Gallagher Caps Strong 2025 with Record Growth, Eyes $10 Billion War Chest for Deals
Insurance Brokerage Giant Gallagher Reports Sustained Momentum, Outlines Aggressive Growth Strategy
ROLLING MEADOWS, Ill. – Arthur J. Gallagher & Co. (NYSE: AJG) closed its 2025 fiscal year on a high note, showcasing the strength of its dual-engine growth model that combines consistent organic expansion with a disciplined acquisition strategy. The global insurance brokerage and risk management firm reported over 30% revenue growth in the fourth quarter, marking its 23rd consecutive quarter of double-digit adjusted EBITDA growth.
On the earnings call, Chairman and CEO J. Patrick Gallagher, Jr. characterized the performance as "excellent," attributing success to the firm's balanced approach. "Our strategy is clear: grow from within and augment with strategic mergers. The integration of AssuredPartners is ahead of schedule and already contributing to our scale," Gallagher stated.
The brokerage segment saw revenue surge 38%, with a healthy 5% organic growth component. Meanwhile, the risk management arm, Gallagher Bassett, posted a 13% revenue increase, underpinned by 7% organic growth and strong client retention. For 2026, leadership reaffirmed guidance, expecting brokerage organic growth around 5.5% and risk management growth near 7%, with underlying margins continuing to expand.
Market Dynamics and Capital Deployment
Management provided a nuanced view of the current insurance pricing landscape, describing "cycles within the cycles." While property lines softened, casualty lines remained firm, with U.S. casualty rates up approximately 7%. CFO Doug Howell indicated the company is planning for casualty rate increases of 7-8% in 2026.
Perhaps the most striking revelation was the scale of Gallagher's planned capital deployment. Howell detailed that the company could have "close to $10 billion" available for mergers and acquisitions over the next two years, fueled by cash on hand, strong free cash flow, and investment-grade borrowing capacity. This war chest underscores Gallagher's intent to remain a dominant consolidator in the fragmented insurance brokerage industry.
The AssuredPartners integration remains a central focus, with expected synergies reaching $160 million annually by end-2026. All U.S. retail operations have already been rebranded under the Gallagher name.
Analyst and Industry Perspectives
The results and forward outlook have sparked discussion among industry watchers.
Michael Thorne, Portfolio Manager at Sterling Capital: "Gallagher's consistency is remarkable. The 23rd straight quarter of double-digit EBITDA growth isn't luck; it's a testament to a scalable model and superb execution. Their $10 billion M&A capacity is a clear market signal—they're not slowing down."
Rebecca Shaw, Insurance Analyst at Clearwater Research: "The 'cycles within cycles' commentary is key. It shows they're navigating micro-trends effectively. Their ability to expand margins in this environment, while digesting a major acquisition, speaks to operational discipline. The risk management segment's 7% organic growth is particularly impressive."
David Karr, Independent Financial Blogger: "Let's not just applaud the growth. Where's the scrutiny on these endless acquisitions? They're building a debt-fueled empire. 'Close to $10 billion' for more deals? This feels like growth for growth's sake. What happens when the music stops and interest rates bite or a major loss cycle hits? The market is pricing perfection."
Linda Chen, Risk Consultant at Eastwood Advisory: "The progress on AssuredPartners is reassuring for clients concerned about service disruption. Gallagher's emphasis on AI as a tool for advisors, not a replacement, aligns with what clients value—human judgment in complex risk transfer. Their stable producer retention rates support that narrative."
Founded in 1927, Arthur J. Gallagher & Co. has evolved from a regional broker into a global powerhouse, providing insurance, consulting, and risk management solutions worldwide.