess liability, as well as umbrella. E&S professional lines are largely stable, with renewal premiums up low single digits and better underwriting discipline than in prior cycles.

The fastest growing part of E&S continues to come from emerging specialty risks, such as data centers and AI-related infrastructure, as well as other complex exposures. These risks don't fit well in the admitted markets and represent a structural multi-year growth opportunity for E&S. Moving to reinsurance. The market remains well-capitalized and renewal activity continues to reflect ample capacity.

In the Q1, we saw strong growth across lines and across geographies with another excellent quarter of new business overcoming rate headwinds. At the 1/1 renewals, we saw rate decreases across property and specialty lines, with lower layers holding up better than the top end of the reinsurance towers. Within casualty, pricing was broadly stable as most reinsurers remained cautious around U.S.-focused casualty risks given loss cost trends and prior year loss development.

Outside the United States, additional capacity put some downward pressure on pricing in selected markets. The 4/1 renewals showed similar conditions with a bit more downward pricing pressure on the Japan-specific renewals. Outside of Japan, we saw continued interest from carriers in managing earnings volatility and supporting growth through additional protection.

Geopolitical developments, including the conflict in the Middle East, are impacting specific coverages such as marine war and political violence and terror, though it's too early to assess any broader ultimate impact on reinsurance pricing. Today's dynamic market is ideal for our reinsurance team to demonstrate our expertise, product knowledge, and data-driven capabilities to ensure the best coverage for our clients. Turning to London specialty. Similar to U.S. E&S market, pressure continues in North American cat-exposed property while competition in D&O, professional lines, financial institutions, and cyber is moderating. War-related risks remain the clear exception.

Marine aviation and political violence exposures tied to active conflict zones are seeing significant repricing and more selective deployment of capacity. War cover remains available, but it requires careful structure and coordinated execution across markets.

Our teams across London, the U.S., and our international network are working closely together to secure capacity under current market terms and help our clients to navigate this rapidly changing environment. Moving to employee benefits, which continues to perform very well. We're seeing steady demand from employers across health, retirement, voluntary benefits, executive benefits, life, and HR solutions. Our clients are still actively hiring and remain focused on talent attraction and talent retention. There's more and more demand for our experts to provide creative solutions to help our clients control their escalating benefits costs, driven by general procedures, innovative medical treatments, and as well as prescription drugs. As clients compensate us based on our advice, advocacy, creative plan design, and cost management strategies, all of which support both demand and retention across our benefits business. Last but not least, Gallagher Bassett posted another strong growth quarter.

We continue to see strong new business and excellent client retention. The team is adding new products, new services, and embracing new technology, including AI and machine learning, to further improve the claims experience for our clients. Gallagher Bassett is positioned for a fantastic growth again in 2026. Next, let me provide you some comments on our view of the economy. The U.S. labor market continues to show strong demand for new workers, with the number of job openings still ahead of the number of people looking for work. Our daily revenue indications have historically been a terrific indicator of economic activity. Our proprietary data from audits, endorsements, and cancellations continues to show solid business activity through the Q1 and actually through yesterday.

This data shows that exposure units, such as revenues, payroll headcount, or trucks on the road, to name a few, are still in positive territory, and our clients' businesses are continuing to grow. To wrap up my thoughts on organic growth prospects, today property pricing is moderating. That's well understood. Property is only one part of our very large and very diverse portfolio. Casualty, benefits, reinsurance, and Gallagher Bassett are all strong, and that strength is broad-based across geographies, client sizes, and products. In addition, our client exposure growth is solid, our retention is stable, and we are seeing excellent new business wins, all positively contributing to our organic growth. The demand for our expertise continues to grow because clients value our advocacy, our analytics, and our ability to navigate complexity.

This gives us confidence in the durability of our results and provides further confidence in our 2026 full-year organic growth outlook of 6%. Shifting to our second strategic pillar, mergers and acquisitions. During the first quarter, we completed nine new tuck-in mergers representing around $60 million of estimated annualized revenue. Looking at our pipeline, we have over 40 term sheets signed or being prepared, representing around $400 million of annualized revenues. For those new partners joining us, I'd like to extend a very warm welcome to the Gallagher family of professionals. Good firms always have a choice, and it would be terrific if they chose to partner with Gallagher. For the AssuredPartners acquisition, we are following our proven integration playbook developed from doing over 750 mergers over the last 20 years. We are on plan without exception.

