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What changed in Arthur J. Gallagher & Co.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Arthur J. Gallagher & Co.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+515 added−566 removedSource: 10-K (2025-02-18) vs 10-K (2024-02-09)

Top changes in Arthur J. Gallagher & Co.'s 2024 10-K

515 paragraphs added · 566 removed · 428 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

186 edited+39 added−40 removed186 unchanged
Biggest changeWe anticipate further significant developments across several jurisdictions in which we operate in 2024 and 2025; • Legal or political constraints on our ability to maintain or increase prices; • Cash balances held in foreign banks and institutions where governments have not specifically enacted formal guarantee programs; • Epidemics or pandemics at a regional or global level; • Lost business or other financial harm due to protectionism in the U.S. and in countries around the world, including adverse trade policies, governmental actions affecting the flow of goods, services and currency, and governmental restrictions on the transfer of funds to us from our operations outside the U.S.; and • The trade and military policies of the U.S. government could further develop in ways that exacerbate the risks described above, or introduce new risks for our international operations.
Biggest changeSee also “Changes in tax laws could adversely affect us”; • Legal or political constraints on our ability to maintain or increase prices; • Cash balances held in foreign banks and institutions where governments have not specifically enacted formal guarantee programs; • Epidemics or pandemics at a regional or global level; • Lost business or other financial harm due to protectionism in the U.S. and in countries around the world, including adverse trade policies, tariffs, trade wars and other governmental actions affecting the flow of goods, services or 18 currency, and governmental restrictions on the transfer of funds to us from our operations outside the U.S.; for example, the practice of using off-shore labor has come under increased scrutiny in the U.S. and governmental authorities or insurance carriers could seek to impose financial costs or restrictions on the use of off-shore centers of excellence such as the ones we operate in India and other international jurisdictions (see also “Business disruptions could have a material adverse effect on our operations, damage our reputation and impact client relationships”); and • Increased tensions between countries such as the U.S., China and Russia and related trade and military policies of the U.S. government that may cause retaliation or countermeasures from other countries or regions, could further develop in ways that exacerbate the risks described above, or introduce new risks for our non-U.S. operations, such as increasing the potential that sanctions, tariffs, global mobility restrictions or other related measures may impact our business.
The global nature of our operations increases the complexity and cost of compliance with laws and regulations, including increased staffing needs, the development of new policies, procedures and internal controls and providing training to employees in multiple locations, adding to our cost of doing business.
The global nature of our operations increases the complexity and cost of compliance with laws and regulations, including increased staffing needs, the development of new policies, procedures and internal controls and providing training to employees in multiple locations, adding to our cost of doing business.
Many of these laws and regulations may have differing or conflicting legal standards across jurisdictions, increasing further the complexity and cost of compliance.
Many of these laws and regulations may have differing or conflicting legal standards across jurisdictions, increasing further the complexity and cost of compliance.
For example, claims have been made against certain energy companies alleging that greenhouse gas emissions constitute a public nuisance. In addition to the possibility of our being named in such actions, we and our partners could face the risk of environmental and product liability claims related to concrete incorporating fly ash produced using The Chem-Mod™ Solution.
For example, claims have been made against certain energy companies alleging that greenhouse gas emissions constitute a public nuisance. In addition to the possibility of being named in such actions, we and our partners could face the risk of environmental and product liability claims related to concrete incorporating fly ash produced using The Chem-Mod™ Solution.
Pillar 2 will establish a global minimum tax rate of 15%, such that multinational 18 enterprises with an effective tax rate in a jurisdiction below this minimum rate will need to pay additional tax, which could be collected by the parent company’s tax authorities if that parent country adopts Pillar 2 or by those in other countries, depending on whether and how each country implements the OECD’s approach in its tax treaties and domestic tax legislation.
Pillar 2 will establish a global minimum tax rate of 15%, such that multinational enterprises with an effective tax rate in a jurisdiction below this minimum rate will need to pay additional tax, which could be collected by the parent company’s tax authorities if that parent country adopts Pillar 2 or by those in other countries, depending on whether and how each country implements the OECD’s approach in its tax treaties and domestic tax legislation.
Bribery Act, risks relating to ensuring compliance with licensing and regulatory requirements, tax and accounting issues, the risk that an acquisition distracts management and personnel from our existing business, and integration difficulties relating to accounting, information technology (which we refer to as IT), pay equity, or 13 human resources, some or all of which could have an adverse effect on our results of operations and growth.
Bribery Act) risks relating to ensuring compliance with licensing and regulatory requirements, tax and accounting issues, the risk that an acquisition distracts management and personnel from our existing business, and integration difficulties relating to accounting, information technology (which we refer to as IT), pay equity, or human resources, some or all of which could have an adverse effect on our results of operations and growth.
We believe that the primary factors determining our competitive position with other organizations in our industry are the quality of the services we render, the personalized attention we provide, the individual and corporate expertise of the brokers and consultants providing the actual service to the client, our data and analytics capabilities, and our ability to help our clients manage their overall risk exposure and insurance or reinsurance costs.
We believe that the primary factors determining our competitive position with other organizations in our industry are the quality of the services we render, our data analytics capabilities, the personalized attention we provide, the individual and corporate expertise of the brokers and consultants providing the actual service to the client, and our ability to help our clients manage their 19 overall risk exposure and insurance or reinsurance costs.
In emerging markets and other jurisdictions with less developed legal systems, local laws and regulations may not be established with sufficiently clear and reliable guidance to provide us with adequate assurance that we are aware of all necessary licenses to operate our business, that we are operating our business in a compliant manner, or that our rights are otherwise protected.
In emerging markets and other 9 jurisdictions with less developed legal systems, local laws and regulations may not be established with sufficiently clear and reliable guidance to provide us with adequate assurance that we are aware of all necessary licenses to operate our business, that we are operating our business in a compliant manner, or that our rights are otherwise protected.
We periodically evaluate our estimates and assumptions, including those relating to the valuation of goodwill and other intangible assets, investments, income taxes, revenue recognition, deferred costs, stock-based compensation, claims handling obligations, retirement plans, litigation and contingencies. We base our estimates on historical experience and various assumptions that we 26 believe to be reasonable based on specific circumstances.
We periodically evaluate our estimates and assumptions, including those relating to the valuation of goodwill and other intangible assets, investments, income taxes, revenue recognition, deferred costs, stock-based compensation, claims handling obligations, retirement plans, litigation and contingencies. We base our estimates on historical experience and various assumptions that we believe to be reasonable based on specific circumstances.
These and other forms of regulatory action could reduce our profitability or growth by increasing the costs of compliance, increasing the risk of costly enforcement actions, restricting the products or services we sell, the markets we enter, the methods by which we sell our products and services, or the prices we can charge for our services and the form of compensation we can accept from our clients, underwriting 25 enterprises and third parties.
These and other forms of regulatory action could reduce our profitability or growth by increasing the costs of compliance, increasing the risk of costly enforcement actions, restricting the products or services we sell, the markets we enter, the methods by which we sell our products and services, or the prices we can charge for our services and the form of compensation we can accept from our clients, underwriting enterprises and third parties.
We may have to devote significant resources to attract and retain talent, which could negatively affect our business, operating results and financial condition. In addition, our industry has experienced competition for leading brokers and in the past we have lost key brokers and groups of brokers, along with their clients, business relationships and intellectual property directly to our competition.
We may have to devote significant resources to attract and retain talent, which could negatively affect our business, operating results and financial condition. In addition, our industry has experienced competition for brokers and in the past we have lost key brokers and groups of brokers, along with their clients, business relationships and intellectual property directly to our competition.
Volatility or declines in premiums or other adverse trends in the insurance industry may seriously undermine our profitability. We derive much of our revenue from commissions and fees for our brokerage services. We do not determine the premiums on which our commissions are generally based. Moreover, premiums are cyclical in nature and may vary widely based on market 19 conditions.
Volatility or declines in premiums or other adverse trends in the insurance industry may seriously undermine our profitability. We derive much of our revenue from commissions and fees for our brokerage services. We do not determine the premiums on which our commissions are generally based. Moreover, premiums are cyclical in nature and may vary widely based on market conditions.
We may also incur future debt obligations 28 that might subject us to additional or more restrictive covenants that could affect our financial and operational flexibility, including our ability to pay dividends. We cannot make any assurances that we will be able to refinance our debt or obtain additional financing on terms acceptable to us, or at all.
We may also incur future debt obligations that might subject us to additional or more restrictive covenants that could affect our financial and operational flexibility, including our ability to pay dividends. We cannot make any assurances that we will be able to refinance our debt or obtain additional financing on terms acceptable to us, or at all.
Our activities are also subject to a variety of other laws, rules and regulations addressing licensing, data privacy, AI, wage-and-hour standards, employment and labor relations, competition, anti-corruption, currency, the conduct of business, reserves and the amount of local investment with respect to our operations in certain countries.
Our activities are also subject to a variety of other laws, rules and regulations addressing licensing, cybersecurity, data privacy, AI, wage-and-hour standards, employment and labor relations, competition, anti-corruption, currency, the conduct of business, reserves and the amount of local investment with respect to our operations in certain countries.
We do not generally assume net underwriting risk, other than with respect to de minimis amounts necessary to provide minimum or regulatory capital, and briefly, in connection with our catastrophe bond business, and thus do not generally experience direct material financial implications related to extreme weather events.
We do not generally assume net underwriting risk, other than with respect to de minimis amounts necessary to provide minimum or regulatory capital, and briefly, in connection with our catastrophe bond business, and thus do not generally experience direct 22 material financial implications related to extreme weather events.
In addition, disclosure or media reports of actual or perceived security vulnerabilities to our systems or those of our third-party service providers, even if no breach has been attempted or occurred, could lead to reputational harm, loss of customers and revenue, or increased regulatory actions oversight and scrutiny.
In addition, disclosure or media reports of actual or 23 perceived security vulnerabilities to our systems or those of our third-party service providers, even if no breach has been attempted or occurred, could lead to reputational harm, loss of customers and revenue, or increased regulatory actions oversight and scrutiny.
To date, the dispute between India and Pakistan involving the Kashmir region, rising tensions between India and China, incidents of terrorism in India, the potential for civil unrest and general geopolitical uncertainties have not adversely affected our operations in India. However, such factors could potentially affect our operations 16 there in the future.
To date, the dispute between India and Pakistan involving the Kashmir region, rising tensions between India and China, incidents of terrorism in India, the potential for civil unrest and general geopolitical uncertainties have not adversely affected our operations in India. However, such factors could potentially affect our operations there in the future.
