Overall, insurance brokers had solid earnings results in Q2 2024. Management teams continued to be positive in meeting targets for 2024.
Quick look: Organic growth rates
Organic growth figures reported in Q2 2024 were generally comparable to those seen in Q1 2024. Most brokers reported organic growth rates in a range of 5%-15%.
- Marsh & McLennan Companies, Inc.’s (MMC) Q2 2024 organic growth was 6%, compared to 9% in Q1 2024, and 7% in Q4 2023.
- Brown & Brown, Inc. (BRO) reported organic growth of 10% in Q2 2024, above the 8.6% in Q1 2024, driven by strong new business, retention, and continued rate increases.
- Arthur J. Gallagher & Co. (AJG) posted 7.7% organic growth for their combined brokerage and risk management segments in Q2 2024, below the firm’s Q1 2024 organic growth of 9.4%.
- Willis Towers Watson Public Limited Company (WTW) had 6% organic growth in Q2 2024, above the 5% organic growth in Q1 2024.
- AON plc. (AON) had organic revenue growth of 6% in Q2 2024, compared to 5% in Q1 2024, boosted by strong new business and retention.
- Baldwin Insurance Group’s (BWIN) organic revenue growth in Q2 2024 was 19%, higher than Q1 2024 growth of 16% and Q4 2023 growth of 15%.
- Ryan Specialty Holdings, Inc. (RYAN) reported Q2 2024 organic growth of 14.2%, compared to Q1 2024’s organic growth of 13.7%.
Marsh & McLennan Companies, Inc. (NYSE: MMC)
MMC reported Q2 2024 adjusted earnings per share (EPS) of $2.41 on revenue of $6.22 billion, compared to consensus EPS of $2.39 on $6.31 billion revenue. MMC’s Q2 2024 organic growth was 6%, compared to 9% Q1 2024, and 7% in Q4 2023.
John Doyle, President and CEO, said: “We are well positioned for another great year in 2024. We continue to expect mid-single-digit or better underlying revenue growth, another year of margin expansion and strong growth in adjusted EPS. Our outlook assumes current macro conditions persist. However, meaningful uncertainty remains and the economic backdrop could be materially different than our assumptions.”
Related to insurance and reinsurance market conditions, the Marsh Global Insurance Market Index was flat overall in the second quarter versus a 1% increase in the first quarter. Global property rates were flat versus up 3% in the first quarter. Casualty increased in the low single digits, while workers’ compensation decreased low single digits. Financial and professional liability rates and cyber pricing were down 5% and 6%, respectively. For Risk & Insurance Services, Q2 2024 revenue was $4 billion, marking the 14th consecutive quarter of 7% or higher underlying growth.
Read more about second quarter earnings for MMC.
Brown & Brown (NYSE: BRO)
BRO reported Q2 2024 adjusted EPS of $0.93 on revenue of $1.18 billion, compared with consensus EPS of $0.88 on $1.14 billion revenue. Organic growth was 10% in Q2 2024, above the 8.6% in Q1 2024, driven by strong new business, retention, and continued rate increases. The company noted that the economic environment was similar to that seen in Q1 2024, with businesses continuing to invest and hire.
The company saw rate increases consistent with those seen in the last few quarters – in the 5-10% range for most lines in the admitted P&C markets. There was moderation in rate increases for non-CAT property, but rates for primary and excess casualty have seen increases of 1%-10%.
BRO CEO, President, and Director J. Powell Brown stated: “From a rate perspective, it’s worth splitting the conversation into admitted and E&S markets. For the admitted market, we do not anticipate material changes from the first half of the year. The outliers will continue to be auto; work comp; casualty; any really, really, large premium accounts, things like that. But for the E&S market, we expect continued pricing pressure or moderation in CAT property rates unless there’s meaningful storm activity this summer. Casualty pricing will more than likely continue to move higher.”
During Q2 2024, BRO made 10 acquisitions with estimated annual revenues of $13 million. “The M&A marketplace remained competitive for high-quality businesses. While the number of acquisitions by private equity backers has decreased, they are still active,” noted Mr. Brown.
Read more about second quarter earnings for BRO.
Arthur J. Gallagher & Co. (NYSE: AJG)
AJG reported Q2 2024 adjusted EPS of $2.26 on revenue of $2.74 billion, compared to consensus adjusted EPS of $2.24 on $2.77 billion revenue. For their combined brokerage and risk management segments, AJG posted 7.7% organic growth in Q2 2024, below the firm’s Q1 2024 organic growth of 9.4%.
For the brokerage segment, organic growth was 7.7%. AJG’s reinsurance, wholesale, and specialty businesses posted overall organic of 12%. The company completed 12 new mergers during Q2 2024, totaling $72 million of estimated annualized revenue.
AJG had approximately 60 term sheets being signed and prepared, representing around $550 million of annualized revenue. Chairman & CEO J. Patrick Gallagher noted, “Our net new business is up. Our M&A pipeline is growing. I’m proud of the year-to-date financial performance. And as you can tell, I’m bullish on ’24 and beyond.”
Read more about second quarter earnings for AJG.
Willis Towers Watson Public Limited Company (NASDAQ: WTW)
WTW reported Q2 2024 adjusted diluted EPS of $2.55 on revenue of $2.27 billion, compared to consensus estimates of $2.32 adjusted diluted EPS on $2.27 billion revenue. WTW had 6% organic growth in Q2 2024, above the 5% organic growth in Q1 2024. Q2 2024 results resulted from robust organic growth, success of its transformation program, and increasing operating leverage across businesses.
