Revenues however up over a tenth year on year
US broking giant Arthur J. Gallagher has reported a $6 million loss for the first quarter of this year.
The company said the loss was caused by discontinued operations ($22.3m) and a sharp decline in investment income from $35.4m to $1.6m. In the first quarter of 2007, Gallagher reported profits of $19.8m.
However Gallagher, the fourth largest insurance broker in the world, reported that its brokerage and risk management revenues rose by over a tenth (10.2%) year on year to $374.2m. One percent of this growth was organic. Pretax profits for the broking business rose by 13 per cent year on year to $32.2m.
Chairman, President and chief executive of Gallagher J. Patrick Gallagher Jr. said: "On a combined basis, earnings growth fell short of what I anticipated. Solid EBITDA growth in the Brokerage Segment was mostly offset by declines in the Risk Management Segment. Risk Management’s earnings suffered principally as a result of excess headcount, which we expect will be rectified as claim counts increase throughout 2008.
"Operationally, I am extremely pleased that we completed the sale of our reinsurance operations, that we completed 11 acquisitions and that we are working hard on our previously announced headcount reduction and cost savings initiatives.These activities should help us continue to grow, deliver excellent client service and improve shareholder returns even in a soft market."
In February, Aon acquired Gallagher Re’s US and UK businesses for more than $30m.