Significant lines of insurance coverage and consultant capabilities are as follows: Aviation Disability General Liability Products Liability Casualty Earthquake Health & Welfare Professional Liability Claims Advocacy Errors & Omissions Healthcare Analytics Property Commercial Auto Exchange Solutions Human Resources Retirement Compensation Executive Benefits Institutional Investment Surety Bond Cyber Liability Fiduciary Services Loss Control Voluntary Benefits Dental Fine Arts Marine Wind Directors & Officers Liability Fire Medical Workers’ Compensation Our retail brokerage operations are organized and operate within certain key niche/practice groups, which account for approximately 78% of our retail brokerage revenues.
Significant lines of insurance coverage and consultant capabilities are as follows: Aviation Disability General Liability Products Liability Casualty Earthquake Health & Welfare Professional Liability Claims Advocacy Errors & Omissions Healthcare Analytics Property Commercial Auto Exchange Solutions Human Resources Retirement Compensation Executive Benefits Institutional Investment Surety Bond Cyber Liability Fiduciary Services Loss Control Voluntary Benefits Dental Fine Arts Marine Wind Directors & Officers Liability Fire Medical Workers’ Compensation Our retail brokerage operations are organized and operate within certain key niche/practice groups, which account for approximately 79% of our retail brokerage revenues.
In addition, we have made certain assumptions relating to these acquisitions that may be inaccurate, including as a result of the failure to realize expected benefits, higher than expected integration costs and unknown liabilities as well as general economic and business conditions.
In addition, we have made certain assumptions relating to these 14 acquisitions that may be inaccurate, including as a result of the failure to realize expected benefits, higher than expected integration costs and unknown liabilities as well as general economic and business conditions.
If this occurred, not only would our business be negatively impacted by the general economic decline, but a drop in the stock 21 market affecting our stock price could negatively impact our ability to grow through mergers and acquisitions financed using our common stock.
If this occurred, not only would our business be negatively impacted by the general economic decline, but a drop in the stock market affecting our stock price could negatively impact our ability to grow through mergers and acquisitions financed using our common stock.
These new entrants are focused on using technology and innovation in an attempt to simplify and improve the client exp eri ence, increase efficiencies, alter business models and effect other potentially disruptive changes in the industries in which we operate.
These new entrants are focused on using technology and innovation in an attempt to simplify and 15 improve the client exp eri ence, increase efficiencies, alter business models and effect other potentially disruptive changes in the industries in which we operate.
A compliance failure by even one of our smallest branches could lead to a loss of reputation in the local market, and litigation and/or disciplinary actions that may include compensating clients for loss, the imposition of penalties, and/or the loss of our authorization to operate.
A compliance failure by even one of our smallest branches could lead to a loss of reputation in the local market, and litigation and/or disciplinary actions 26 that may include compensating clients for loss, the imposition of penalties, and/or the loss of our authorization to operate.
These may include new applications or insurance-related services based on AI (e.g., generative AI, machine learning), robotics, blockchain, the metaverse or new approaches to data mining that impact the nature of how we generate revenue.
These may include new applications or insurance-related services based on AI (e.g., generative AI, machine learning), robotics, blockchain, or new approaches to data mining that impact the nature of how we generate revenue.
We enter into agreements with many of our brokers and significant client-facing employees and all of our executive officers, which prohibit them from disclosing confidential information and/or soliciting our clients, prospects and employees upon their termination of employment.
We enter into agreements with many of our brokers and significant client-facing employees and all of our executive officers, which prohibit them from 16 disclosing confidential information and/or soliciting our clients, prospects and employees upon their termination of employment.
Accruals for these items, net of insurance receivables, when applicable, have been provided to the extent that losses are deemed probable and are reasonably estimable. These accruals and receivables are adjusted from time to time as current developments warrant.
Accruals for these items, net of insurance receivables, 24 when applicable, have been provided to the extent that losses are deemed probable and are reasonably estimable. These accruals and receivables are adjusted from time to time as current developments warrant.
Our ability to generate premium based commission revenue may also be challenged by the growing desire of some clients to compensate brokers based upon flat fees rather than a percentage of premium.
Our ability to generate premium based commission revenue may also be challenged by the growing desire of some clients to compensate brokers based 20 upon flat fees rather than a percentage of premium.
A failure to comply with the restrictions under the agreements governing our debt could result in a default under the financing obligations or could require us to obtain waivers from our lenders for failure to comply with these restrictions.
A failure to comply with the restrictions under the agreements governing our debt could result in a default under the financing obligations or could require us to obtain waivers from our 29 lenders for failure to comply with these restrictions.
It is possible that, if the outcomes of these contingencies and legal proceedings 23 were not favorable to us, it could materially adversely affect our future financial results.
It is possible that, if the outcomes of these contingencies and legal proceedings were not favorable to us, it could materially adversely affect our future financial results.
If our costs grow significantly, our margins and results of operations may be materially and adversely impacted and we may not be able to achieve our strategic and financial objectives.
If our costs grow significantly, our margins and results of operations may be 13 materially and adversely impacted and we may not be able to achieve our strategic and financial objectives.
However, in cases where underwriting enterprises fail or face significant payouts related to extreme weather events leading them to withdraw from offering certain lines of coverage, as observed in places such as California, Louisiana, and Florida, such withdrawal negatively impacts the overall capacity for risk-taking capital.
However, in cases where underwriting enterprises fail or face significant payouts related to extreme natural, climate or weather events leading them to withdraw from offering certain lines of coverage, as observed in places such as California, Louisiana, and Florida, such withdrawal negatively impacts the overall capacity for risk-taking capital.
Due to the impracticality of incorporating all relevant data into the models used by AI, it is inevitable that data sets within these models will contain inaccuracies and errors, and potential biases. This could potentially render such models inadequate or flawed, negatively impacting the effectiveness of the technology.
Due to the impracticality of incorporating all relevant data into the models used by AI, it is inevitable that data sets within these models will contain inaccuracies and errors, and potential biases. This could potentially render such models inadequate or flawed, negatively impacting the effectiveness of the technology or our services.
Sales under our ATM 29 program will result in additional dilution for our stockholders. Holders of our common stock have no preemptive rights that entitle holders to purchase their pro rata share of any offering of shares of any class or series and, therefore, such sales or offerings could result in increased dilution to our stockholders.
Sales under our ATM program will result in additional dilution for our stockholders. Holders of our common stock have no preemptive rights that entitle holders to purchase their pro rata share of any offering of shares of any class or series and, therefore, such sales or offerings 30 could result in increased dilution to our stockholders.
Although this “reverse branch” model is typical of other brokers of a similar size, EU regulators continue to assess their approach to this model, including as a result of, among other developments, the supervisory statement issued by the European Insurance and Occupational Pensions Authority (EIOPA) in February 2023.
Although this “reverse branch” model is typical of other brokers of a similar size, EEA regulators continue to assess their approach to this model, including as a result of, among other developments, the supervisory statement issued by the European Insurance and Occupational Pensions Authority (EIOPA) in February 2023.
We report our results in three segments: brokerage, risk management and corporate. The brokerage and risk management segments contributed approximately 86% and 14%, respectively, to 2023 revenues. We generate approximately 64% of our revenues from the combined brokerage and risk management segments in the U.S., with the remaining 36% generated internationally, primarily in Australia, Canada, New Zealand and the U.K.
We report our results in three segments: brokerage, risk management and corporate. The brokerage and risk management segments contributed approximately 86% and 14%, respectively, to 2024 revenues. We generate approximately 64% of our revenues from the combined brokerage and risk management segments in the U.S., with the remaining 36% generated internationally, primarily in Australia, Canada, New Zealand and the U.K.
These risks include, among others, the input of confidential information, including material non-public information, in contravention of our policies or contractual restrictions to which any of the foregoing are subject, or in violation of applicable laws or regulations, including those relating to data protection.
These risks include, among others, the input of confidential information, including material non-public information, in contravention of our policies or contractual restrictions to which any of the foregoing are subject, or in violation of applicable laws or regulations, including those relating to data protection and AI.
The risk of business disruption is more pronounced in certain geographic areas where a significant portion of our business is concentrated. For example, we have substantial operations in India that provide important client support and other back-office services for our global organization.
The risk of business disruption is more pronounced in certain geographic areas where a significant portion of our business is concentrated. For example, we have substantial operations in India that provide important client support and other services for our global organization.
We may be exposed to competitive risks related to the adoption and application of new technologies by established market participants (for example, through disintermediation or use of the metaverse) or new entrants such as technology companies, “Insurtech” start-up companies, and others.
We may be exposed to competitive risks related to the adoption and application of new technologies by established market participants (for example, through disintermediation) or new entrants such as technology companies, “Insurtech” start-up companies, and others.
A disruption affecting RISX-FACS®, third-party cloud services or any other infrastructure supporting our business, including key client relationship management software, could have a material adverse effect on our operations, cause reputational harm and damage our employee and client relationships; • The favorable trend among both underwriting enterprises and self-insured entities toward outsourcing various types of claims administration and risk management services will reverse or slow, causing our revenues or revenue growth to decline; • Concentration of large amounts of revenue with certain clients results in greater exposure to the potential negative effects of lost business due to changes in management at such clients or changes in state government policies, in the case of our government-entity clients, or for other reasons; • Contracting terms will become less favorable or the margins on our services will decrease due to increased competition, regulatory constraints or other developments; • We do not satisfy regulatory requirements related to third party administrators or regulatory developments, including those relating to security, cybersecurity and data privacy as we manage a large amount of highly sensitive and confidential information including personally identifiable information, protected health information and financial information, will impose additional burdens, costs or business restrictions that make our business less profitable; • Volatility in our case volumes, which are dependent upon a number of factors and difficult to forecast accurately, could impact our revenues; • Wage inflation, difficulty attracting and retaining talent, and rising technology costs, all of which have been challenging to control since 2020, may impact our ability to remain competitive in the marketplace and profitably fulfill our existing contracts (other than those that provide cost-plus or other margin protection); • We may be unable to develop further efficiencies in our claims-handling business and may be unable to obtain or retain certain clients if we fail to make adequate improvements in technology or operations; and • Underwriting enterprises or certain large self-insured entities may create in-house servicing capabilities that compete with our third party administration and other administration, servicing and risk management products, and we could face additional competition from potential new entrants into the global claims management services market.
