Arthur J. Gallagher & Co. To Host Regularly Scheduled Quarterly Management Meeting Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Elyse Greenspan - Wells Fargo Securities - Analyst : Hi, thanks. Good morning. My first question is on the reinsurance business. Mid-teens organic growth, pretty strong number for the first quarter. Can you just provide a little bit more detail on just the components of what's driving that? I think you mentioned some new business wins. Can you just help us understand what's price retention and new business and just what helped with that strong number in the first quarter?

Question: Elyse Greenspan - Wells Fargo Securities - Analyst : Thanks. And then my second question is on AssuredPartners. How did the economics of the deal, relative to the accretion that you outlined, changed if it gets pushed back, if at all? And then is AP still pursuing M&A transactions during this, perhaps lengthier, regulatory process, and can you provide an update on just how their revenue growth has been since you announced the transaction?

Question: Elyse Greenspan - Wells Fargo Securities - Analyst : Thank you.

Question: Mike Zaremski - BMO Capital Markets - Analyst : Hey, good morning. Couple of follow-ups on the Assured deal. In terms of the time frame just to be clear, am I right that the agency has 30 days after you all respond or maybe you could update us on time frame so like by you all saying it'll be a second half of the year close? Is that -- maybe you can tell us your assumptions here. You're saying you're not going to respond to them for a few months or are you putting more cushion in for maybe further back and forth? And I guess just related, does this waiting period cause a delay on any other deals that have to go through the HSR Act, such as the Woodruff Sawyer deal or just other deals that would be in the pipe? Thanks.

Question: Mike Zaremski - BMO Capital Markets - Analyst : Yes, that helps. Appreciate that. So my follow-up is maybe moving over to the competitive environment, more specifically on wholesale. Some of the prepared commentary, you kind of painted a picture that the wholesale pricing moderation was somewhat similar to what we're seeing in the standard marketplace, at least US standard marketplace. I'm curious, is it [surplus] or versus historical to see moderation in pricing fairly meaningfully on the property side? But the data still points to actual flows staying positive, like moving into the ENS marketplace. Is there anything kind of going on we should be thinking about because I thought historically when prices soften you start seeing kind of just an outflow of business back into the standard marketplace or maybe I don't have enough data so any time would be helpful?

Question: Mike Zaremski - BMO Capital Markets - Analyst : Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 20, 2025 / 1:00PM, AJG.N - Arthur J. Gallagher & Co. To Host Regularly Scheduled Quarterly Management Meeting

Question: David Montemaden - Evercore ISI - Analyst : Hey, good morning. Pat, you guys had mentioned that you guys were surprised by the second request for information. I mean, I was as well. I guess, do you have any sense in terms of like -- are there any particular jurisdictions where there might be concentrations of revenue or do you have any sort of sense in terms of what may have caused that?

Question: David Montemaden - Evercore ISI - Analyst : Got it. Thank you, that's helpful. And then maybe second question just -- it sounds like you're obviously getting some share gains and reinsurance as pricing is moderated. I'm wondering if you could talk about just the trajectory of share gains within the primary business as RPC has moderated a bit here over the last few quarters and into the first quarter of this year? Have you seen your new business wins tick up and is there anything you could provide from a quantification of that over the last 6 or 12 months?

Question: David Montemaden - Evercore ISI - Analyst : Got it. Thank you so much for the answers.

Question: Alex Scott - Barclays - Analyst : Hey, thanks for taking my questions. First one I had is I wanted to see if you could unpack the drivers behind some of the differences you're seeing between the smaller end of the market and the larger end of the market, specifically in retail brokerage? And maybe just your thoughts on what's happening there. Is it more on the property side versus casualty and what are the underlying influences? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 20, 2025 / 1:00PM, AJG.N - Arthur J. Gallagher & Co. To Host Regularly Scheduled Quarterly Management Meeting

Question: Alex Scott - Barclays - Analyst : Yeah, that's really helpful. Thank you.