“In Risk and Broking, our focus on specialization, investments in talent and technology and top-quality client service continues to sustain client retention rates in the mid-90s, and generate substantial growth opportunities. This is evidenced by the segment’s organic revenue growth of 10% for the quarter, fueled by our specialty businesses, which continued to outpace the growth of the rest of the segment,” said CEO & Director Carl A. Hess.
Regarding rates, WTW sees stabilizing and softening rates in some of its largest lines, including property with an increasing supply of capacity. Financial lines are softening but seeing slower rate reductions, but the cyber market is seeing faster softening.
Based on its strong 2024 performance year-to-date and continued confidence in its outlook, WTW increased the low end of its 2024 adjusted operating margin and adjusted EPS target ranges: to 23%-23.5% and $16-$17, respectively. The company continues to project mid-single-digit organic growth and revenue goal of $9.9 billion or more.
Read more about second quarter earnings for WTW.
AON plc. (NYSE: AON)
AON reported Q2 2024 adjusted EPS of $2.93 on $3.76 billion revenue, compared to consensus estimates of $3.08 adjusted EPS on $3.74 billion revenue. Organic revenue growth was 6% in Q2, compared to 5% in Q1 2024, boosted by strong new business and retention. In Q2 2024, AON completed the acquisition of NFP, a premier operating platform in the middle market segment. AON commented that its NFP transaction is performing well after two months of results, with strong organic revenue growth and the expectation for “$175 million of net revenue synergies by 2026 and inorganic growth from ongoing M&A.”
AON Executive VP & CFO Christa Davies spoke about how M&A is a focus for the firm: “Our M&A pipeline continues to be focused on our high priority areas, including the mid-market and attractive geographies that will bring scalable solutions to our clients’ growing and evolving challenges… we expect NFP to do M&A comprised of $45 million to $60 million of EBITDA (earnings before interest, taxes, depreciation, and amortization) per year, and they are on track for the full year 2024.” AON completed 14 deals year-to-date in 2024.
AON’s guidance for full year 2024 and the long-term continues to be for mid-single digit or greater organic revenue growth; and double-digit free cash flow growth in 2024 and beyond. AON is confident in its progress with its 3×3 plan continuing to drive results in 2024 and beyond.
Read more about second quarter earnings for AON.
Baldwin Insurance Group (NYSE: BWIN)
BWIN reported Q2 2024 adjusted EPS of $0.34 on revenue of $339.84 million, compared to consensus EPS of $0.33 on revenue of $336.68 million. BWIN’s organic revenue growth in Q2 2024 was 19%, higher than Q1 2024 growth of 16% and Q4 2023 growth of 15%. Adjusted EBITDA grew 22% to $74.9 million compared to 29% in Q1 2024.
Looking ahead to Q3 2024, the company expects revenue of $340 million to $350 million and organic revenue growth of 10% to 15%. For the full year 2024, BWIN anticipates revenue of $1.375 billion to $1.4 billion, organic revenue growth near the higher end of its long-term 10% to 15% range, and adjusted EBITDA of $315 to $325 million.
Trevor Baldwin, CEO of BWIN, shared, “We are pleased with the results for the first 6 months of this year and the momentum we are seeing across the business on the organic growth, margin, free cash flow and net leverage fronts. The underlying strength of our franchise has never been stronger as evidenced by historically high net new business wins year-to-date.”
Read more about second quarter earnings for BWIN.
Ryan Specialty Holdings, Inc. (NYSE: RYAN)
RYAN reported Q2 2024 adjusted EPS of $0.58 on revenue of $695.44 million, compared to consensus estimates of $0.57 adjusted EPS on $693.1 million. RYAN reported Q2 2024 organic growth of 14.2%, compared to Q1 2024’s organic growth of 13.7%. Q2 2024 growth was driven by strong renewal retention, continued tailwinds in E&S, and new business production.
Ryan saw double-digit growth across its businesses. Its wholesale brokerage specialty saw strong growth in property and casualty, with property seeing strong new business and high retention as risks continue in the E&S channel. “Given years of significant rate increases and no mega catastrophe of that last year, underwriting appetite has picked up, taking rates off their peak as additional capacity enters the market. That said, the market continues to be impacted by elevated levels of attritional and secondary perils, including severe convective storms, which are off to another record year on top of a record high in 2023,” said President & Director Timothy William Turner.
M&A is still a major focus for RYAN, and its pipeline remains robust. RYAN signed a definitive agreement to acquire US Assure, a leading program focused exclusively on builder’s risk insurance, which will expand RYAN’s broker relationships and total addressable market.
In terms of leadership, RYAN is implementing a succession plan starting Oct 1, 2024. Patrick G. Ryan, the Founder, Chairman, and CEO of Ryan Specialty, will transition to the role of Executive Chairman. Timothy W. Turner, President of Ryan Specialty and Chairman and CEO of RT Specialty, will become CEO of Ryan Specialty and keep his role as Chairman of RT Specialty.
The firm’s updated guidance for full year 2024 is now for 13%-14% organic growth, compared to prior guidance of 12.5%-14.0%. RYAN also raised the range of adjusted EBITDAC margin projection to between 32%-32.5%, up from the prior 31.0%-31.5%.
Read more about second quarter earnings for RYAN.
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