A disruption affecting RISX-FACS®, third-party cloud services or any other 21 infrastructure supporting our business, including key client relationship management software, could have a material adverse effect on our operations, cause reputational harm and damage our employee and client relationships; • The favorable trend among both underwriting enterprises and self-insured entities toward outsourcing various types of claims administration and risk management services will reverse or slow causing our revenues or revenue growth to decline; • Concentration of large amounts of revenue with certain clients results in greater exposure to the potential negative effects of lost business due to changes in management at such clients or changes in state government policies, in the case of our government-entity clients, or for other reasons; • Contracting terms will become less favorable or the margins on our services will decrease due to increased competition, regulatory constraints or other developments; • We do not satisfy regulatory requirements related to third party administrators or that regulatory developments impose additional burdens, costs or business restrictions that make our business less profitable; for example, regulations relating to security, cybersecurity, AI and data privacy as we manage a large amount of highly sensitive and confidential information including personally identifiable information, protected health information and financial information; • Volatility in our case volumes, which are dependent upon a number of factors and difficult to forecast accurately, could impact our revenues; • Wage inflation, difficulty attracting and retaining talent, and rising technology costs, may impact our ability to remain competitive in the marketplace and profitably fulfill our existing contracts (other than those that provide cost-plus or other margin protection); • We may be unable to develop further efficiencies in our claims-handling business and may be unable to obtain or retain certain clients if we fail to make adequate improvements in technology or operations; and • Underwriting enterprises or certain large self-insured entities may create in-house servicing capabilities, including as a result of the adoption of AI, that compete with our third party administration and other administration, servicing and risk management products, and we could face additional competition from potential new entrants into the global claims management services market.
We may not be able to continue such an acquisition strategy in the future and there are risks associated with such acquisitions, which could adversely affect our growth and results of operations. • We face additional risks relating to acquisitions that are larger than our usual tuck-in acquisitions, including that these acquisitions will not perform as expected and that we cannot successfully integrate complex operations. • Damage to our reputation could have a material adverse effect on our business. • Our sustainability and ESG-related aspirations, goals and initiatives, and our public statements and disclosures regarding them, expose us to numerous risks. • If we are unable to apply technology and data analytics effectively in driving value for our clients through technology-based solutions or gain internal efficiencies and effective internal controls through the application of technology and related tools, our operating results, client relationships, growth and compliance programs could be adversely affected. • We are subject to risks associated with AI. • Our success depends, in part, on our ability to attract and retain qualified talent, including our senior management team. • The substantial increase in remote work among our employees subjects us to certain challenges and risks. • Business disruptions could have a material adverse effect on our operations, damage our reputation and impact client relationships. • Sustained increases in compensation expense and the cost of employee benefits could reduce our profitability. • Our substantial operations outside the U.S. expose us to risks different than those we face in the U.S. • Changes in tax laws could adversely affect us. • We face significant competitive pressures in each of our businesses. • Volatility or declines in premiums or other adverse trends in the insurance industry may seriously undermine our profitability. • Contingent and supplemental revenues we receive from underwriting enterprises are less predictable than standard commission revenues, and any decrease in the amount of these forms of revenue could adversely affect our results of operations. • We face a variety of risks in our benefit consulting operations distinct from those we face in our insurance brokerage operations. • We face a variety of risks in our third-party claims administration operations that are distinct from those we face in our brokerage and benefit consulting operations. • Climate risks, including the risk of an economic crisis, risks associated with the physical effects of climate change and disruptions caused by the transition to a low-carbon economy, could adversely affect our business, results of 11 operations and financial condition.
We may not be able to continue such an acquisition strategy in the future and there are risks associated with such acquisitions, which could adversely affect our growth and results of operations. • We face additional risks relating to acquisitions that are larger than our usual tuck-in acquisitions, including that these acquisitions will not perform as expected and that we cannot successfully integrate complex operations. • Damage to our reputation and culture could have a material adverse effect on our business. • Our sustainability aspirations, goals and initiatives, and our public statements and disclosures regarding them, expose us to numerous risks. • If we are unable to apply technology, data analytics and AI effectively in driving value for our clients through technology-based solutions or gain internal efficiencies and effective internal controls through the application of technology and related tools, our operating results, client relationships, organic and inorganic growth and compliance programs could be adversely affected. • We are subject to risks associated with AI. • Our success depends, in part, on our ability to attract and retain qualified talent, including our senior management team. • Business disruptions could have a material adverse effect on our operations, damage our reputation and impact client relationships. • Sustained increases in compensation expense and the cost of employee benefits could reduce our profitability. • Our substantial operations outside the U.S. expose us to risks different than those we face in the U.S. • Changes in tax laws could adversely affect us. • We face significant competitive pressures in each of our businesses. • Volatility or declines in premiums or other adverse trends in the insurance industry may seriously undermine our profitability. • Contingent and supplemental revenues we receive from underwriting enterprises are less predictable than standard commission revenues, and any decrease in the amount of these forms of revenue could adversely affect our results of operations. • We face a variety of risks in our benefit consulting operations distinct from those we face in our insurance brokerage operations. 11 • We face a variety of risks in our third-party claims administration operations that are distinct from those we face in our brokerage and benefit consulting operations. • Climate risks, including the risk of an economic crisis, risks associated with the physical effects of climate change and disruptions caused by the transition to a low-carbon economy, could adversely affect our business, results of operations and financial condition.
If we fail to comply with regulatory requirements or if regulations change in a way that adversely affects our operations, we may not be able to conduct our business, or we may be less profitable.” If we are unable to apply technology and data analytics effectively in driving value for our clients through technology-based solutions or gain internal efficiencies and effective internal controls through the application of technology and related tools, our operating results, client relationships, growth and compliance programs could be adversely affected.
If we fail to comply with regulatory requirements or if regulations change in a way that adversely affects our operations, we may not be able to conduct our business, or we may be less profitable.” If we are unable to apply technology and data analytics effectively in driving value for our clients through technology-based solutions or gain internal efficiencies and effective internal controls through the application of technology and related tools, our operating results, client relationships, ability to attract acquisition targets, growth and compliance programs could be adversely affected.
We are subject to a variety of continuously evolving and developing laws and regulations globally regarding privacy, data protection, and data security, including those related to the collection, storage, handling, use, disclosure, transfer, destruction, and security of personal data.
We are subject to a variety of continuously evolving and developing laws and regulations globally regarding privacy, data protection, and data security, including those related to the collection, storage, handling, use, disclosure, cross-border transfer, destruction, and security of personal data.
We are also required to make certain judgments and estimates that affect the disclosed and recorded amounts of revenues and expenses related to revenue recognition and deferred costs - see Note 4 to our 2023 consolidated financial statements.
We are also required to make certain judgments and estimates that affect the disclosed and recorded amounts of revenues and expenses related to revenue recognition and deferred costs - see Note 4 to our 2024 consolidated financial statements.
Furthermore, the increased availability of remote 15 working arrangements has expanded the pool of companies that compete with us for talent. As competition for skilled professionals remains intense, employers are implementing new offerings to attract talent, including but not limited to increasing compensation, enhancing health and wellness solutions, and providing in-office and remote work options.
Furthermore, the increased availability of remote working arrangements has expanded the pool of companies that compete with us for talent. As competition for skilled professionals remains intense, employers are implementing new offerings to attract talent, including but not limited to increasing compensation, enhancing health and wellness solutions, and providing remote work options.
See Note 3 to our 2023 consolidated financial statements for a summary of our 2023 acquisitions, the amount and form of the consideration paid and the dates of acquisitions. Clients Our client base is highly diversified and includes commercial, industrial, public sector, religious and nonprofit entities, as well as underwriting enterprises in our reinsurance operations and risk management segment.
See Note 3 to our 2024 consolidated financial statements for a summary of our 2024 acquisitions, the amount and form of the consideration paid and the dates of acquisitions. 8 Clients Our client base is highly diversified and includes commercial, industrial, public sector, religious and nonprofit entities, as well as underwriting enterprises in our reinsurance operations and risk management segment.
While we are continuously assessing the impact of these developments, it is difficult to predict such impact on our current plan; • Unfavorable audits and exposure to additional liabilities relating to various non-income taxes (such as payroll, sales, use, value-added, net worth, property and goods and services taxes) in foreign jurisdictions.
While we are continuously assessing the impact of these developments, it is difficult to predict such impact on our current plan; • Unfavorable audits and exposure to additional liabilities relating to various non-income taxes (such as payroll, sales, use, value-added, net worth, property and goods and services taxes) in non-U.S. jurisdictions.
Additionally, changes in accounting standards (see Note 2 to our 2023 consolidated financial statements) could increase costs to the organization and could have an adverse impact on our future financial position and results of operations.
Additionally, changes in accounting standards (see Note 2 to our 2024 consolidated financial statements) could increase costs to the organization and could have an adverse impact on our future financial position and results of operations.
We can provide no assurance that we will be able to successfully integrate the operations of acquisitions that are larger than our usual tuck-in acquisitions, such as Willis Re, Buck, Eastern Insurance, Cadence Insurance and My Plan Manager, that they will perform as expected, or that we will not incur unforeseen obligations or liabilities.
We can provide no assurance that we will be able to successfully integrate the operations of acquisitions that are larger than our usual tuck-in acquisitions, such as AssuredPartners, Buck, Eastern Insurance, Cadence Insurance and My Plan Manager, that they will perform as expected, or that we will not incur unforeseen obligations or liabilities.
While we have disaster recovery procedures in place, they may not be effective. Additionally, insurance may not continue to be available at reasonable prices and may not address all potential losses or compensate us for the possible loss of clients or increase in claims and lawsuits directed against us.
While we have disaster recovery procedures in place, they may not be effective. Additionally, insurance covering such disruptions may not continue to be available at reasonable prices and may not address all potential losses or compensate us for the possible loss of clients or increase in claims and lawsuits directed against us.
Their presence in the market increases the competitive pressures that we face. New competition as a result of these or other legislative or industry developments could cause the demand for our products and services to decrease, which could in turn adversely affect our results of operations and financial condition.
Their presence in the market has increased the competitive pressures that we face. New competition as a result of these or other legislative or industry developments could cause the demand for our products and services to decrease, which could in turn adversely affect our results of operations and financial condition.
It is also not uncommon for private claims by third parties alleging contamination to also include claims for personal injury, property damage, nuisance, diminution of property value, or similar claims. Furthermore, many environmental, health and safety laws authorize citizen suits, permitting third parties to make claims for violations of laws or permits.
It is also common for private claims by third parties alleging contamination to also include claims for personal injury, property damage, nuisance, diminution of property value, or similar claims. Furthermore, many environmental, health and safety laws authorize citizen suits, permitting third parties to make claims for violations of laws or permits.
Negative publicity arising from our association with clients in disfavored businesses or industries, or the perception that we are not sufficiently focused on climate risks facing Gallagher or on reducing our own carbon emissions, as well as resulting from the potential conflict with anti-ESG initiatives from certain U.S. state governments and other stakeholders, could damage our reputation with investors, clients, employees and regulators.
