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 LLC - Analyst : My first question is just -- my first question is about the outlook for contingents. If there's no hurricanes this year, right, it's been pretty light or actually no losses so far. And was the benefit on contingents, would that be Q4? Or could that benefit Q3 as well? And then what are you embedding for contingents, I guess, from the absence of hurricanes within the organic guidance? Because I know organic, right, does include the contingent piece.

Question: Elyse Greenspan - Wells Fargo Securities LLC - Analyst : Okay. And then my second question is on 2026. So I think on last quarter's earnings call, you guys said it felt a lot like this year. Right now, you fine-tune this year to 6.5% in the Brokerage business. Does that still feel like what you would think next year would come in at for brokerage organic?

Question: Elyse Greenspan - Wells Fargo Securities LLC - Analyst : And then Pat, just one, or Pat -- or maybe this is more a Doug question. On AP, you guys gave updated synergies. Could you break that down between expense and revenue? And then I'm looking on the AP deal set in the CFO commentary where you give EBITDAC, right, for Q3 and Q4 of this year. Does that assume some synergies start to come in? Or is that a pre-synergy figure?

Question: Robert Cox - Goldman Sachs Group Inc - Analyst : I wanted to ask about AssuredPartners as well on -- just hoping for an update around thinking, excluding synergies over the next couple of years, the expectations on getting AssuredPartners' organic growth profile to look more like the legacy Gallagher. What are you guys thinking there? Do you think you can improve the organic growth? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2025 / 1:00PM, AJG.N - Arthur J. Gallagher & Co. To Host Regularly Scheduled Quarterly Management Meeting

Question: Robert Cox - Goldman Sachs Group Inc - Analyst : Got it. And just a follow-up on maybe just like the pressure from interest rates you're seeing. I think you guys had flagged the large life case timing as sort of a risk here in the third quarter. How do you see that playing out over the next several quarters? And are you also seeing any impacts from sort of the expectation that interest rates will drop in any other lines of business like construction?

Question: Mark Hughes - Truist Securities - Analyst : Yes. On the Property business, sounds like property was a little bit better or not as bad in Q3. How much of your better renewal premium was just lower seasonality on 3Q renewals as opposed to some better pricing? That would be one question. And then secondly, where do you think property is going? Is there any -- was it shallowing through the quarter? Do you think it's kind of past the most negative points? Or can we see another dip down if there's no storm activity this 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. SEPTEMBER 18, 2025 / 1:00PM, AJG.N - Arthur J. Gallagher & Co. To Host Regularly Scheduled Quarterly Management Meeting

Question: Mark Hughes - Truist Securities - Analyst : Yes. Yes. How about commercial auto? Did you suggest there was a little more competition in that or more capacity in commercial auto?

Question: Gregory Peters - Raymond James - Analyst : I have a couple of questions for you. First of all, I want to get right after the meat and on page 7, on the disclosures around -- the updated disclosures around AP. And I was wondering if you could give us some sort of flavor on the integration costs of $575 million, which is up from $500 million. And can you talk about what portion of that was stock grants? What portion of that relates to pure operational integration? And since you've increased the expense load, how do you expect those integration costs to -- the cadence of those costs over the next three years?

Question: Gregory Peters - Raymond James - Analyst : Related to that, on the stock piece. So these PE-backed roll-ups when they buy out their partners do a combination of cash and stock. And we're hearing various levels of success on those stock awards that they were giving these PE partners. Then you come along and do this big transaction and you give out stock grant. So I'm trying to reconcile why you had to give out new stock grants, or walk me through the mechanics of your stock grants versus the stock grants that AP had in place for their partners, how that all works.

Question: Gregory Peters - Raymond James - Analyst : I just -- one other related topic. One of the PE-backed companies that's well known to everyone on the call and is out there, they're pursuing a strategy of entering the US market by actually poaching teams from various brokers and they're going along offering big comp packages. So could you walk us through noncompetes and nonsolicits and what the risks are to the producers and retention in your organization as this continues to evolve?

Question: Gregory Peters - Raymond James - Analyst : Okay. Well, you definitely hit the over on the use of the word [bupkes].

Question: David Motemaden - Evercore Inc - Analyst : I had a question just on some of these large life deals. And I guess, it doesn't sound like it's a huge number, if I think about it on a full year basis, maybe $40 million to $60 million. But I'm wondering if there's -- if you guys think there's any pent-up demand there, any latent demand of these deals that could boost organic if we do get some rate cuts or more rate cuts? And is that -- are we talking like that could be like is it 0.5 point of organic growth upside for next year? Is it 1 point? Just sort of wondering if you guys could help me think through the sensitivity there.

Question: David Motemaden - Evercore Inc - Analyst : Got it. Okay. That's helpful. And then maybe just on -- I'm wondered more about -- wondering more about just net new business and share gains that you guys have seen over the past couple of quarters, just as RPC has moderated. Are there any stats you guys could share with us in terms of how that's trended? Is that ticking up? Are you guys capturing more share in this type of environment that should be reflected in the organic numbers? Because I think that is a component when I sort of think about the drivers, nominal GDP pricing, like that is a decent size driver there, too, in terms of like net share gains. So I was hoping maybe you could talk about that.