Question: Alex Scott - Barclays - Analyst : Okay, separate follow-up, just on the 1Q guide being really strong in brokerage, 8% to 9%. Can you talk through -- why not take up the full year? Is it more just that you don't want -- you don't have as much visibility yet on the later part of the year and it's an uncertain environment that it's causing it? Or does it have more to do with reinsurance? Maybe helps a lot more in the first quarter? Can you help me think through whether it's more seasonality or whether it's more just caution and not wanting to guide too much throughout the year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 20, 2025 / 1:00PM, AJG.N - Arthur J. Gallagher & Co. To Host Regularly Scheduled Quarterly Management Meeting

Question: Alex Scott - Barclays - Analyst : Totally understood. Thank you.

Question: Katie Sakys - Autonomous Research - Analyst : First question on the timeline for AssuredPartners, does the shift change any considerations we should make to seasonality? And then perhaps more broadly, can you kind of give us a reminder of what exactly seasonality to organic growth looks like for the broader brokerage segment over the next couple of quarters?

Question: Katie Sakys - Autonomous Research - Analyst : Okay, thank you. And then just one quick follow-up on the 8% RPS organic guide for this quarter. Did you break that down between open brokerage and MGA at all? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 20, 2025 / 1:00PM, AJG.N - Arthur J. Gallagher & Co. To Host Regularly Scheduled Quarterly Management Meeting

Question: Katie Sakys - Autonomous Research - Analyst : Okay, great. Thank you so much.

Question: Elyse Greenspan - Wells Fargo Securities - Analyst : Hi, thanks, I guess I wanted to come back to the organic growth (technical difficulty)

Question: Elyse Greenspan - Wells Fargo Securities - Analyst : Oh sorry, can you hear me now?

Question: Elyse Greenspan - Wells Fargo Securities - Analyst : Thanks. Sorry about that. I wanted to come back to the organic guide, the 6% to 8% for brokerage for the year with the Q1 trending better. And it sounded like in response to Alex's question, you left the door open to maybe raising that or being more precise with Q1 earnings. Is there any other seasonality we need to be thinking about in terms of the quarters that could be better or worse? I know you guys had previously flagged stronger Q1 due to reinsurance. I'm just trying to think about the back three quarters of the year from an organic perspective.

Question: Elyse Greenspan - Wells Fargo Securities - Analyst : And then my second question was on some of the pricing stuff we just went over so it seems like small accounts went from, I think you were saying up around 6% to 1%, '24 to '25. But then it seemed like -- sorry, I said that wrong, right? The larger accounts was the one that went down, but then you saw small accounts actually go up from 6% to 9%, right, where there was more compression on the large side from 5% to 1%. Is that in property and casualty and then I guess, is that an all-in number? I'm a little bit surprised I guess that you -- I know we went through some of the color during the comments, but that the small accounts went up so much and there was so much give back on the large accounts in terms of pricing.

Question: Elyse Greenspan - Wells Fargo Securities - Analyst : Okay, and then one other one, Doug, that I was just thinking about. The deal is pushed back a little bit. You guys have obviously have the cash and you're carrying this. You guys always generate a lot of cash each year that you say can fund M&A. Would you think at some point, if the deal gets pushed back more towards the later stages of the yea, perhaps buying back stock and then using cash generated for AP or does it feel like the pipeline is strong enough that you'll just kind of hold on to the capital until the deal closes?

Question: Elyse Greenspan - Wells Fargo Securities - Analyst : Okay, got it. Thank you.

Question: Mike Zaremski - BMO Capital Markets - Analyst : I'm just envious that Elyse has six questions. When I heard the answer on RPS, is MGA programs business being kind of a double digits, well into double digits organic growth in [12], I believe? We've seen some rather explosive growth in the overall MGA marketplace in recent years, including on the M&A side from some of the public peers kind of driving that business to be a bigger part of their business. But just curious, is that anything behind that double-digit growth that might be trendable or anything we should know?

Question: Mike Zaremski - BMO Capital Markets - Analyst : And Mike, is that an area that is conducive for M&A or is there something structural that those MGAs prefer to maybe be with a more of a larger wholesaler or just stay independent?

Question: Mike Zaremski - BMO Capital Markets - Analyst : Got it. Thank you.