The cultural alignment has been exactly what we expected, a culture with a strong client-first mindset and a genuine excitement for leveraging our expertise, tools, and capabilities. We are eight months in, performance is terrific, and we are already better together. Let me move to our third strategic pillar to continuously improve our productivity and quality. We view AI, digitization, and automation as a continuation of that long-standing strategy. It builds on decades of work standardizing processes, centralizing our global data, and improving execution, all to help our people provide the very best advice and service to our clients. At our March 17th investor day, we spent considerable time discussing how we were already deploying AI across Gallagher. I invite you to listen to this webcast still on our website. Let me summarize a few key points from our March commentary.

We expect AI to be minimally disruptive when it comes to selling insurance, providing consulting services, and managing claims. Our business is advisory-led, complex, and relationship-driven. AI actually should accelerate our growth. AI enhances our ability to deliver faster, higher quality advice, and more tailored client solutions, improving our speed to market, win rates, retention, and provides better client experiences. Operational change is not new to Gallagher. For more than 2 decades, we've standardized processes and centralized our proprietary data across the company. That foundation allows us to deploy AI today across PC claims, reinsurance benefits, and mergers and acquisitions. Because we have embedded operational excellence into our DNA, we already have the brains and financial resources to quickly deploy AI. In our view, we're ahead, and that advantage compounds over time. AI is already deployed across many of our core platforms and workflows.

It helps our teams make better decisions and spend more time advising clients while continuing to raise productivity and quality. Finally, and most importantly, AI strengthens, not replaces, the broker and advisor model. AI is another tool that strengthens how we serve clients. It does not change the fundamental nature of our business. AI makes every single one of our professionals better at what they already do by amplifying our expertise, our data, and our market access. Let me wrap up by spending some time on our fourth strategic pillar, our culture. We are a growth culture company.

If you spend some time reading our mission statement and the 25 tenets of the Gallagher Way, you might come to realize that they are all really about supporting growth, but growing the right way, the collaborative way, the professional and respectful and ethical way, all the while holding ourselves accountable for execution and growing shareholder value. We are a long-term growth culture that recognizes we grow because of the relevance of our advice, our analytics, and our ability to navigate complexity, not because where we are in an insurance pricing cycle. We've proven we can grow through any cycle, and this one is no different. Culture is also allows us to scale. As we grow organically and through mergers, we don't change who we are.

Our culture promotes welcoming new colleagues into a model that emphasizes collaboration, entrepreneurship, and shared success, all supported by strong processes, data, and tools. Importantly, culture is what makes our investments in talent, technology, and AI work. Our people embrace change when it helps them better serve their clients, improve quality, and deliver stronger results. When we talk about Gallagher's performance, our culture isn't separate from the numbers, it's embedded in them. An excellent quarter behind us, a terrific future ahead of us. I'll stop now and turn it over to Doug to walk through the financial details. Doug?

All right. Thanks, Pat, and hello, everyone. Today, I'll spend about three minutes flipping page by page through our earnings release and give some quick highlights. I'll then spend about five minutes on the CFO Commentary document we post on our website, and then close with 1 minute on cash, M&A, and capital management. Overall, the punchlines you'll hear today, and you've probably already seen that in your review of our information, we are right in line and in many cases better than what we forecasted in our March IR day. Okay, let's go to the earnings release, page 1. Just step back for one  minute. Adjusted revenues, EBITAC, and EPS all up 30%.

You'll get to those percentages when you remove from prior year numbers $143 million, that's $0.41, of interest income we earned on the funds we are holding to buy AssuredPartners. You'll read that in the footnote at the bottom of this page. That's an amazing quarter and demonstrates our four strategic pillars are delivering terrific shareholder value. Moving next to page two, brokerage organic at 5%, right in line with our March IR day expectations. One call-out here, supplementals and contingents combined up nearly 10%. As you've seen in the past, there can be some geography between those two lines, especially in first quarter as we renegotiate contracts to start a new year. At the bottom of the page, you'll see we had a solid start to the year for our tuck-in M&A program.