Question: Michael Zaremski - Bank of Montreal - Analyst : First question is on organic and brokerage. When you kind of frame, '26 organic is potentially being similar to '25. I guess, one, would you expect reinsurance to stay as disproportionately strong? I know you guys have been doing a great job taking share there. And then also, would you expect the RPC levels, I know it's only one component, but would do you expect the RPC level trend line to continue kind of moving south of it?

Question: Michael Zaremski - Bank of Montreal - Analyst : Got it. That's helpful color. Switching gears, a couple of questions on M&A. Patrick Gallagher, Chief -- COO, talked about 30,000 brokers overseas, maybe up for grabs over -- in the coming decades. I suppose we could ask about like the TAM on international brokerage. I don't want to ask a question you don't have the answer at the top of your fingertips. But like -- would it be 30,000 times like low millions of dollars of revenues for these brokers? Or is there like a -- is that a big TAM or a kind of a --

Question: Michael Zaremski - Bank of Montreal - Analyst : Helpful. And just lastly, just a point in on M&A. I noticed the divestitures number was somewhat material this quarter. You just did -- obviously, you're integrating a big acquisition. Should we be thinking that divestitures number is a number that could be slightly more material than it has been historically?

Question: Meyer Shields - Keefe Bruyette & Woods Inc - Analyst : I want to ask two quick questions. One, on the benefits consulting side, I totally get that it's sort of like -- I think that is a fee per head per month. Is there a sort of typical inflation rate associated with that fee?

Question: Meyer Shields - Keefe Bruyette & Woods Inc - Analyst : Okay. No, that is tremendously helpful in terms of what I think about it. Second question because I've been struggling broadly with why the industry can't get ahead of commercial auto loss cost, and it's been basically a decade. Is there more of an affordability problem for, I don't know, trucking clients than clients in other industries with less wheels exposure?

Question: Meyer Shields - Keefe Bruyette & Woods Inc - Analyst : Yes, that would be more of a constraint on rate increases that (inaudible).

Question: Gregory Peters - Raymond James - Analyst : Excellent. Another bite at the apple. In Bill's comments, he talked about medical cost inflation. He said high single digits. He said the self-funded plans are actually higher. I'm curious why -- what's driving that? Is it the drugs that's driving? Usually, you think self-funded plans would have a lower medical cost inflation than traditional risk transfer.

Question: Gregory Peters - Raymond James - Analyst : Okay. And then in Patrick's comments, he talked about AI and technology and he -- and Patrick, you mentioned policy checking being performed by AI. If -- I thought you had a lot of that service being provided by the offshore Centers of Excellence for Gallagher. Are you replacing some of those responsibilities that were held in India and elsewhere by using technology now? Maybe you can provide some color on what your -- you meant by that statement.

Question: Gregory Peters - Raymond James - Analyst : And, Pat, you said 15,000, that's what you -- the number you have. And what's the percentage of the total?

Question: Gregory Peters - Raymond James - Analyst : 15,000 out of 70,000. Got it.

Question: Elyse Greenspan - Wells Fargo Securities LLC - Analyst : I wanted to just come back to wholesale organic. I'm not sure if you guys gave the number for the quarter because I think (inaudible) was one in specialty. Just give us a sense how the wholesale organic is trending? And if you could give some color on open brokerage binding and the NDA business, like how the Q3 is trending to date relative to the Q2?

Question: Elyse Greenspan - Wells Fargo Securities LLC - Analyst : Got it, mid- to high single digits. And then you had said for the third quarter that there was maybe, right, with the brokerage guide, maybe $10 million from the large life deals. What about like within the Q4, right? What are you including within the Q4 organic embedded within the 6.5% full year guide for benefits for the large benefits contracts?

Question: Elyse Greenspan - Wells Fargo Securities LLC - Analyst : And then I was going to come back, Pat, to something, I guess, you will kind of just answer it in the prior question. But as we think about the Centers of Excellence in India, are you using that on the AP business driving the synergies, the expense synergies that you guys outlined today? Or could that be help on the expense side, but just like the AP folks and your Centers of Excellence above the synergies that you've outlined?

Question: Michael Zaremski - Bank of Montreal - Analyst : Yes, I'm here. Sorry. final follow-up on the health care conversation, increasing costs, given we have the pleasure of having Bill on, and I'm not sure if Scott's salon. But we get asked whether the higher health care expense trend is impacting Gallagher's organic. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2025 / 1:00PM, AJG.N - Arthur J. Gallagher & Co. To Host Regularly Scheduled Quarterly Management Meeting There's a lot that goes into organic, but it doesn't appear that it's providing a boost when we take into account the lumpy life sales, and it's been related. It also -- is there any impact it's having on the organic in the -- in Scott's workers' comp business. It doesn't appear that the higher costs are moving into the comp market.