Arthur J. Gallagher & Co.: SWOT Analysis & Company Profile by BusinessReview

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									Arthur J. Gallagher & Co.

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Arthur J. Gallagher & Co.: SWOT Analysis
& Company Profile


Reference code: BRFS166CP10-Q4

Published: Oct 2010




Business Review
John Carpenter House
7 Carmelite Street
London EC4Y 0BS
United Kingdom
Tel: +44 (0) 20 7936 6400
Fax: +44 (0) 20 7336 6813



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Arthur J. Gallagher & Co. - SWOT Profile                                            Page 1
Arthur J. Gallagher & Co.

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Arthur J. Gallagher & Co. - Company Overview

Arthur J. Gallagher & Co. (Gallagher) is an international insurance brokerage and risk management services company.
The company also provides insurance brokerage and third-party claims settlement and administration services. Gallagher
operates its brokerage operations through a network of more than 200 sales and service offices located throughout the
US and in fourteen countries abroad. Gallagher manages its third-party claims adjusting operations through a network of
110 offices across the US, the UK, Australia, New Zealand and Canada. It offers its services to commercial, industrial,
public entity, religious and not-for-profit entities. Gallagher does business through a network of correspondent insurance
brokers and consultants in more than 100 countries around the world. The company is headquartered in Itasca, Illinois,
the US.


Financial Performance

The company reported revenues of (U.S. Dollars) USD 1,729.30 million during the fiscal year ended December 2009, an
increase of 5.12% over 2008. The operating profit of the company was USD 211.10 million during the fiscal year 2009, an
increase of 29.03% over 2008. The net profit of the company was USD 128.60 million during the fiscal year 2009, an
increase of 66.36% over 2008.




Arthur J. Gallagher & Co. - Key Facts

Arthur J. Gallagher & Co., Key Facts

                                  The Gallagher Centre, Itasca,
                                  Illinois (IL), 60143-3141, United   Ticker Symbol, Stock
Corporate Address:                                                                               AJG (New York Stock Exchange)
                                                                      Exchange
                                  States


Telephone                         + 1 630 7733800                     No. of Employees           9,900



Fax                               + 1 630 2854000                     Financial Year End         December



URL                               www.ajg.com                         Revenue (in USD Million)   1,645.00



Industry                          Financial Services



Locations                         Australia, Singapore, United Kingdom, Canada, United States, Bermuda

Source: Annual Report, Company Website, Primary and Secondary Research




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Arthur J. Gallagher & Co. - SWOT Profile                                                                              Page 2
Arthur J. Gallagher & Co.

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Arthur J. Gallagher & Co. - Business Description

Arthur J. Gallagher & Co. (Gallagher) is an international insurance brokerage and risk management services company.
The company provides insurance brokerage and third-party claims settlement and administration services. It offers its
services to commercial, industrial, public entity, religious and not-for-profit entities.

The company operates its businesses through three reportable segments, namely, Brokerage segment, Risk
Management segment and Financial Services and Corporate segment.

The Brokerage segment includes various line of insurance coverage, which includes

aviation, disability, life, property, casualty, earthquake, marine, retirement solutions, commercial auto, errors & omissions,
medical, voluntary benefits, dental, fire, products liability, wind, directors & officers liability, general Liability, professional
liability and workers compensation. It operates through a network of over 200 sales and service in the US and in fourteen
countries abroad. Its activities are undertaken through a network of correspondent insurance brokers and consultants in
more than 100 countries worldwide. The segment includes Retail Insurance Brokerage Operations and Wholesale
Insurance Brokerage Operations. Gallagher’s retail brokerage operations negotiate and place property and casualty,
employer-provided health and welfare insurance and retirement solutions principally for middle-market commercial,
industrial, public entity, religious and not-for-profit entities. Its operations are spanned across 180 geographical profit
centers in the US, Australia and Canada and operate within certain key Niche/Practice Groups. During the fiscal year
2009, Retail Insurance Brokerage operations contributed 81% towards the company’s Brokerage Segment revenues.

Its wholesale brokerage operations assist Gallagher brokers and other unaffiliated brokers and agents in the placement of
specialized insurance programs. The principal source for Gallagher’s compensation for its retail brokerage services is
commissions paid by insurance companies, which are based upon both percentage of the premium paid by insured’s, and
brokerage and advisory fees paid directly by its clients. Gallagher receives a share of the commission paid to the retail
broker by the insurer for wholesale brokerage services. During the fiscal year 2009, wholesale brokerage operations
contributed 19% towards the company’s Brokerage Segment revenues. As of December 31, 2009, the company
generated 74% of its total revenue from Brokerage segment.

Under, the Risk Management segment, the company provides contract claim settlement and administration services for
enterprises that choose to self-insure some or all of their property and casualty coverages and for insurance companies
that choose to outsource some or all of their property and casualty claims departments. Gallagher generates revenues
from integrated disability management programs, information services, risk control consulting (loss control) services and
appraisal services, individually or in combination with arising claims. Risk management services are marketed directly to
Fortune 1000 companies, larger middle market companies, not-for-profit organizations and public entities on an
unbundled basis independent of Gallagher’s Brokerage operations. Gallagher manages its third-party claims adjusting
operations through a network of 110 offices located throughout the US, the UK, New Zealand and Canada. In fiscal 2009,
the segment generates approximately 69% of its revenues from workers compensation related claims, 27% from general
and commercial auto liability related claims and 4% from property related claims. As of December 31, 2009, the company
generated 26% of its total revenue from Risk Management segment.

The company through Financial Services and Corporate segment manages the company’s interests in tax-advantaged
and clean-energy investments, venture capital funds, and Gallagher’s equity ownership position in an alternative
investment fund manager. At December 31, 2008, significant remaining investments in this segment include Clean
Energy, Tax Advantaged Investments, Real Estate and Venture Capital and International Operations.

Geographically, its operations are organized into two segments: the US and Foreign (Australia, Bermuda, Canada and the
UK). For the period ended December 31, 2009, the US region contributed 89% towards the segments revenue, followed
by Foreign (11%).

Recently, the company announced that its subsidiary, Gallagher Bassett Services, Inc., completed the previously
announced agreement to acquire substantially all the third-party administrator (TPA) assets and managed care service
operations of GAB Robins North America, Inc.




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Arthur J. Gallagher & Co. - SWOT Profile                                                                                   Page 3
Arthur J. Gallagher & Co.

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Arthur J. Gallagher & Co. - Major Products and Services

AJG provide insurance brokerage and risk management services. The major services offered by the company include the
following:

Arthur J. Gallagher & Co., Major Products and Services
Services:

Property and Casualty:

Brokerage services

Alternative risk Appraisal services

Captive services

Catastrophe modeling

Claims advocacy

Claims management

Consulting

Cyber risk assessment

Environmental risk assessment

International risk management

Large account services

National risk management

Pooling Private client services

Risk control consulting

Safety compliance

Self-Insurance

Employee Benefit:

Actuarial services

Consulting and brokerage

Executive benefits

Corporate benefits

Human resource services

International benefits

Retirement plan services
Source: Annual Report, Company Website, Primary and Secondary Research




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Arthur J. Gallagher & Co. - SWOT Profile                                                                    Page 4
Arthur J. Gallagher & Co.

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Arthur J. Gallagher & Co. - History

Arthur J. Gallagher & Co., History

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