Negative publicity arising from our association with clients in disfavored businesses or industries, or the perception that we are not sufficiently focused on climate risks or on reducing our own carbon emissions, as well as resulting from the potential conflict with anti-ESG initiatives from the U.S. federal or state governments and other stakeholders, could damage our reputation with investors, clients, employees and regulators.
While we have received some degree of confirmation from the IRS relating to our ability to claim these tax credits, the IRS could ultimately determine that the operations did not satisfy the conditions set forth in IRC Section 45.
While we have received some degree of confirmation from the IRS relating to our ability to claim these tax credits, the IRS could ultimately determine that the operations did not satisfy the conditions set forth in IRC Section 45. The IRS audited a number of these operations.
In 2023, we generated approximately 36% of our combined brokerage and risk management revenues outside the U.S. Our business outside the U.S. presents operational, economic and other risks that are different from, or greater than, the risks we face doing comparable business in the U.S.
In 2024, we generated approximately 36% of our combined brokerage and risk management revenues outside the U.S. Our business outside the U.S. presents operational, regulatory, economic and other risks that are different from, or greater than, the risks we face doing comparable business in the U.S.
The process of integrating information systems of businesses we acquire is complex and exposes us to additional risk as we might not adequately identify weaknesses in the targets’ information systems or information handling, privacy and security policies and protocols, which could expose us to unexpected liabilities or make our own systems and data more vulnerable to cybersecurity incidents.
The process of integrating information systems of businesses we acquire is complex and exposes us to additional risk as we might not adequately identify weaknesses in the targets’ information systems or information handling, privacy and security policies and protocols, which could expose us to unexpected liabilities or make our own systems and data more vulnerable to employee or insider error, malfeasance or cybersecurity incidents.
The enactment of more restrictive laws, rules, regulations, or future enforcement actions or investigations 24 could impact us through increased costs or restrictions on our business, and noncompliance could result in regulatory penalties and significant legal liability.
The enactment of more restrictive laws, rules, regulations, or future enforcement 25 actions or investigations could impact us through increased costs or restrictions on our business and could result in regulatory penalties and significant legal liability.
Between our direct operations and this global network of correspondent insurance brokers and consultants, we are able to serve our clients’ coverage and service needs in approximately 130 countries around the world. Global Reinsurance Brokerage Operations Our reinsurance brokerage operations (which we refer to as Gallagher Re) accounted for 12% of our brokerage segment revenues in 2023.
Between our direct operations and this global network of correspondent insurance brokers and consultants, we are able to serve our clients’ coverage and service needs in approximately 130 countries around the world. Global Reinsurance Brokerage Operations Our reinsurance brokerage operations (which we refer to as Gallagher Re) accounted for 13% of our brokerage segment revenues in 2024.
Our wholesale brokers assist our retail brokers and other non-affiliated brokers in the placement of specialized and hard-to-place insurance. These brokers operate through approximately 147 offices primarily located across the U.S., Bermuda and through our approved Lloyd’s of London brokerage operation. More than 84% of our wholesale brokerage revenues comes from non-affiliated brokerage clients.
Our wholesale brokers assist our retail brokers and other non-affiliated brokers in the placement of specialized and hard-to-place insurance. These brokers operate through approximately 162 offices primarily located across the U.S., Bermuda and through our approved Lloyd’s of London brokerage operation. More than 75% of our wholesale brokerage revenues comes from non-affiliated brokerage clients.
We anticipate growing Gallagher Re by increasing the number of underwriting enterprise clients, deepening our relationships with current underwriting enterprise clients, developing new products, further building out our facultative capabilities, and through mergers and acquisitions. Wholesale Insurance Brokerage Operations Our wholesale insurance brokerage operations accounted for 15% of our brokerage segment revenues in 2023.
We anticipate growing Gallagher Re by increasing the number of underwriting enterprise clients, deepening our relationships with current underwriting enterprise clients, developing new products, further building out our facultative capabilities, and through mergers and acquisitions. Wholesale Insurance Brokerage Operations Our wholesale insurance brokerage operations accounted for 14% of our brokerage segment revenues in 2024.
See also Note 3 to our 2023 consolidated financial statements for information regarding the size of transactions in the reporting period.
See also Note 3 to our 2024 consolidated financial statements for information regarding the size of transactions in the reporting period.
If we lose a local key employee, hiring and retaining talent locally or finding an internal candidate qualified to transfer to such location could be difficult; • Less flexible employee relationships, which in certain circumstances has limited our ability to prohibit employees from competing with us after they are no longer employed with us or recover damages, and made it more difficult and expensive to terminate their employment; • Some of our foreign subsidiaries receive revenues or incur obligations in currencies that differ from their functional currencies.
If we lose a local key employee, hiring and retaining talent locally or finding an internal candidate qualified to transfer to such location could be difficult; • Less flexible employee relationships, which in certain circumstances have limited our ability to prohibit employees from competing with us after they are no longer employed with us or recover damages, and made it more difficult and expensive to terminate their employment; • Certain of our non-U.S. subsidiaries receive revenues or incur obligations in currencies that differ from their functional currencies.
Department of Justice (DOJ), the IRS, the Office of Foreign Assets Control, the Federal Trade Commission (FTC) the Financial Industry Regulatory Authority (FINRA) and the Financial Crimes Enforcement Network in the U.S., the Financial Conduct Authority in the U.K., the Australian Securities and Investments Commission in Australia and insurance regulators in nearly every jurisdiction in which we operate.
Department of Justice (DOJ), the IRS, the Federal Trade Commission (FTC) the Financial Industry Regulatory Authority (FINRA) and the Financial Crimes Enforcement Network in the U.S., the Financial Conduct Authority in the U.K., the Australian Securities and Investments Commission in Australia and insurance regulators in nearly every jurisdiction in which we operate.
A recession or decline in economic activity, for these and any other reasons, could adversely impact us in future periods. This could happen, for example, if our clients reduce the amount of insurance coverage, reinsurance coverage, consulting services or 12 claims administration services they purchase due to reductions in headcount, payroll, or replacement and asset values, among other factors.
A recession or decline in economic activity, for these and any other reasons, could adversely impact us in future periods. For example, our clients might reduce the amount of insurance coverage, reinsurance coverage, consulting services or claims administration services they purchase due to reductions in headcount, payroll, or replacement and asset values, among other factors.
In the U.S., there is pending federal legislation and a number of states have proposed their own comprehensive data privacy bills similar to the GDPR and CCPA, with some of those laws already in effect, and others coming into effect between 2024 and 2026.
In the U.S., there is pending federal legislation and a number of states have proposed and some have implemented their own comprehensive data privacy bills similar to the GDPR and CCPA, with some of those laws already in effect, and others coming into effect through 2026.
New laws or regulations reducing employer-sponsored health insurance, by limiting or eliminating tax-advantaged employer-sponsored benefits or otherwise, could impact clients’ demand for our services. If we are unable to adapt our services to changes in the legal and regulatory landscape around employer-sponsored benefits, our results of operations could be adversely impacted. We closed the acquisition of Buck in April 2023.
New laws or regulations reducing employer-sponsored health insurance, by limiting or eliminating tax-advantaged employer-sponsored benefits or otherwise, could impact clients’ demand for our services. If we are unable to adapt our services to changes in the legal and regulatory landscape around employer-sponsored benefits, our results of operations could be adversely impacted.
For example, we are growing our Latin American operations through acquisitions of local family-owned insurance brokerage firms.
For example, we are growing our Latin America operations through acquisitions of local family-owned insurance brokerage firms.
In November 2022, we established an "at the market" equity offering program (which we refer to as an ATM program) pursuant to which we may offer and sell up to 3,000,000 shares of our common stock. We have refreshed our ATM program in the past and expect to refresh our ATM program periodically.
In March 2024, we established an "at the market" equity offering program (which we refer to as an ATM program) pursuant to which we may offer and sell up to 3,000,000 shares of our common stock. We have refreshed our ATM program in the past and expect to refresh our ATM program periodically.
We advise our clients on and provide services related to a wide range of subjects and our ability to attract and retain clients is highly dependent upon the external perceptions of our expertise, level of service, ability to protect client information, trustworthiness, business practices, financial condition and other subjective qualities such as ethics, culture and values.
We advise our clients on and provide services related to a wide range of subjects and our ability to attract acquisition partners and attract and retain clients and employees is highly dependent upon perceptions of our expertise, level of service, ability to protect client information, trustworthiness, business practices, financial condition and other subjective qualities such as ethics, culture and values.
These and other international regulatory risks and labor related risks are described below under “Regulatory, Legal and Accounting Risks”; • We own interests in firms where we do not exercise management control (such as Casanueva Perez S.A.P.I. de C.V. in Mexico and Renomia, A.S. in the Czech Republic) and are therefore unable to direct or manage the business to realize the anticipated benefits, including mitigation of risks, that could be achieved through full ownership; • The potential costs, difficulties and risks associated with local regulations across the globe, including the risk of personal liability for directors and officers (for example, in the U.K.) and “piercing the corporate veil” risks under the corporate law regimes of certain countries; • Difficulties in staffing and managing foreign operations.
See also “Regulatory, Legal and Accounting Risks”; • We own interests in firms where we do not exercise management control (such as Casanueva Perez S.A.P.I. de C.V. in Mexico and Renomia, A.S. in the Czech Republic) and are therefore unable to direct or manage the business to realize the anticipated benefits, including mitigation of risks, that could be achieved through full ownership; • The potential costs, difficulties and risks associated with local regulations across the globe, including the risk of personal liability for directors and officers (for example, in the U.K.) and “piercing the corporate veil” risks under the corporate law regimes of certain countries; • Difficulties in staffing and managing foreign operations.
Similarly, our failure or perceived failure to pursue or fulfill our goals, targets and objectives, to comply with ethical, environmental or other standards, regulations or expectations or to satisfy various reporting standards with respect to these matters, could have the same negative impacts, as well as expose us to government enforcement actions and private litigation.
Similarly, our failure or perceived failure to pursue or fulfill our goals, targets and objectives, to comply with ethical, social environmental or other standards, regulations or expectations, which are continuously evolving, or to satisfy various reporting standards with respect to these matters, could have the same negative impacts, as well as expose us to government enforcement actions and private litigation.
The increased focus on ESG issues has made compliance with regulations, frameworks and stakeholder expectations increasingly complex. Our business faces increased scrutiny from the investment community, clients, employees, potential acquisition targets, regulators and other stakeholders related to our ESG activities.
The increased focus on sustainability has made compliance with regulations, frameworks and stakeholder expectations increasingly complex. Our business faces increased scrutiny from the investment community, clients, employees, potential acquisition targets, regulators and other stakeholders related to sustainability.
See also “We are subject 14 to regulation worldwide.
See also “We are subject to regulation worldwide.
