Arthur J. Gallagher & Co.

Insurance policy renewals generate effectively recurring annual revenue with high retention rates characteristic of long-standing commercial broker relationships; the brokerage segment posted record earnings in FY2020 through the COVID contraction and has delivered positive organic growth every full fiscal year from FY2020 through FY2025.

The brokerage segment is dominant at approximately 87% of FY2025 revenues, but within it AJG serves transportation, energy, healthcare, government contractors, specialty wholesale, and employee benefits — genuinely differentiated end markets. The Risk Management segment (Gallagher Bassett, ~13%) adds a structurally distinct revenue stream in third-party claims administration.

Approximately 67% of revenues come from the US per the FY2025 10-K, with the remaining approximately 33% spread across Australia, Canada, New Zealand, and the UK. The US weighting above 60% reflects meaningful but incomplete international diversification.

Insurance brokerage has inherent operating leverage as commercial premium volumes grow on a largely fixed relationship and technology base; AJG posted adjusted EBITDAC margin of approximately 30.8% in Q4 FY2025. The people-intensive nature of brokerage and near-constant M&A integration activity moderate the incremental margin potential.

Brokerage commissions and Gallagher Bassett claims fees are recurring and tied to non-discretionary commercial insurance needs; AJG's revenues grew through the FY2020 COVID stress period, confirming the defensive character of the base. Annual rather than multi-year contractual terms place this just short of a fully contractual anchor.