Our two-pronged growth strategy combined, that's organic and M&A, posted 28% total revenue growth this quarter for our brokerage segment. That'd be 33% if you remove the $143 million of interest income on the AP funds. That's absolutely terrific. Moving to the top of page, moving to page three and the top of page four, as we discussed during our last few earnings and IR day calls, current quarter percentages at the bottom of these tables are not really all that helpful when compared to because prior year had that interest income from the AP funds I just highlighted. It really clouds comparability. I think it's better for me to defer comments on our margin until I get to page 7 of the CFO Commentary document.

When I do, you'll quickly see that our productivity and quality strategic pillar delivered strong underlying margin expansion this quarter, right in line with our March IR day forecast. Moving now to the bottom of page 4, an excellent quarter for our Risk Management segment, Gallagher Bassett. Organic at 10% and M&A added another 2.5 points, bringing total reported revenue up 14% and adjusted revenue up 13% for this segment. This too shows the power of our two-pronged growth strategies. Moving now to page 5. Risk Management showed continuous compensation and operating expense ratio improvement, leading to an adjusted EBITAC margin up 130 basis points. There is no noise in this segment from interest on funds held to buy AP.

It's very easy to see the excellent growth in our revenues, improvements in our productivity, and our growth in our adjusted EBITAC, all better than our IR day commentary and forecast. Flipping to page 6, the corporate segment adjusted results were in total pretty close to the midpoint of the range we provided during our March IR day, so there's no new news here. Last on page 7, about halfway down, you'll read we repurchased about 1.4 million shares for approximately $310 million this quarter. All right, let's leave the earnings release and go now to the CFO Commentary document. Starting on page 3, most items are very close to what we provided in March, so just double-check that these items are considered in your models. Going to page 4.

This is the new organic growth table we started providing last December. Here are the punchlines. First, we saw solid Q1 organic growth across each business and geography, with each posting organic at or above our March IR day commentary. Next, we've now added our Q2 outlook and see similar performance for each of our businesses. These percentages incorporate all the information Pat just provided, such as net new business wins, customer buying behaviors, rate, the rate environment, and the economic landscape. These are our midpoint best estimates roundup as of today. Third, same with our full year outlook, which has not changed from March. We post that 2026 will be another excellent year of organic growth. Moving to page 5, the investment income table. 3 comments here. First, our 2026 forecasts reflect current FX rates and changes in fiduciary cash balances.

Second, our forward estimates now assume one future 25 basis point rate cut in September. Third, this is a helpful table to show you a full historical view of the amount of interest income we earned on the funds we were holding to buy AP. It's a reminder as a heads-up when you build your model, second quarter had $144 million of interest earned, and then $76 million in the Q3 of 2025, which will again cause comparability noise throughout our results when we post our next two quarters results. Staying on page 5, it's shifting down to the rollover revenue table, which excludes AssuredPartners. 4 quick comments here. First, the first quarter 2026 subtotal of $126 million for brokerage came in pretty close to our March estimate.

Second, looking forward, the pinkish columns to the right include estimated 26 revenues for brokerage M&A closed through yesterday. Of course, you'll need to make a pick for future M&A also. Third, 1 modeling heads up to make sure you adjust your prior year revenues for the divestiture and other line before you apply your organic growth assumption. Fourth, you'll see the same information down below for our risk management segment. All right, let's move to page 6, information on AssuredPartners. A few comments here. They're mostly modeling helpers, and then I'll add some qualitative comments at the end. First, remember that forecasted numbers we provide in this table are at the midpoint of our estimates. As we convert locations onto our systems, there could be some small movements between quarters and some additional small netting like we saw last quarter.