In the future, breaches of any third-party or internal systems may result from circumvention of security systems, denial-of-service, hacking, “phishing”, 22 computer viruses, ransomware, malware, or other cyber-attacks, employee or insider error, malfeasance, social engineering, physical breaches or other actions. Furthermore, the risk from threat actors has increased due to the rapid development of AI capabilities.
In the future, breaches of any third-party or internal systems may result from circumvention of security systems, denial-of-service, hacking, “phishing”, computer viruses, ransomware, malware, or other cyber-attacks, employee or insider error, malfeasance, social engineering, physical breaches or other actions. Furthermore, the risk from threat actors has increased due to the rapid development of AI capabilities. We are an acquisitive organization.
In addition, the transition to a low-carbon economy could give rise to the need for innovative insurance, reinsurance and risk management solutions for entirely new industries and companies, as well as advice and services to bolster climate resilience for existing companies.
In addition, the transition to a low-carbon economy is giving rise to the need for innovative insurance, reinsurance and risk management solutions for entirely new industries and companies, as well as advice and services to bolster climate resilience for existing companies.
These developments include: • Increased capital-raising by underwriting enterprises, which could result in new risk-taking capital in the industry, which in turn may lead to lower insurance premiums and commissions; • Underwriting enterprises selling insurance directly to insureds without the involvement of a broker or other intermediary; • Changes in our business compensation model as a result of regulatory developments; • Federal and state governments establishing programs to provide health insurance (such as a single-payer system) or, in certain cases, property insurance in catastrophe-prone areas or other alternative market types of coverage, that compete with, or completely replace, insurance products currently offered by underwriting enterprises; • Climate-change regulation in the U.S. and around the world moving us toward a low-carbon economy, which could create new competitive pressures around climate resilience consulting services and innovative insurance solutions; • Continued consolidation in the financial services industry, leading to larger financial services institutions offering a wider variety of services including insurance brokerage and risk management services; • Increased competition from new market participants such as banks, accounting firms, consulting firms and Internet or other technology firms offering risk management or insurance brokerage services, or new distribution channels for insurance such as payroll firms and professional employer organizations; and • Third party capital providers have entered the insurance and reinsurance risk transfer market offering products and capital directly to our clients.
These developments include: • Increased capital-raising by underwriting enterprises, which could result in new risk-taking capital in the industry, which in turn may lead to lower insurance premiums and commissions; • Underwriting enterprises selling insurance directly to insureds without the involvement of a broker or other intermediary; • Changes in our business compensation model as a result of regulatory developments; • Federal and state governments establishing programs to provide health insurance (such as a single-payer system) or, in certain cases, property insurance in catastrophe-prone areas or other alternative market types of coverage, that compete with, or completely replace, insurance products currently offered by underwriting enterprises; • Sustainability regulations in the U.S. and around the world, particularly those promoting the transition to a low-carbon economy, which could create new competitive pressures around climate resilience consulting services and innovative insurance solutions; • Continued consolidation in the financial services industry, leading to large financial services institutions offering a wider variety of services including insurance brokerage and risk management services; • Increased competition from new market participants such as banks, accounting firms, consulting firms and Internet or other technology firms offering risk management or insurance brokerage services, or new distribution channels for insurance such as payroll firms and professional employer organizations; and • Third party capital providers entering the insurance and reinsurance risk transfer market offering products and capital directly to our clients.
In addition, our future effective tax rates could be unfavorably affected by changes in tax rates, discriminatory or confiscatory taxation, changes in the valuation of our deferred tax assets or liabilities, changes in tax laws or their interpretation and the financial results of our international subsidiaries.
In addition, our future effective tax rates could be unfavorably affected by changes in tax rates, discriminatory or confiscatory taxation, changes in the valuation of our deferred tax assets or liabilities, changes in tax laws or their interpretation and the financial results of our non-U.S. subsidiaries.
Gallagher Re operates from more than 70 offices across 31 countries, with specialist expertise, underpinned by a portfolio of analytics capabilities including catastrophe modeling, dynamic financial analysis, rating agency analysis and capital modeling.
Gallagher Re operates from more than 60 offices across 26 countries, with specialist expertise, underpinned by a portfolio of analytics capabilities including catastrophe modeling, dynamic financial analysis, rating agency analysis and capital modeling.
This includes scrutiny regarding our goal to reach Net Zero carbon emissions in our direct operations (Scope 1 and Scope 2) by 2050 and our interim goal of 50% reduction in our Scope 1 and Scope 2 carbon emissions, on a per employee basis, by 2030.
This includes scrutiny regarding our goal to reach operational net zero carbon emissions (Scope 1 and Scope 2) by 2050 and our interim goal of a 50% reduction in such emissions, on a per employee basis, by 2030.
Our brokerage segment operates through a network of more than 590 sales and service offices located throughout the U.S. and more than 300 sales and service offices in approximately 60 countries, most of which are in the Australia, Canada, New Zealand and the U.K. Most of these offices are fully staffed with sales and service personnel.
Our brokerage segment operates through a network of more than 580 sales and service offices located throughout the U.S. and approximately 350 sales and service offices in approximately 5 60 countries, most of which are in the Australia, Canada, New Zealand and the U.K. Most of these offices are fully staffed with sales and service personnel.
If we cannot offer new technologies or data analytics solutions as quickly as our competitors, or if our competitors develop more cost-effective technologies, data analytics solutions or other product offerings, we could experience a material adverse effect on our operating results, client relationships, growth, and compliance programs.
If we cannot offer new technologies or data analytics solutions as quickly as our competitors, or if our competitors develop more cost-effective technologies, data analytics solutions or other product offerings, we could experience a material adverse effect on our operating results, client relationships, ability to attract acquisition targets, growth, and compliance programs.
We must also translate the financial results of our foreign subsidiaries into U.S. dollars.
We must also translate the financial results of our non-U.S. subsidiaries into U.S. dollars.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTo date, risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected us, including our business strategy, results of operations or financial condition, and we do not believe that such risks are reasonably likely to have such an effect over the long term.
Biggest changeBased on the information available as of the date of this Annual Report on Form 10-K, we believe that during the last three fiscal years risks from cybersecurity threats, including as a result of previous cybersecurity incidents, have not materially affected us, including our business strategy, results of operations or financial condition, and as of the date of this 31 Annual Report on Form 10-K, the Company is not aware of any material risks from cybersecurity threats that are reasonably likely to do so.
However, due to evolving cybersecurity threats, we may not be able to protect all information systems and, as an acquisitive organization, integrating information systems as we acquire new businesses may expose us to unexpected liabilities or increase our vulnerability.
Due to evolving cybersecurity threats, we may not be able to protect all information systems and, as an acquisitive organization, integrating information systems as we acquire new businesses may expose us to unexpected liabilities or increase our vulnerability.
Our Board of Directors has delegated primary responsibility for the oversight of cybersecurity matters to the Risk and Compliance Committee; however, the full board reviews significant cybersecurity matters as appropriate. Our CIO and CISO report on cybersecurity and information security at each meeting of the Risk and Compliance Committee.
Our Board of Directors has delegated primary responsibility for the oversight of cybersecurity matters to its Risk and Compliance Committee ; however, the full board reviews significant cybersecurity matters as appropriate. Our CIO and CISO report on cybersecurity and information security at each quarterly meeting of the Risk and Compliance Committee.
In addition, our CIO and CISO both attend regular meetings of the executive officer team, including our Chief Executive Officer, Chief Financial Officer and other senior executive officers, dedicated to compliance and risk, and report on cybersecurity matters as appropriate.
In addition, our CIO and CISO both attend regular meetings of the executive officer team, including our Chief Executive Officer, Chief Financial Officer, General Counsel and other senior executive officers, dedicated to compliance and risk, and report on cybersecurity matters as appropriate.
Our cybersecurity program is aligned with notable control frameworks such as the NIST CSF (National Institute of Standard and Technology Cybersecurity Framework) and ISO (International Organization for Standardization) 27001. Our cybersecurity program leverages people, processes, and technology to identify and respond to cybersecurity threats. We have a global incident response capability.
Our cybersecurity program is aligned with notable control frameworks such as the NIST CSF (National Institute of Standards and Technology Cybersecurity Framework) and ISO (International Organization for Standardization) 27001. Our cybersecurity program leverages people, processes, and technology to identify and respond to cybersecurity threats.
We also continuously test and assess our cybersecurity posture, including through annual third-party risk assessments performed by reputable assessors, consultants and auditors. A global FAIR (Factor Analysis of Information Risk) assessment is conducted at least annually to update our cybersecurity risks and corresponding mitigations.
We also require cybersecurity insurance coverage for vendors whose services or products may present a cybersecurity risk. We continuously test and assess our cybersecurity posture, including through annual third-party risk assessments performed by reputable assessors, consultants and auditors. A global FAIR (Factor Analysis of Information Risk) assessment is conducted at least annually to update our cybersecurity risks and corresponding mitigations.
We also have established a dedicated vendor assessment team, which employs systems and processes designed to oversee, identify, and reduce the potential impact of a security incident at a third-party vendor, service provider or customer or otherwise implicating the third-party technology and systems we use, as well as a global training and awareness program.
We have established a dedicated vendor assessment team, which employs systems and processes designed to oversee, identify, and reduce the potential impact of a security incident at a third-party vendor, service provider or customer or that otherwise implicates the third-party technology and systems we use.
Prior to joining us he was Senior Vice President, Chief Information Security Officer at Brighthouse Financial, served as Technology Vice President & Chief Information Security Officer for GE Healthcare and started his career at Allstate Insurance Company. He also holds security, privacy and risk certifications, including Certified Information Systems Auditor, Certified Information Security Manager and Certified Information Systems Security Professional.
Before then, he served as Technology Vice President & Chief Information Security Officer for GE Healthcare. He started his career at Allstate Insurance Company. He also holds security, privacy and risk certifications, including Certified Information Systems Auditor, Certified Information Security Manager and Certified Information Systems Security Professional.
Our CIO has more than 30 years of experience, including from his prior business and technology leadership roles at Aegon N.V., Citigroup, Inc. and JP Morgan Chase & Company. Our CISO has more than 20 years of cybersecurity experience.
Our CIO has more than 30 years of experience, including from his prior business and technology leadership roles at Aegon N.V., Citigroup, Inc. and JP Morgan Chase & Company. Our CISO has more than 20 years of cybersecurity experience. Prior to joining us, he was Senior Vice President, Chief Information Security Officer at Brighthouse Financial.
Our CISO is an active member of our management-level enterprise risk management committee, which has broad oversight of the company’s enterprise risks, including cybersecurity risks.
