Overall, insurance brokers had solid earnings results in Q3 2024. Management teams continued to be positive around growth for 2024 and into 2025.
Quick look: Organic growth rates
Organic growth figures reported in Q3 2024 were generally comparable to those seen in Q2 2024. Most brokers reported organic growth rates in a range of 5%-14%.
- Marsh & McLennan Companies, Inc.’s (MMC) Q3 2024 organic growth was 5%, compared to 6% Q2 2024, and 9% Q1 2024.
- Brown & Brown, Inc. (BRO) reported organic growth of 9.5% in Q3 2024, compared with 10% in Q2 2024. Organic growth in the retail segment was driven by strong net new business, partly offset by moderating rates and exposure units.
- Arthur J. Gallagher & Co. (AJG) posted 6% organic growth for their combined brokerage and risk management segments in Q3 2024, below the firm’s Q2 2024 organic growth of 7.7%.
- Willis Towers Watson Public Limited Company (WTW) had 6% organic growth in Q3 2024, in-line with the 6% organic growth in Q2 2024.
- AON plc. (AON) had organic revenue growth of 7% in Q3 2024, compared to 6% in Q2 2024, driven by net new business and strong retention.
- Baldwin Insurance Group’s (BWIN) organic revenue growth in Q3 2024 was 14%, lower than Q2 2024 growth of 19% and Q1 2024 growth of 16%.
- Ryan Specialty Holdings, Inc. (RYAN) reported Q3 2024 organic growth of 11.8%, compared to Q2 2024’s 14.2%.
Marsh & McLennan Companies, Inc. (NYSE: MMC)
MMC reported Q3 2024 adjusted earnings per share (EPS) of $1.63 on revenue of $5.7 billion compared to consensus EPS of $1.62 on $5.7 billion revenue. MMC’s Q3 2024 organic growth was 5%, compared to 6% Q2 2024, and 9% Q1 2024.
John Doyle, President and CEO of MMC, said: “Our talent, expertise and solutions help clients manage challenges and accelerate opportunities to thrive. So, we remain positive in our outlook for growth. We are well positioned and have a track record of performing across economic cycles due to the enduring value we bring to clients and the resilience of our business.”
In insurance and reinsurance markets, The Marsh Global Insurance Market Index was down 1% overall in the third quarter versus flat in the second quarter. Global property rates were down 2% versus flat in the second quarter. Workers’ compensation decreased low single digits. Global financial and professional liability rates were down 7%, while cyber decreased 6%. In reinsurance, demand continued to rise, and capacity remained adequate in the quarter.
Read more about third quarter earnings for MMC
Brown & Brown (NYSE: BRO)
BRO reported Q3 2024 adjusted EPS of $0.91 on revenue of $1.19 billion, compared with consensus EPS of $0.88 on $1.17 billion revenue. Organic growth was 9.5% in Q3 2024, compared with 10% in Q2 2024. Organic growth in the retail segment was driven by strong net new business, partly offset by moderating rates and exposure units. Its programs segment saw strong performance, with organic growth of 22.8%. BRO discussed how the economic conditions in the countries where it operates were generally unchanged compared to the first half of 2024. Businesses are continuing to invest and hire, “but at a more moderate pace as compared to the last few years.”
Insurance rates for many lines continued to increase, but the pace is moderating compared to the first half of 2024. BRO saw rate increases of 2-7% range for most lines in the admitted Property & Casualty markets. The third quarter saw moderating rate increases for non-CAT property lines, which were in a range of flat to up 5%. For casualty, BRO continued to see rate increases “for primary layers due to ongoing size of legal judgments in the U.S. and to a lesser extent, higher levels of inflation.” Rates for excess casualty increased by 1%-10% or more, similar to the last few quarters.
“On the M&A front, competition for high-quality businesses remained consistent with the first half of the year. While the number of acquisitions by private equity backers decreased as interest rates rose, we’re now starting to see higher levels of activity as interest rates are beginning to decrease,” said BRO CEO, President, and Director J. Powell Brown on the earnings call. The company also noted that pricing and terms for high quality businesses remained competitive.
Read more about third quarter earnings for BRO.
Arthur J. Gallagher & Co. (NYSE: AJG)
AJG reported Q3 2024 adjusted earnings per share (EPS) of $2.26 on revenue of $2.77 billion, compared to consensus EPS of $2.27 on $2.80 billion revenue. For their combined brokerage and risk management segments, AJG posted 6% organic growth, below the firm’s Q2 2024 organic growth of 7.7%.
For the brokerage segment, organic growth was 6%. AJG’s reinsurance, wholesale, and specialty businesses posted overall organic growth of 8%. The company completed 4 new mergers during Q3 2024, totaling $47 million of estimated annualized revenue.
AJG had approximately 60 term sheets being signed and prepared, representing around $700 million of annualized revenue. AJG Chairman & CEO J. Patrick Gallagher noted, “Regardless of market or economic conditions, I believe we are well positioned to take market share across our brokerage business…Putting this all together, we continue to see full year ’24 brokerage organic around 7.5%, and that would be another outstanding year.”
Read more about third quarter earnings for AJG.