Second, the footnote there reminds you that non-cash figures shown on this page, which reflect depreciation and earn out payable, are included within our estimates on page 3. Please don't double count. Third, this table does not include any revenue or expense synergies. Those would be incremental to the numbers you see here, and you would need to model them separately. The footnote says that we still see annualized run rate synergies of $160 million by the end of 2026, and then up to $300 million by early 2028. That said, more and more, I'm feeling there could be some additional upside to these numbers. Maybe I'll have an update during our June IR day.

Fourth, a reminder that you can use for modeling the second quarter 2026 column as is, but for third and fourth quarters, you should only add the delta between the pink numbers and the blue 2025 numbers. Fifth, as for financial performance, an excellent first quarter, which came in fairly close to our March IR day estimates. Only a few small changes to our outlook for the rest of the year also. Qualitatively, our clients are happy and client retention is excellent. The integration plan is tracking to our expectations. Our teams are energized and coming together. We're having some terrific new business wins, showing that we are indeed better together, and our employee and producer retention is strong, right at historical norms. All of this gives me confidence in our 2026 financial performance outlook.

Moving now to page 7, the brokerage segment margin bridge. Favorable comments continue to come in that this picture is worth a 1,000 words. It's very easy to see all the components that influence our margin change period over period. Lets you quickly dig out that our productivity and quality efforts are delivering underlying margin expansion. You'll see that on the second to the last line of the table. We had terrific expansion this quarter of 50 basis points. You'll see to the far right, we're still forecasting full year 40-60 basis points of underlying margin expansion. Both of those are right in line with what we had discussed during our March IR day.

Despite sounding like a broken record, worth another call-out that the first line of this table shows you the impact of investment income earned on the funds we held to buy AP. That's what will again cause the headline headache for the next 2 quarters. Thankfully, it should be an easier compare. All right, let's move to page 8, our corporate segment. You'll see that our adjusted first quarter, as well as our outlook for the rest of the year, are very close to what we presented in March. Just 2 call-outs here. The upper right box shows you the changes in FX, which cause the corporate line to bounce around a bit. Remember, these unrealized gains and losses are non-cash. Now, look at the lower right box. This is new and a bit of housekeeping here.

We removed the separate page that recapped our historical clean energy investment cash flows. This box tells the same story, just shorter. It shows you that we had $655 million of tax credit carryovers that we will use over the next few years. Second, it also shows you that we have about $11 billion of tax-deductible amortization expense, which we'll deduct in the future. Together, these two items are worth about $3.4 billion of cash tax savings, which gets you to the punchline we've added in this box. Our cash taxes paid will be around 10% of EBITI for the foreseeable future. You model that, you'll get close. All right. Finally, a few comments on cash, capital management, M&A funding.

When I look at available cash on hand, expected free cash flows, and future investment grade borrowings, over the next two years, we might have close to $10 billion to fund M&A before using any stock. Our M&A pipeline remains strong and is full of targets at attractive multiples, which we are seeing coming down a bit. Still creates an immediate shareholder value through nice arbitrage. I mentioned earlier that in the Q1, we repurchased approximately $310 million of our shares. We continue to believe our equity is woefully undervalued by the market, this repurchase was opportunistic. Our priorities really haven't changed. We'll continue to invest in organic growth.

We'll remain active in mergers and acquisitions, staying consistent in our approach and disciplined in our pricing, and we will deploy excess capital in a way that maximizes long-term shareholder value. Those are my comments. A great quarter to kick off what looks like could be another terrific year. Back to you, Pat.

Thanks, Doug. Operator, I think we're ready for some questions.

Thank you. With that, we will be conducting a question and answer session. Our first question comes from the line of Charles Lederer from BMO Capital Markets. Please proceed with your question.

Hey, good evening. Appreciate Pat's comments on the strength outside of property lines. Just looking at slide 4 of the CFO Commentary, can you expand on what your expectations for the higher organic growth in America's Retail in the Q2? I guess it's just a little surprising given the greater property mix in 2Q. Thanks.

The question you're asking about, if I look here in the second quarter, we believe there's 5% in our America's Retail brokerage segment. Is that what you're looking at?

Yeah. All right, fine. If you really look at what last year, what happened is Canada actually had a slightly smaller quarter in the second quarter last year. That's why it gets it closer to that 5% number as we're going forward here.