Our CISO receives ongoing updates from the cybersecurity team regarding the prevention, detection, mitigation, and remediation of cybersecurity incidents and regularly reports to the CIO. Our CISO is an active member of our management-level enterprise risk management committee , which has broad oversight of the company’s enterprise risks, including cybersecurity risks.
Our Chief Information Security Officer (CISO), working together with our Chief Information Officer (CIO), oversees a team of employees dedicated to cybersecurity. Our CISO receives ongoing updates from the cybersecurity team regarding the prevention, detection, mitigation, and remediation of cybersecurity incidents and regularly reports to the CIO.
Our employees complete training on data security and our policies when they join us and annually thereafter. We review the content of our mandatory training annually, and provide access to a comprehensive set of supplemental training. Our Chief Information Security Officer (CISO), working together with our Chief Information Officer (CIO), oversees a team of employees dedicated to cybersecurity.
Added
We have a global incident response capability supported by our Security Operations Center (which we refer to as SOC) team, a managed security service provider (MSSP) and our global Cybersecurity Incident Response Team (which we refer to as CSIRT), which provides threat detection and incident response.
Added
We maintain a global cybersecurity incident response plan and related playbooks, for execution by the SOC team and CSIRT, in coordination with internal and external stakeholders, as applicable. Significant incidents are escalated to a cross-departmental team to assess materiality based on qualitative and quantitative factors.
Added
This team consists of executives representing core business functions, including, among others, information technology, legal, finance, accounting, data protection and business divisions, in consultation with third-party advisors, as applicable. We undertake periodic leadership tabletop exercises and periodic adversarial (“red team”) exercises simulating incident response under common risk scenarios.
Added
As an acquisitive organization, we have also established a program to increase our visibility into the cybersecurity environment of acquisition targets prior to closing.
Added
We, including our third-party vendors, have experienced cybersecurity incidents and threats and may continue to experience them in the future.
Added
However, we cannot eliminate all risks from cybersecurity threats or provide assurances that the Company will not be materially affected by such risks in the future.
Added
There can be no guarantee that our policies, programs and controls, and those of our third-party vendors, including those described in this section, will be sufficient to protect our information, information systems or other property.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed2 unchanged
Biggest changeIn addition to minimum fixed rentals, a number of our leases contain annual escalation clauses generally related to increases in an inflation index. See 30 Notes 15 and 17 to our 2023 consolidated financial statements for information with respect to our lease commitments as of December 31, 2023. Item 3. Legal Proceedings.
Biggest changeIn addition to minimum fixed rentals, a number of our leases contain annual escalation clauses generally related to increases in an inflation index. See Notes 13 and 15 to our 2024 consolidated financial statements for information with respect to our lease commitments as of December 31, 2024. Item 3. Legal Proceedings.
Please see the information set forth in Note 17 to our consolidated financial statements, included herein, under “Litigation, Regulatory and Taxation Matters.”
Please see the information set forth in Note 15 to our consolidated financial statements, included herein, under “Litigation, Regulatory and Taxation Matters.”

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeZiebell 61 President of our Employee Benefit and Consulting Brokerage Operations since 2017, Corporate Vice President since 2011, regional leader in our Employee Benefit and Consulting Brokerage Operations 2004 - 2016 With the exception of Mr. Bloom, we have employed each such person principally in management capacities for more than the past five years.
Biggest changeRetail Brokerage 2016 - 2024 Susan E. Pietrucha 58 Corporate Vice President, Chief Human Resource Officer since 2007 William F. Ziebell 62 President of our Employee Benefit and Consulting Brokerage Operations since 2017, Corporate Vice President since 2011, regional leader in our Employee Benefit and Consulting Brokerage Operations 2004 - 2016 32 With the exception of Mr.
Item 4. Mine Safe ty Disclosures. Not applicable. Information About Our Executive Officers Set forth below are the names, ages, positions and business backgrounds of our executive officers as of the date hereof: Name Age Position and Year First Elected J. Patrick Gallagher, Jr. 71 Chairman since 2006, Chief Executive Officer since 1995, President 1990 - 2024 Thomas J.
Item 4. Mine Safe ty Disclosures. Not applicable. Information About Our Executive Officers Set forth below are the names, ages, positions and business backgrounds of our executive officers as of the date hereof: Name Age Position and Year First Elected J. Patrick Gallagher, Jr. 72 Chairman since 2006, Chief Executive Officer since 1995, President 1990 - 2024 Thomas J.
Gallagher 44 Executive Vice President, Chief Operating Officer since 2024, Corporate Vice President and President of Property/Casualty Brokerage Operation in the Americas 2021 - 2024, Chairman, Canada and Caribbean and CEO of Latin America 2019 - 2021, President, Midwest Region of Property/Casualty Brokerage Operation 2016 - 2019 Walter D.
Gallagher 45 Executive Vice President, Chief Operating Officer since 2024, Corporate Vice President and President of Property/Casualty Brokerage Operation in the Americas 2021 - 2024, Chairman, Canada and Caribbean and CEO of Latin America 2019 - 2021, President, Midwest Region of Property/Casualty Brokerage Operation 2016 - 2019 Walter D.
Gallagher 65 President since 2024, President of our Global Property/Casualty Brokerage Operations 2017 - 2024, Chairman of our International Brokerage Operation 2010 ‑ 2016 Patrick M.
Gallagher 66 President since 2024, President of our Global Property/Casualty Brokerage Operations 2017 - 2024, Chairman of our International Brokerage Operation 2010 ‑ 2016 Patrick M.
Bay 61 Corporate Vice President, General Counsel, Secretary since 2007 Mark H. Bloom 59 Corporate Vice President and Global Chief Information Officer since 2022. Global Chief Information Officer at Aegon N.V., 2016 - 2021 Joel D.
Bay 62 Corporate Vice President, General Counsel, Secretary since 2007 Mark H. Bloom 60 Corporate Vice President and Global Chief Information Officer since 2022. Global Chief Information Officer at Aegon N.V., 2016 - 2021 Douglas K. Howell 63 Corporate Vice President, Chief Financial Officer since 2003 Scott R.
Hudson 62 Corporate Vice President and President of our Risk Management Operations since 2010 Vishal Jain 62 Corporate Vice President since 2016, Chief Service Officer since 2014 Christopher E. Mead 56 Corporate Vice President, Chief Marketing Officer since 2017 Susan E. Pietrucha 57 Corporate Vice President, Chief Human Resource Officer since 2007 William F.
Hudson 63 Corporate Vice President and President of our Risk Management Operations since 2010 Vishal Jain 63 Corporate Vice President since 2016, Chief Service Officer since 2014 Christopher E. Mead 57 Corporate Vice President, Chief Marketing Officer since 2017 Michael R. Pesch 53 Corporate Vice President, Chief Executive Officer, Global Brokerage – Americas since 2024, Chief Executive Officer – U.S.
All executive officers are appointed annually and serve at the discretion of our board of directors. 31 Part II
Bloom, we have employed each such person principally in management capacities for more than the past five years. All executive officers are appointed annually and serve at the discretion of our board of directors. 33 Part II
Removed
Cavaness 62 Chairman, Americas Specialty (Wholesale Brokerage) since 2024, Corporate Vice President since 2000, President of our Wholesale Brokerage Operation since 1997 - 2024 Douglas K. Howell 62 Corporate Vice President, Chief Financial Officer since 2003 Scott R.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(c) Issuer Purchases of Equity Securities The following table shows the purchases of our common stock made by or on behalf of us or any “affiliated purchaser” (as such term is defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended) of us for each fiscal month in the three-month period ended December 31, 2023: Period Total Number of Shares Purchased (1) Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (3) (4) October 1 through October 31, 2023 1,177 $ 234.06 — $ 1,500 November 1 through November 30, 2023 24,020 242.81 — 1,500 December 1 through December 31, 2023 16,461 224.95 — 1,500 Total 41,658 $ 235.50 — (1) Amounts in this column include shares of our common stock purchased by the trustees of trusts established under our Deferred Equity Participation Plan (which we refer to as the DEPP), our Deferred Cash Participation Plan (which we refer to as the DCPP) and our Supplemental Savings and Thrift Plan (which we refer to as the Supplemental Plan), respectively.
Biggest change(c) Issuer Purchases of Equity Securities The following table shows the purchases of our common stock made by or on behalf of us or any “affiliated purchaser” (as such term is defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended) of us for each fiscal month in the three-month period ended December 31, 2024: Period Total Number of Shares Purchased (1) Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (3) (4) October 1 through October 31, 2024 3,964 $ 286.33 — $ 1,500 November 1 through November 30, 2024 19,965 290.37 — 1,500 December 1 through December 31, 2024 36,335 283.71 — 1,500 Total 60,264 286.09 — (1) Amounts in this column include shares of our common stock purchased by the trustees of trusts established under our Deferred Equity Participation Plan (which we refer to as the DEPP), our Deferred Cash Participation Plan (which we refer to as the DCPP) and our Supplemental Savings and Thrift Plan (which we refer to as the Supplemental Plan), respectively.
The Supplemental Plan is an unfunded, non-qualified deferred compensation plan that allows certain highly compensated employees to defer compensation, including company match amounts, on a before-tax basis or after-tax basis.
The Supplemental Plan is an unfunded, non-qualified deferred compensation plan that allows certain highly compensated employees to defer compensation, including match amounts by the Company, on a before-tax basis or after-tax basis.
(2) The average price paid per share is calculated on a settlement basis and does not include commissions. 32 (3) Effective July 28, 2021, the board of directors approved a common stock repurchase plan of up to $1.5 billion of common stock.
(2) The average price paid per share is calculated on a settlement basis and does not include commissions. 34 (3) Effective July 28, 2021, the board of directors approved a common stock repurchase plan of up to $1.5 billion of common stock.
For the fourth quarter of 2023, we instructed the trustee for the DEPP and the DCPP to reinvest dividends on shares of our common stock held by these trusts and to purchase our common stock using cash that we contributed to the DCPP related to 2023 awards under the DCPP.
For the fourth quarter of 2024, we instructed the trustee for the DEPP and the DCPP to reinvest dividends on shares of our common stock held by these trusts and to purchase our common stock using cash that we contributed to the DCPP related to 2024 awards under the DCPP.
Under sub‑plans of the DEPP for certain production staff, the plan generally provides for vesting and/or distributions no sooner than five years from the date of awards, although certain awards vest and/or distribute after the earlier of fifteen years or the participant reaching age 65. See Note 11 to our 2023 consolidated financial statements for more information regarding the DEPP.
Under sub‑plans of the DEPP for certain production staff, the plan generally provides for vesting and/or distributions no sooner than five years from the date of awards, although certain awards vest and/or distribute after the earlier of fifteen years or the participant reaching age 65. See Note 10 to our 2024 consolidated financial statements for more information regarding the DEPP.
