Arthur J. Gallagher Enhances U.K., Canada Presence - Analyst Blog

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International insurance brokerage and risk management services firm, Arthur J. Gallagher & Co. ( AJG ) announced the acquisition of U.K.-based underwriting solutions provider, Evolution Underwriting Group. The terms of the transaction were not disclosed.

Evolution Underwriting specializes in providing a wide range of commercial risks including commercial combined, property owners, vacant property, professional indemnity, tradesmen, directors & officers liability and excess of loss.

The acquisition of Evolution Underwriting will benefit Arthur J. Gallagher as it will not only add to the latter's existing client capabilities but also fit well in its U.K. operations.

On Feb 5, the company had declared the acquisition of Cohen & Lord Insurance Brokers Ltd. Based in Ottawa, Ontario, Cohen & Lord Insurance offers clients across Canadian provinces of Ontario and Quebec retail property/casualty insurance products and services. The addition of this company will further enhance Arthur J. Gallagher's presence in Ontario.

Arthur J. Gallagher reported fourth-quarter net earnings per share of 56 cents which outperformed the Zacks Consensus Estimate of 54 cents by 3.7% and also improved 16.7% year over year. Additionally, the company reported solid revenues of $1.2 billion which surpassed the Zacks Consensus Estimate of $1.1 billion by 8% and also improved 40% year over year.

Notably, Arthur J. Gallagher, which generated revenues of $761.2 million in 2014, is well known for its inorganic growth initiatives. The latest takeover marks the third one in the current quarter. Moreover, the company's solid liquidity position cushions its inorganic growth initiatives.

Currently, Arthur J. Gallagher carries a Zacks Rank #3 (Hold).

Stocks to Consider

Better-ranked stocks from the insurance sector include Allied World Assurance Company Holdings, AG ( AWH ), Arch Capital Group Ltd. ( ACGL ) and Endurance Specialty Holdings Ltd. ( ENH ). All three stocks sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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