Overall, insurance brokers had strong earnings results in Q1 2024. Management teams were positive in meeting targets for Q1 2024 and further into 2024.
Quick look: Organic growth rates
Organic growth figures reported in Q1 2024 were generally comparable to those seen in Q4 2023. Most brokers reported organic growth rates in a range of 5%-15%.
- Marsh & McLennan Companies, Inc. (MMC) reported Q1 2024 organic growth of 9%, compared to 7% in Q4 2023.
- Brown & Brown, Inc. (BRO) posted organic growth of 8.6% in Q1 2024, up from 7.7% in Q4 2023.
- Arthur J. Gallagher & Co. (AJG): For AJG’s combined brokerage and risk management segments, AJG posted 9.4% organic growth in Q1 2024, compared to the firm’s 8.1% organic growth in Q4 2023.
- Willis Towers Watson Public Limited Company (WTW) posted 5% organic growth in Q1 2024, slightly below its 6% organic growth in Q4 2023.
- AON plc. (AON) had organic revenue growth of 5% in Q1 2024, below the 7% posted in Q4 2023.
- BRP Group, Inc.’s (BRP) organic growth in Q1 2024 was 16%, compared to BRP’s Q4 2023 organic growth of 15%.
- Ryan Specialty Holdings, Inc. (RYAN) reported Q1 2024 organic growth of 13.7%, slightly below Q4 2023’s organic growth of 16%.
Marsh & McLennan Companies, Inc. (NYSE: MMC)
MMC reported Q1 2024 adjusted earnings per share (EPS) of $2.89 on revenue of $6.5 billion, compared to consensus estimates of $2.80 adjusted EPS on $6.4 billion revenue. Marsh’s Q1 2024 organic growth was 9%, compared to 7% in Q4 2023, and 10% in Q3 2023.
John Doyle, President and CEO, said: “Marsh McLennan had a strong start to 2024. Our first quarter results were excellent, and we are well positioned for another good year. Top line continued with 9% underlying revenue growth which was on top of 9% growth in the first quarter of last year. All of our businesses had strong revenue growth with Marsh, Mercer and Oliver Wyman accelerating growth from the fourth quarter.”
Primary insurance rates increased, with the Marsh Global Insurance Market Index up 1% overall in Q1 2024. Property rates increased 3% versus 6% in the fourth quarter. Casualty was up 3%, in line with last quarter. Workers’ compensation decreased mid-single digits, while financial and professional liability rates were down 7% and cyber pricing decreased 6%.
Read more about first quarter earnings for MMC.
Brown & Brown (NYSE: BRO)
BRO reported Q1 2024 adjusted EPS of $1.14 on revenue of $1.26 billion, compared with consensus adjusted EPS of $1.07 on $1.22 billion revenue. Organic growth was 8.6% in Q1 2024, above its 7.7% in Q4 2023, driven by new business and continued rate increases. BRO noted that the economic environment was similar to that of Q4 2023, with strong consumer spending; and companies having comparable levels of hiring and investment.
Similar to the prior quarter, the company saw rate increases in the 5-10% range for most lines in the admitted markets in Q1 2024. The firm noted it is starting to see changes in rates for casualty, professional lines and CAT property compared to prior quarters. “Due to ongoing levels of inflation and the size of legal judgments, pricing for excess casualty lines continues to increase, and we’re seeing upward pressure for primary limits.,” said CEO, President, and Director J. Powell Brown.
“We continued to be an active buyer of businesses, domestically and internationally. Competition for quality businesses has not materially changed as compared to second half of 2023,” noted BRO in its Q1 2024 investor presentation. During Q1 2024, BRO completed six acquisitions with estimated annual revenue of $16 million.
Read more about first quarter earnings for BRO.
Arthur J. Gallagher & Co. (NYSE: AJG)
AJG reported Q1 2024 adjusted earnings per share (EPS) of $3.49 on $3.22 billion, compared to consensus adjusted EPS of $3.41 on $3.19 billion revenue. For their combined brokerage and risk management segments, AJG posted 9.4% organic growth, above the firm’s Q4 2023 organic growth of 8.1%. Q1 2024 was AJG’s 13th straight quarter of double-digit revenue growth. Adjusted EBITDAC (Earnings before interest, taxes, depreciation, amortization, and the change in estimated acquisition earnout payables) margin was 37.8%, up from 30.1% posted in Q4 2023.
For the brokerage segment, organic growth was 8.9% and adjusted EBITDAC growth was up 18% year-over-year. AJG’s reinsurance wholesale and specialty businesses posted overall organic of 13%. During Q1 2024, AJG completed 12 mergers totaling $70 million of estimated annualized revenue.
AJG had approximately 50 term sheets signed or being prepared, representing around $350 million of annualized revenue. Chairman & CEO J. Patrick Gallagher noted, “Looking forward, we continue to see ’24 full year organic in the 9% to 11% range as our larger ’23 new business wins have been fully onboarded. We now expect full year margin of approximately 20.5%. That would also be another outstanding year.”
Read more about first quarter earnings for AJG.