Item 5. Market for the Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities. Our common stock is listed on the New York Stock Exchange, trading under the symbol “AJG.” As of January 31, 2024, there were approximately 1,000 holders of record of our common stock.
Item 5. Market for the Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities. Our common stock is listed on the New York Stock Exchange, trading under the symbol “AJG.” As of January 31, 2025, there were approximately 2,000 holders of record of our common stock.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. [Reserved] 33 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 33 - 66 Item 7A. Quantitative and Qualitative Disclosure about Market Risk 66 - 68 Item 8. Financial Statements and Supplementary Data 69 - 129
Biggest changeItem 6. [Reserved] 35 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 35 - 67 Item 7A. Quantitative and Qualitative Disclosure about Market Risk 67 - 69 Item 8. Financial Statements and Supplementary Data 70 - 126

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

198 edited+41 added−96 removed123 unchanged
Biggest changeFor the corporate segment, the clean energy related adjustments are described on page 54 . 35 Reconciliation of Non-GAAP Measures - Pre-tax Earnings and Diluted Net Earnings per Shar e (In millions except share and per share data) Earnings (Loss) Before Income Taxes Provision (Benefit) for Income Taxes Net Earnings (Loss) Net Earnings (Loss) Attributable to Noncontrolling Interests Net Earnings (Loss) Attributable to Controlling Interests Diluted Net Earnings (Loss) per Share Year Ended Dec 31, 2023 Brokerage, as reported $ 1,571.0 $ 401.6 $ 1,169.4 $ 6.3 $ 1,163.1 $ 5.30 Net gains on divestitures (9.6 ) (2.4 ) (7.2 ) — (7.2 ) (0.03 ) Acquisition integration 243.7 59.2 184.5 — 184.5 0.84 Workforce and lease termination 63.8 15.8 48.0 — 48.0 0.22 Acquisition related adjustments 370.5 91.7 278.8 — 278.8 1.27 Amortization of intangible assets 523.6 131.3 392.3 — 392.3 1.79 Brokerage, as adjusted $ 2,763.0 $ 697.2 $ 2,065.8 $ 6.3 $ 2,059.5 $ 9.39 Risk Management, as reported $ 209.3 $ 55.3 $ 154.0 $ — $ 154.0 $ 0.70 Net gains on divestitures (0.4 ) (0.1 ) (0.3 ) — (0.3 ) — Acquisition integration 1.0 0.3 0.7 — 0.7 — Workforce and lease termination 3.4 0.9 2.5 — 2.5 0.01 Acquisition related adjustments 0.5 0.1 0.4 — 0.4 — Amortization of intangible assets 7.7 2.1 5.6 — 5.6 0.03 Risk Management, as adjusted $ 221.5 $ 58.6 $ 162.9 $ — $ 162.9 $ 0.74 Corporate, as reported $ (595.2 ) $ (237.8 ) $ (357.4 ) $ (9.8 ) $ (347.6 ) $ (1.58 ) Transaction-related costs 22.6 4.9 17.7 — 17.7 0.08 Legal and tax related 48.0 21.8 26.2 — 26.2 0.12 Clean energy related 12.0 1.1 10.9 7.6 3.3 0.01 Corporate, as adjusted $ (512.6 ) $ (210.0 ) $ (302.6 ) $ (2.2 ) $ (300.4 ) $ (1.37 ) Year Ended Dec 31, 2022 Brokerage, as reported $ 1,596.5 $ 394.7 $ 1,201.8 $ 4.4 $ 1,197.4 $ 5.58 Net gains on divestitures (12.1 ) (2.6 ) (9.5 ) — (9.5 ) (0.05 ) Acquisition integration 167.9 35.2 132.7 — 132.7 0.62 Workforce and lease termination 51.4 11.2 40.2 — 40.2 0.19 Acquisition related adjustments 77.0 21.0 56.0 — 56.0 0.26 Amortization of intangible assets 448.7 106.4 342.3 — 342.3 1.59 Effective income tax rate impact — 26.0 (26.0 ) — (26.0 ) (0.13 ) Levelized foreign currency translation (19.1 ) (5.3 ) (13.8 ) — (13.8 ) (0.06 ) Brokerage, as adjusted $ 2,310.3 $ 586.6 $ 1,723.7 $ 4.4 $ 1,719.3 $ 8.00 Risk Management, as reported $ 157.2 $ 41.4 $ 115.8 $ — $ 115.8 $ 0.54 Net gains on divestitures (0.9 ) (0.3 ) (0.6 ) — (0.6 ) — Acquisition integration 1.8 0.4 1.4 — 1.4 0.01 Workforce and lease termination 6.5 1.7 4.8 — 4.8 0.02 Acquisition related adjustments (7.8 ) (2.0 ) (5.8 ) — (5.8 ) (0.03 ) Amortization of intangible assets 6.2 1.6 4.6 — 4.6 0.02 Levelized foreign currency translation (0.6 ) 0.1 (0.7 ) — (0.7 ) — Risk Management, as adjusted $ 162.4 $ 42.9 $ 119.5 $ — $ 119.5 $ 0.56 Corporate, as reported $ (426.7 ) $ (225.1 ) $ (201.6 ) $ (2.6 ) $ (199.0 ) $ (0.93 ) Transaction-related costs 33.4 2.7 30.7 — 30.7 0.14 Income tax related (5.0 ) 45.2 (50.2 ) — (50.2 ) (0.23 ) Corporate, as adjusted $ (398.3 ) $ (177.2 ) $ (221.1 ) $ (2.6 ) $ (218.5 ) $ (1.02 ) 36 Acquisition of My Plan Manager, Cadence Insurance, Eastern Insurance and Buck On December 6, 2023, we acquired all of the issued and outstanding shares of My Plan Manager.
Biggest changeFor the corporate segment, the clean energy related adjustments are described on page 56 . 37 Reconciliation of Non-GAAP Measures - Pre-tax Earnings and Diluted Net Earnings per Shar e (In millions except share and per share data) Earnings (Loss) Before Income Taxes Provision (Benefit) for Income Taxes Net Earnings (Loss) Net Earnings (Loss) Attributable to Noncontrolling Interests Net Earnings (Loss) Attributable to Controlling Interests Diluted Net Earnings (Loss) per Share Year Ended Dec 31, 2024 Brokerage, as reported $ 2,259.3 $ 573.6 $ 1,685.7 $ 7.7 $ 1,678.0 $ 7.46 Net (gains) on divestitures (24.2 ) (6.2 ) (18.0 ) — (18.0 ) (0.08 ) Acquisition integration 190.2 48.3 141.9 — 141.9 0.63 Workforce and lease termination 118.9 30.3 88.6 — 88.6 0.39 Acquisition related adjustments 85.5 21.6 63.9 (3.0 ) 66.9 0.28 Amortization of intangible assets 651.0 165.2 485.8 — 485.8 2.16 Brokerage, as adjusted $ 3,280.7 $ 832.8 $ 2,447.9 $ 4.7 $ 2,443.2 $ 10.84 Risk Management, as reported $ 237.6 $ 63.1 $ 174.5 $ — $ 174.5 $ 0.78 Net (gains) on divestitures (0.1 ) — (0.1 ) — (0.1 ) — Acquisition integration 2.9 0.8 2.1 — 2.1 0.01 Workforce and lease termination 8.1 2.2 5.9 — 5.9 0.03 Acquisition related adjustments 0.3 0.1 0.2 — 0.2 — Amortization of intangible assets 13.8 3.9 9.9 — 9.9 0.04 Risk Management, as adjusted $ 262.6 $ 70.1 $ 192.5 $ — $ 192.5 $ 0.86 Corporate, as reported $ (622.1 ) $ (232.3 ) $ (389.8 ) $ — $ (389.8 ) $ (1.74 ) Transaction-related costs 32.2 5.9 26.3 — 26.3 0.12 Legal and tax related — (3.5 ) 3.5 — 3.5 0.02 Clean energy related (2.3 ) (0.6 ) (1.7 ) — (1.7 ) (0.01 ) Corporate, as adjusted $ (592.2 ) $ (230.5 ) $ (361.7 ) $ — $ (361.7 ) $ (1.61 ) Year Ended Dec 31, 2023 Brokerage, as reported $ 1,571.0 $ 401.6 $ 1,169.4 $ 6.3 $ 1,163.1 $ 5.30 Net (gains) on divestitures (9.6 ) (2.4 ) (7.2 ) — (7.2 ) (0.03 ) Acquisition integration 243.7 59.2 184.5 — 184.5 0.84 Workforce and lease termination 63.8 15.8 48.0 — 48.0 0.22 Acquisition related adjustments 370.5 91.7 278.8 — 278.8 1.27 Amortization of intangible assets 523.6 131.3 392.3 — 392.3 1.79 Effective income tax rate impact — 4.9 (4.9 ) — (4.9 ) (0.02 ) Levelized foreign currency translation (10.9 ) (2.6 ) (8.3 ) — (8.3 ) (0.04 ) Brokerage, as adjusted $ 2,752.1 $ 699.5 $ 2,052.6 $ 6.3 $ 2,046.3 $ 9.33 Risk Management, as reported $ 209.3 $ 55.3 $ 154.0 $ — $ 154.0 $ 0.70 Net (gains) on divestitures (0.4 ) (0.1 ) (0.3 ) — (0.3 ) — Acquisition integration 1.0 0.3 0.7 — 0.7 — Workforce and lease termination 3.4 0.9 2.5 — 2.5 0.01 Acquisition related adjustments 0.5 0.1 0.4 — 0.4 — Amortization of intangible assets 7.7 2.1 5.6 — 5.6 0.03 Levelized foreign currency translation (0.3 ) (0.1 ) (0.2 ) — (0.2 ) — Risk Management, as adjusted $ 221.2 $ 58.5 $ 162.7 $ — $ 162.7 $ 0.74 Corporate, as reported $ (595.2 ) $ (237.8 ) $ (357.4 ) $ (9.8 ) $ (347.6 ) $ (1.58 ) Transaction-related costs 22.6 4.9 17.7 — 17.7 0.08 Legal and tax related 48.0 21.8 26.2 — 26.2 0.12 Clean energy related 12.0 1.1 10.9 7.6 3.3 0.01 Corporate, as adjusted $ (512.6 ) $ (210.0 ) $ (302.6 ) $ (2.2 ) $ (300.4 ) $ (1.37 ) 38 Acquisition of AssuredPartners On December 7, 2024, we signed a definitive agreement to acquire all of the issued and outstanding stock of Dolphin Topco, Inc., the holding company of AssuredPartners, Inc., a Delaware corporation (together with its subsidiaries, “AssuredPartners”) for gross consideration of $13.45 billion.
