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The second quarter of 2024 proved to be a robust period for insurance brokers, with many industry players meeting or exceeding earnings expectations. Management teams across the board maintained a positive outlook for the year, emphasizing their confidence in hitting 2024 targets despite ongoing economic uncertainties. Organic growth rates reported by the major brokers reflected stable or improving performance, signaling resilience in a challenging market environment.
Organic Growth Trends: A Steady Climb
Organic growth rates, a key indicator of a broker’s internal growth excluding the impact of acquisitions, mergers, and other external factors, remained strong in Q2 2024. The majority of brokers reported organic growth figures ranging between 5% and 15%, comparable to the levels seen in the first quarter of the year. This consistency highlights the sector’s ability to sustain growth even amid fluctuating market conditions.
Marsh & McLennan Companies, Inc. (NYSE: MMC)
Marsh & McLennan Companies reported Q2 2024 adjusted earnings per share (EPS) of $2.41 on revenue of $6.22 billion, slightly missing revenue expectations but meeting EPS estimates. The company’s organic growth of 6% was a slight dip from the previous quarter’s 9% but was consistent with their historical performance. President and CEO John Doyle expressed confidence in the company’s outlook for the rest of 2024, emphasizing expectations for mid-single-digit or better underlying revenue growth, margin expansion, and strong EPS growth. However, Doyle also acknowledged the potential for economic volatility, underscoring the uncertainty in the macroeconomic environment.
Regarding market conditions, the Marsh Global Insurance Market Index showed a flat overall rate environment in Q2 2024, with property rates remaining stable and casualty rates increasing slightly. The company’s Risk & Insurance Services segment continued its streak of strong performance, marking the 14th consecutive quarter of 7% or higher underlying growth.
Brown & Brown, Inc. (NYSE: BRO)
Brown & Brown reported impressive results for Q2 2024, with adjusted EPS of $0.93 on revenue of $1.18 billion, surpassing both EPS and revenue expectations. The company’s organic growth of 10% was driven by strong new business acquisition, high retention rates, and continued rate increases across various lines. CEO J. Powell Brown highlighted the sustained rate increases in the admitted P&C markets, particularly in auto and work comp, and noted the ongoing pricing pressure in the E&S market.
Brown & Brown also made strategic acquisitions during the quarter, adding 10 businesses with estimated annual revenues of $13 million. Despite a competitive M&A landscape, the company remains optimistic about its acquisition strategy, particularly in securing high-quality businesses that complement its existing operations.
Arthur J. Gallagher & Co. (NYSE: AJG)
Arthur J. Gallagher reported Q2 2024 adjusted EPS of $2.26 on revenue of $2.74 billion, with organic growth of 7.7% for its combined brokerage and risk management segments. While this represented a slight decline from Q1 2024’s 9.4% growth, the company remains confident in its future prospects. Chairman and CEO J. Patrick Gallagher emphasized the strength of the company’s M&A pipeline, with 60 term sheets representing around $550 million of annualized revenue currently in process.
The company’s reinsurance, wholesale, and specialty businesses continued to perform well, posting 12% organic growth. Gallagher expressed optimism about the company’s long-term growth, driven by a combination of new business wins, strategic acquisitions, and robust financial performance.
Willis Towers Watson (NASDAQ: WTW)
Willis Towers Watson reported Q2 2024 adjusted diluted EPS of $2.55 on revenue of $2.27 billion, exceeding EPS expectations while meeting revenue forecasts. The company’s organic growth improved to 6% in Q2 2024, reflecting successful execution of its transformation program and increasing operating leverage.
CEO Carl A. Hess highlighted the company’s focus on specialization, talent investment, and technology, which have sustained high client retention rates and fueled growth in its specialty businesses. WTW sees stabilizing and softening rates in key areas like property and financial lines, while the cyber market continues to experience faster rate reductions. Based on strong performance and a positive outlook, WTW raised its 2024 adjusted operating margin and EPS targets.
AON plc. (NYSE: AON)
AON delivered solid results in Q2 2024, with adjusted EPS of $2.93 on revenue of $3.76 billion, meeting revenue expectations but slightly missing EPS estimates. The company’s 6% organic growth was driven by strong new business and retention, as well as the successful integration of its recent acquisition, NFP. AON expects significant revenue synergies from this transaction and remains focused on its M&A strategy, particularly in the mid-market segment and high-growth geographies.
CFO Christa Davies reiterated AON’s long-term guidance for mid-single-digit or greater organic revenue growth and double-digit free cash flow growth, supported by the company’s 3×3 plan.
Baldwin Insurance Group (NYSE: BWIN)
Baldwin Insurance Group continued its impressive growth trajectory in Q2 2024, reporting 19% organic growth, well above its Q1 2024 growth of 16%. The company’s adjusted EPS of $0.34 on revenue of $339.84 million exceeded expectations, reflecting strong performance across all key metrics. CEO Trevor Baldwin expressed confidence in the company’s outlook for the remainder of 2024, citing high net new business wins and robust financial performance.
BWIN’s guidance for the full year remains strong, with anticipated organic growth near the higher end of its long-term 10%-15% range, supported by a solid pipeline of new business opportunities and continued margin expansion.
Ryan Specialty Holdings, Inc. (NYSE: RYAN)
Ryan Specialty Holdings reported Q2 2024 adjusted EPS of $0.58 on revenue of $695.44 million, with organic growth of 14.2%, driven by strong renewal retention, new business production, and continued tailwinds in the E&S market. The company’s wholesale brokerage specialty saw significant growth in both property and casualty lines, supported by favorable market conditions and increased underwriting appetite.
CEO Patrick G. Ryan announced a leadership transition, with Timothy W. Turner set to take over as CEO on October 1, 2024. The company also raised its full-year 2024 guidance, reflecting increased confidence in its ability to deliver strong financial performance.
Bottom Line
The Q2 2024 earnings season demonstrated the resilience and adaptability of insurance brokers in navigating a complex and uncertain market environment. With organic growth rates remaining strong and management teams expressing confidence in meeting or exceeding their 2024 targets, the outlook for the industry remains positive. As brokers continue to leverage strategic acquisitions, maintain high client retention, and capitalize on favorable market conditions, they are well-positioned to deliver sustained growth and value to stakeholders in the months ahead.
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