Willis Towers Watson Public Limited Company (NASDAQ: WTW)
WTW reported Q3 2024 adjusted diluted EPS of $2.93 on revenue of $2.29 billion, compared to consensus estimates of $2.71 adjusted diluted EPS on $2.29 billion revenue. WTW delivered 6% organic growth in Q3 2024, in line with the 6% organic growth in Q2 2024. Q3 2024 results were driven by strong revenue growth, operating leverage, and the success of the transformation program.
“Corporate Risk & Broking had a solid quarter, growing 10% with strong contributions across all geographies including double-digit growth in Great Britain and our Western Europe and international regions.,” said WTW CFO Andrew Jay Krasner. Specialty lines was also a driver of this quarter’s performance, including strong performances at two of WTW’s largest specialty businesses, FINEX and Construction.
In terms of rates, WTW continues to see stabilizing and softening of global rates in lines from the decrease in U.S. inflation. Property, financial lines, and commercial rates have been decreasing, while casualty is stable, but with challenging conditions for motor risks and North American exposures. WTW noted that Hurricane Milton did not seem to increase natural catastrophe rates, but its financial impact is still uncertain.
WTW reaffirmed its full year 2024 projections for adjusted operating margin and adjusted EPS target ranges of 23%-23.5% and $16-$17, respectively. The company continues to see mid-single digit organic growth and revenue of $9.9 billion or more for the full year 2024.
Read more about third quarter earnings for WTW.
AON plc. (NYSE: AON)
AON reported Q3 2024 adjusted EPS of $2.72 on $3.72 billion revenue, compared to consensus estimates of $2.47 adjusted EPS on $3.69 billion revenue. Organic revenue growth was 7% in Q3, compared to 6% in Q2, driven by net new business and strong retention. NFP is performing very well, “exactly in line with expectations for top line growth, cost of revenue synergies, free cash flow and ongoing M&A activity.” In Q2 2024, AON completed the acquisition of NFP, a premier operating platform in the middle market segment.
AON CFO Edmund J. Reese spoke about NFP’s performance: “With five months results since the acquisition, NFP’s year-to-date organic revenue growth is strong. Retention is better than last year on top of a solid recruiting pipeline, and the M&A middle market growth engine is humming having acquired $26 million in EBITDA year-to-date. These acquired firms are seeing value in our independent and connected model, connected to Aon content and capabilities, while maintaining an independent distribution and service model.”
AON reaffirmed its guidance for full year 2024: mid-single digit or greater organic revenue growth, adjusted operating margin expansion above 2023’s 30.6% baseline, all contributing to double digit free cash flow growth over ’23 to ’26. AON is confident in its investments and financial model, allowing it to meet its long-term growth objectives.
Read more about third quarter earnings for AON.
Baldwin Insurance Group (NYSE: BWIN)
BWIN reported Q3 2024 adjusted EPS of $0.33 on revenue of $338.9 million, compared to consensus EPS of $0.34 on revenue of $347.4 million. BWIN’s organic revenue growth in Q3 2024 was 14%, lower than Q2 2024 growth of 19% and Q1 2024 growth of 16%. Adjusted EBITDA grew 14% to $72.8 million.
For the fourth quarter of 2024, BWIN expects revenue of $325 million to $335 million and organic revenue growth toward the high end of the 10% to 15% long-term range. BWIN predicts 2025 organic growth will also fall towards the midpoint of this range. The company anticipates Q4 2024 adjusted EBITDA between $61 million and $66 million.
Bradford Lenzie Hale, CFO of BWIN, shared, “We are pleased with the performance of the business year-to-date as we work to deliver on our stated goals of reducing net leverage, expanding margins, and maintaining overall double-digit organic growth…we continue to see incredibly strong internal fundamentals across all 3 of our segments, and feel confident in our ability to generate durable outsized results for shareholders.”
Read more about third quarter earnings for BWIN.
Ryan Specialty Holdings, Inc. (NYSE: RYAN)
RYAN reported Q3 2024 adjusted EPS of $0.41 on revenue of $604.7 million, compared to consensus estimates of $0.41 adjusted EPS on $601.1 million. RYAN reported Q3 2024 organic growth of 11.8%, compared to Q2 2024’s 14.2%. Q3 2024 growth was impacted by short-term headwinds due to property rate deterioration prior to hurricanes Helene and Milton, but RYAN’s market share gains broad-based growth across specialties helped drive organic growth.
RYAN CEO & Director Timothy William Turner spoke about pricing trends: “After years of significant pricing increases, including in the prior year’s quarter, property pricing was down in Q3 with a deterioration that accelerated in September, which we believe may change course. Meanwhile, casualty pricing accelerated and broadened out across an increasing number of classes.” The firm continues to expect the flow of business into the Excess & Surplus (E&S) and specialty markets to be a significant driver of RYAN’s growth, more so than rate.
M&A is still a top priority for RYAN, and its pipeline is robust, including tuck-ins and large deals. RYAN is acquiring Innovisk, which is expected to close in November. Mr. Turner noted: “Innovisk adds product offerings to Ryan Specialty, including environmental liability, attorney E&O and tax credit protection coverage. They also provide us with access to incremental segments such as international SME for professional lines and we’ll continue expanding our international footprint. We expect each of these acquisitions to contribute to our long-term growth for years to come.”
The firm maintained its guidance for full year 2024 of 13-14% organic growth and adjusted EBITDAC (earnings before interest, taxes, depreciation, amortization, and change in contingent consideration) margin range of 32-32.5%.