Willis Towers Watson Public Limited Company (NASDAQ: WTW)
WTW reported Q1 2024 adjusted diluted EPS of $3.29 on revenue of $2.34 billion, compared to consensus estimates of $3.25 adjusted diluted EPS on $2.37 billion revenue. WTW posted 5% organic growth in Q1 2024, below the 6% organic growth in Q4 2023. Q1 2024 results were driven by new business activity and strong client retention. The company’s specialization strategy in its Risk & Broking segment continued to be a key driver of organic growth.
WTW noted that its specialty businesses continue to outperform in the Risk and Broking segment. Client retention was also strong for Risk & Broking, with retention rates in the mid-90s, helped by WTW’s focus on data and analytics. “Our results this quarter were a solid start to 2024, and reflect a continuation of the significant progress we have been making on our strategy and operational performance. We expect our momentum to continue throughout the rest of the year and are confident in achieving our 2024 targets,” said WTW CFO Andrew Jay Krasner.
In 2024, WTW continues to project mid-single-digit organic growth and revenue goal of $9.9 billion or more. “The current tightened risk landscape and potentially changing rate environment creates more opportunities for us to help our clients manage their risk profile given the scale and depth of the solutions we can offer them. And given the demand we see in the marketplace, we feel good about delivering on our top line targets of mid-single-digit organic revenue growth and at least $9.9 billion in revenue,” said CEO & Director Carl A. Hess.
Read more about first quarter earnings for WTW.
Aon plc. (NYSE: AON)
AON reported Q1 2024 adjusted EPS of $5.66 on $4.07 billion revenue, compared to consensus estimates of $5.92 adjusted EPS on $4.14 billion revenue. Organic revenue growth was 5% in Q1 2024, compared to 7% in Q4 2023. Aon noted its excitement about the completion of its NFP transaction; and the opportunity from Aon and NFP content capabilities enabled by Aon Business Services. In Q4 2023, the firm announced its acquisition of NFP, a premier operating platform in the middle market segment.
Aon CEO & Executive Director Gregory Clarence Case spoke about how the company is well positioned: “Our first quarter results and the close of NFP put us in a strong position to continue delivering results through 2024 and over the long term. This progress fully reinforces our 3×3 plan focused on 3 fundamental commitments over the next 3 years, including capitalizing on our work in risk capital and human capital, delivering Aon client leadership and amplifying these efforts through Aon Business Services.”
Aon’s long-term guidance continues to be for mid-single digit or greater organic revenue growth. The firm also expects adjusted operating margin expansion and double-digit free cash flow growth in 2024 and beyond.
Read more about first quarter earnings for AON.
BRP Group, Inc. (NASDAQ: BRP)
BRP reported Q1 2024 adjusted earnings per share (EPS) of $0.56 on revenue of $380.4 million, compared to consensus EPS of $0.52 on $375.6 million revenue. BRP’s organic revenue growth in Q1 2024 was 16%, higher than Q4 2023 growth of 15%, but slightly lower than Q3 2023’s growth of 19%. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) grew 29% to $101.7 million, compared to $45.6 million in Q4 2023.
BRP also closed on the sale of their Connected Risk Solutions wholesale business to Amwins, generating gross cash proceeds of approximately $59 million. This transaction is expected to be neutral to 2024 adjusted EPS and accretive to both 2024 organic growth and adjusted EBITDA margin. Looking ahead, BRP’s full-year 2024 guidance is unchanged: with projected revenue of $1.35 billion to $1.4 billion; organic growth towards the upper end of our long-term range of 10% to 15%; and adjusted EBITDA of $315 million to $330 million.
Trevor Baldwin, CEO of BRP Group, shared, “In summary, we are extremely pleased with our results for the first quarter and for the exciting opportunities that lie ahead for The Baldwin Group. Our largely completed integration work will now enable us to increasingly leverage the full value of our talent and technology advantages, which have driven our continued industry-leading organic growth and accelerating margin and free cash flow expansion.”
Read more about first quarter earnings for BRP.
Ryan Specialty Holdings, Inc. (NYSE: RYAN)
RYAN reported Q1 2024 adjusted EPS of $0.35 on revenue of $552.0 million, compared to consensus estimates of $0.35 adjusted EPS on $547.3 million. RYAN reported Q1 2024 organic growth of 13.7%, compared to Q4 2023’s organic growth of 16%. Q1 2024 growth was broad-based and driven by new business production and contributions from recent acquisitions.
Ryan spoke of continued positive trends in the market, with secular trends continuing to drive growth in the E&S space. Chairman & CEO Patrick G. Ryan said on the earnings call: “We continue to believe the E&S market will consistently outpace growth in the admitted market, overshadowing any cyclical shifts in certain lines with respect to submission, flow and pricing.”
Mergers and acquisitions (M&A) continue to be a priority for RYAN, and its pipeline remains robust, with both tuck-ins and potential large deals. “We are committed to expanding our total addressable market within specialty insurance, particularly with targeted investments in delegated authority, benefits and alternative risks as well as deepening our considerable moat by enhancing our scale, scope and intellectual capital,” said Chairman & CEO Patrick G. Ryan. The firm’s guidance for full year 2024 is for 12.5%-14.0% organic growth, with adjusted EBITDAC margin between 31.0%-31.5%. RYAN continues to expect that the flow of business into the non-admitted market to be a greater driver of growth than rate.
Read more about first quarter earnings for RYAN.
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