Can you talk a little bit more about whether the M&A environment has changed over the last two months and how much that's factoring into your buyback decisions? Can you share how much you've repurchased so far in 2Q? Thanks.

The question here is, let's under by that, we've been in a quiet period the entire second quarter, so we have not repurchased any shares thus far this quarter. As for the environment on M&A, multiples are coming down. We are seeing that. We're seeing that sellers are becoming a little bit more rational on that. First quarter is historically always our smallest quarter, you can't really read much into that. We typically have a wrap-up to the a little bit more to the end of the year. We'll, we'll show more in the later quarters.

Then finally, I think that when it comes to balancing M&A versus share repurchases, if there's a terrific opportunity out there right in the middle of the fairway that makes us better together that is a long-term buy, we still think there's value in that number over our shares. It's got to be at the right multiple in today's world.

Thank you. Our next question comes from the line of Elyse Greenspan from Wells Fargo. Please proceed with your question.

Hi. Hi. Thanks. good evening. My first question is on, the core commission and fee, organic growth on the 4% in the quarter. In your minds, does that represent a floor?

I'm sorry, does that mean? Lisa, I just didn't hear you. Say it again.

Yeah, like a floor to where you see the growth from here?

Yes. As we look out for the, At this point in time, as we said in our prepared remarks, as we look forward, we see a pretty good year coming at us.

My second question, right? You know, you guys obviously provide a lot of guidance and disclosure by line, right? It looks like organic growth, right, in brokerage, you know, you're looking, you know, 4.5% in the Q1, 5% you're looking for in the second quarter, and you left the guide for 5.5% for the full year. That does imply a pickup in the back half. Doug, I think last we spoke, you were just talking about incremental reinsurance demand as being somewhat of a driver there.

I mean, I know it's being a little nitpicky relative to, you know, half or maybe a point in the back half of the year, but is that still your expectation that that's what will drive improving organic growth in the second half of the year relative to Q1 and Q2?

Yeah. Let me give you a couple of reasons why. I think that we have a, you know, a really successful new business pipeline right now, and we're seeing that in reinsurance, retail, London specialty, and then really in our kind of captive business right now. We've also done a good job of getting in raises on our fee accounts, that's a little bit of a tailwind. I think that we were going to see some pretty strong growth in supplementals and contingents for the rest of the year. You've seen the numbers the carriers are posting. That should bode favorably for us.

I think there's just in general, we're seeing some pretty good success that pushed through a property market. Now, property sells off over the next 60 days in a big way. That's going to be a whole different discussion. It's in that 5% range. It's at plus or minus a little bit on that. I think we're in great shape.

This guidance assumes consistent property price declines relative to what you saw in the Q1?

Thank you. Our next question comes from the line of Dean Castillo from Wolfe Research. Please proceed with your question.

Hey, thanks. Just sticking on the organic growth real quick. Your full year estimate for the specialty in U.S. wholesale growth is 6%, which implies, you know, sort of a takeoff of organic in the back half of the year. I was sort of curious, you know, what are your expectations under, you know, because of the, you know, the pricing environment is obviously not great. Sort of your expectations as to why you think it will pick up. Thanks.

All right. The question is. Here's the thing, property is going to take its biggest toll in the second quarter. I think in the second half of the year. We've got a pretty good view on property right now. You know, we're a month into it right now. We'll see what happens in the May and June renewals. We've got a good eye towards that. For the rest of the year, we just don't have that much property stress.

Got it. My follow-up, I noticed in the CFO Commentary that the multiples that you list for tuck-in acquisitions, the lower end of that range came down a bit. I was curious maybe if you could add a bit more color of what you're seeing in the market on multiples and kind of why you think that is.

Yeah. That's just what we're seeing right now. I think the term sheets that we've got in the hopper are recognizing that the multiples are coming down a little bit. Yeah. Yeah, we did put that on page 3 of the CFO Commentary, and I made mention it in when I was wrapping up on cash. Yes, you're reading that the right way.

The why, look at our stock price. Our multiple's down. Pretty simple. We're not here to dilute our shareholders.

Thank you. Our next question comes from the line of David Motemaden from Evercore ISI. Please proceed with your question.

Hey, thanks. Just one question on the... I believe, Pat, you had talked about insurance rates still contributing to growth in the quarter, but just to a lesser extent. You guys, in the past, you guys have broken out some of the different components of organic between, you know, net new, and then, like, price and exposure growth. Just wondering if you could unpack that maybe within this quarter and how you're thinking about that within the outlook for the 5.5 for the full year.

Listen, I think the way to look at it right now is new business will exceed lost business. Customers will opt in, which will come through as rate and exposure growth, you know, as exposures grow. Our customers' business. Let's say it's a 6% year. We're probably in a period right now we're going to get net, net from rate 1.5%. When you think about new business forward thrust, we'll probably get 2.5%, then you're probably going to get exposure growth in there of another 1.5 points, something like that. I think that might add up. I'm not saying it's a third, a third, a third. I think that rate might be on the lowest end of that growth piece.

It's going to be net new business wins, and then our clients' exposure units growth and our clients opting in and buying more insurance. Rate will be what it is.

Got it. Thanks. Sorry about that. Just on the property pricing, maybe just thinking about, you know, the down 7 for this or the down 7 RPC. If that were to get down to like let's say down 10 or 11, how could you help sensitize the organic growth to that sort of RPC movement?

All right. I'd have to think about that here a second and do the mental math. It might put a point of strain overall for a full year on it, something like that. I mean, that might have to go to closer to 12 or 13%. It might almost have to be a double on that. Remember, a lot of our property also is done on a fee. I know some of our big property schedules, that mitigates that a little bit. That's why the impact of it, the floor completely falling out of it from what we can see right now, it may be a point for the full year. I mean.

Rates are approaching a pretty low level right now. In some instances, we're seeing rates approaching 2017 pricing. I don't think there's a structural big time jump further beyond that.

Again, just rates are 1 thing, but remember our revenues are based on exposures opting in.

... growing risk profiles. You know, the, you know, casualty is still tough. I know your question had about property, but it's not just rate for us. It is highly sensitive also to exposures which are growing right now.

Yep. Nope. Got it. Makes sense. Thank you.

Thank you. Our next question comes from the line of Meyer Shields with KBW. Please proceed with your question.

Hi, this is Jing on from Meyer. Thanks for taking my question.

My first question is on the E&S. You call out the data center and AI related infrastructure as the fastest growing part of the E&S market. Could you kind of help us size kind of like what percentage of the submission today is kind of related to that and going forward? Yeah.

All right. As a percentage, it's, you know, it's a very small item. It's not anecdotal, but it is also illustrative that the specialty market comes in 5 different type of buckets. You got to think about these as a headwind in that as a tailwind in that vertical that as these things, you know, come online, they're going tohave to go to the specialty and E&S market in order to get that cover. In terms of what we're doing on it, boy, we've got a terrific practice in that.

I think that the way we're coming together, the way we've got a bespoke model that brings the right experts for the various covers that go along with the data center is pretty remarkable.

Let's not get it wrong. I mean, there's great growth opportunities for us across the whole data center effort. As Doug said, the E&S market is responding to that. It takes world markets to complete those. It takes great expertise, which we have. As a % of the overall market, this is not earth shattering.

Okay. Got you. Very helpful. My second question is on kind of the Middle East conflict. I think you flagged a significant repricing and more selective capacity deployment in marine war, political violence, terror, et cetera. For Gallagher specifically, is this a net organic tailwind given your London specialty and reinsurance positioning?

Yes, it is. We've got to be very sensitive about that. First of all, just because well rates are there and the cover is available doesn't mean ships are sailing. You got a very big caution light on making sure the crews are safe, and shippers are not necessarily going to take the risk. The market is available. It takes a lot of skill and a lot of diligence to put these together. In the end, when they bind, yes, they're a net positive.

Got it. Just 1 quick follow-up. Does the capacity constraint clear, like, placement difficulties that limit your ability to capture that or?

Arthur J. Gallagher (AJG) Q1 2026 Earnings Call Transcript

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