These measures for the brokerage and risk management segments provide a meaningful representation of our operating performance for the overall business and provide a meaningful way to measure our financial performance on an ongoing basis. 39 • Adjusted EBITDAC and Adjusted EBITDAC Margin - Adjusted EBITDAC is EBITDAC adjusted to exclude net gains on divestitures, acquisition integration costs, workforce related charges, lease termination related charges, acquisition related adjustments, transaction related costs, legal and tax related costs, and the period-over-period impact of foreign currency translation, as applicable and Adjusted EBITDAC margin is Adjusted EBITDAC divided by total adjusted revenues (defined above).
These measures for the brokerage and risk management segments provide a meaningful representation of our operating performance for the overall business and provide a meaningful way to measure our financial performance on an ongoing basis. • Adjusted EBITDAC and Adjusted EBITDAC Margin - Adjusted EBITDAC is EBITDAC adjusted to exclude net gains on divestitures, acquisition integration costs, workforce related charges, lease termination related charges, acquisition related adjustments, transaction related costs, legal and tax related costs, and the period-over-period impact of foreign currency translation, as applicable and Adjusted EBITDAC margin is Adjusted EBITDAC divided by total adjusted revenues (defined above).
Interest rates for SOFR loans and loans in currencies other than U.S. dollars under the Credit Agreement will be based on, as applicable, a SOFR 59 Daily Floating Rate, Term SOFR, Alternative Currency Daily Rate or Alternative Currency Term Rate, as defined in the Credit Agreement, plus a margin of 0.775% to 1.375%, depending on the rating of our long-term senior unsecured debt.
Interest rates for SOFR loans and loans in currencies other than U.S. dollars under the Credit Agreement will be based on, as applicable, a SOFR Daily Floating Rate, Term SOFR, Alternative Currency Daily Rate or Alternative Currency Term Rate, as defined in the Credit Agreement, plus a margin of 0.775% to 1.375%, depending on the rating of our long-term senior unsecured debt.
In reviewing intangible assets, if the 45 undiscounted future cash flows were less than the carrying amount of the respective (or underlying) asset, an indicator of impairment would exist and further analysis would be required to determine whether or not a loss would need to be charged against current period earnings as a component of amortization expense.
In reviewing intangible assets, if the undiscounted future cash flows were less than the carrying amount of the respective (or underlying) asset, an indicator of impairment would exist and further analysis would be required to determine whether or not a loss would need to be charged against current period earnings as a component of amortization expense.
Most of our purchase obligations are related to purchases of information technology services, marketing arrangements or other service contracts. We had no other cash requirements from known contractual obligations and commitments that have, or are reasonably likely to have, a current or 62 future material effect on the Company’s financial condition, results of operations, or liquidity.
Most of our purchase obligations are related to purchases of information technology services, marketing arrangements or other service contracts. We had no other cash requirements from known contractual obligations and commitments that have, or are reasonably likely to have, a current or future material effect on the Company’s financial condition, results of operations, or liquidity.
Judgments and Uncertainties We estimate the fair value of our reporting units considering the use of various valuation techniques, with the primary technique being an income approach (discounted cash flow method) and another technique being a market approach (guideline public company method), which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy.
Judgments and Uncertainties We estimate the fair value of our reporting units considering the use of various valuation techniques, with the primary technique being an income approach (discounted cash flow method) and another technique being a market approach (guideline public 65 company method), which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy.
However, if actual results are not consistent with our estimates and assumptions used to calculate estimated future cash flows, we may be exposed to impairment losses that could be material. 65 Earnout Obligations Description Substantially all of the purchase agreements related to the acquisitions we do contain provisions for potential earnout obligations.
However, if actual results are not consistent with our estimates and assumptions used to calculate estimated future cash flows, we may be exposed to impairment losses that could be material. Earnout Obligations Description Substantially all of the purchase agreements related to the acquisitions we do contain provisions for potential earnout obligations.
In addition, corporate includes the tax expense related to partial taxation of foreign earnings, nondeductible executive compensation and entertainment expenses, the tax benefit from vesting of employee equity awards, as well as other permanent or discrete tax items not reflected in the provision for income taxes in the brokerage and risk management segments.
In addition, corporate includes the tax expense related to partial taxation of foreign earnings, nondeductible executive compensation and entertainment expenses, the tax benefit from vesting of employee 56 equity awards, as well as other permanent or discrete tax items not reflected in the provision for income taxes in the brokerage and risk management segments.
On November 15, 2022, we filed a second shelf registration statement on Form S-4 with the SEC, registering 7.0 million shares of our common stock that we may offer and issue from time to time in connection with future acquisitions of other businesses, assets or securities.
On November 15, 2022, we filed a second shelf registration statement on Form S-4 with the SEC, registering 7.0 million shares of our common stock that we may offer and issue 61 from time to time in connection with future acquisitions of other businesses, assets or securities.
For the risk management segment, organic change in fee revenues excludes the first twelve months of such revenues generated from acquisitions and such revenues related to divested operations in each year presented. In addition, change in organic growth in fee revenues excludes the period-over-period impact of foreign currency translation to improve the comparability of our results between periods.
For the risk management segment, organic change in fee revenues excludes the first twelve months of such revenues generated from acquisitions and such revenues related to divested operations in each year 41 presented. In addition, change in organic growth in fee revenues excludes the period-over-period impact of foreign currency translation to improve the comparability of our results between periods.
Beginning with the match paid in 2021, the amount matched by the company will be discretionary and annually determined by management. Employees must be employed and eligible for the plan on the last day of the plan year to receive a matching 61 contribution, subject to certain exceptions enumerated in the plan document.
Beginning with the match paid in 2021, the amount matched by the Company will be discretionary and annually determined by management. Employees must be employed and eligible for the plan on the last day of the plan year to receive a matching contribution, subject to certain exceptions enumerated in the plan document.
Our brokerage segment generates revenues by: (i) Identifying, negotiating and placing all forms of insurance or coverage, as well as providing data analytics, risk-shifting, risk-sharing and risk-mitigation consulting services, principally related to property/casualty, life, health, welfare and disability insurance.
Our brokerage segment generates revenues by: (i) Identifying, negotiating and placing all forms of insurance coverage, as well as providing data analytics, risk-shifting, risk-sharing and risk-mitigation consulting services, principally related to property/casualty, life, health, welfare and disability insurance.
We also provide these services through, or in conjunction with, other unrelated agents and brokers, consultants and management advisors; (ii) Identifying, negotiating and placing all forms of reinsurance coverage, as well as providing capital markets services, including acting as underwriter, with respect to insurance linked securities, weather derivatives, capital raising and selected merger and acquisition advisory activities; (iii) Acting as an agent or broker for multiple underwriting enterprises by providing services such as sales, marketing, selecting, negotiating, underwriting, servicing and placing insurance coverage on their behalf; 40 (iv) Providing consulting services related to health and welfare benefits, voluntary benefits, executive benefits, compensation, retirement planning, institutional investment and fiduciary, actuarial, compliance, private insurance exchange, human resource technology, communications and benefits administration; and (v) Providing management and administrative services to captives, pools, risk-retention groups, healthcare exchanges, small underwriting enterprises, such as accounting, claims and loss processing assistance, feasibility studies, actuarial studies, data analytics and other administrative services.
We also provide these services through, or in conjunction with, other unrelated agents and brokers, consultants and management advisors; (ii) Identifying, negotiating and placing all forms of reinsurance coverage, as well as providing capital markets services, including acting as underwriter, with respect to insurance linked securities, weather derivatives, capital raising and selected merger and acquisition advisory activities; (iii) Acting as an agent or broker for multiple underwriting enterprises by providing services such as sales, marketing, selecting, negotiating, underwriting, servicing and placing insurance coverage on their behalf; (iv) Providing consulting services related to health and welfare benefits, voluntary benefits, executive benefits, compensation, retirement planning, institutional investment and fiduciary, actuarial, compliance, private insurance exchange, human resources technology, communications and benefits administration; and (v) Providing management and administrative services to captives, pools, risk-retention groups, healthcare exchanges, small underwriting enterprises, such as accounting, claims and loss processing assistance, feasibility studies, actuarial studies, data analytics and other administrative services.
However, we could 64 be required to evaluate the recoverability of goodwill outside of the required annual assessment if, among other things, we experience disruptions to the business, unexpected significant declines in operating results, divestiture of a significant component of the business or a sustained decline in market capitalization.
However, we could be required to evaluate the recoverability of goodwill outside of the required annual assessment if, among other things, we experience disruptions to the business, unexpected significant declines in operating results, divestiture of a significant component of the business or a sustained decline in market capitalization.
Our cash flows from operating activities are primarily derived from our earnings from operations, as adjusted, for our non-cash expenses, which include depreciation, amortization, change in estimated acquisition earnout payables, deferred compensation, restricted stock, and stock-based and other non-cash compensation expenses.
Our cash flows from operating activities are primarily derived from our earnings from operations, as adjusted, for our non-cash expenses, which include depreciation, amortization, change in estimated acquisition earnout payables, deferred compensation, 57 restricted stock, and stock-based and other non-cash compensation expenses.
The fair value of these earnout obligations is based on the present value of the expected future payments to be made to the sellers of the acquired entities in accordance with the provisions outlined in the respective purchase agreements.
The fair value of these earnout obligations is based on the present value of 47 the expected future payments to be made to the sellers of the acquired entities in accordance with the provisions outlined in the respective purchase agreements.
As previously disclosed, our IRC 831(b) (or “micro-captive”) advisory services business has been under audit by the IRS since 2013. Among other matters, the IRS is investigating whether we have been acting as a tax shelter promoter in connection with these operations. Additionally, the IRS is conducting a criminal investigation related to IRC 831(b) micro-captive underwriting 46 enterprises.
As previously disclosed, our IRC 831(b) (or “micro-captive”) advisory services business has been under a promoter investigation by the IRS since 2013. Among other matters, the IRS is investigating whether we have been acting as a tax shelter promoter in connection with these operations. Additionally, the IRS is conducting a criminal investigation related to IRC 831(b) micro-captive underwriting enterprises.
Proceeds from the issuance of our common stock related to these plans have contributed favorably to net cash provided by financing activities in the years ended December 31, 2023 and 2022, and we believe this favorable trend will continue in the foreseeable future. We have a qualified contributory savings and thrift 401(k) plan covering the majority of our domestic employees.
Proceeds from the issuance of our common stock related to these plans have contributed favorably to net cash provided by financing activities in the years ended December 31, 2024 and 2023, and we believe this favorable trend will continue in the foreseeable future. We have a qualified contributory savings and thrift 401(k) plan covering the majority of our domestic employees.
Our cash flows from operations, borrowing availability and overall liquidity are subject to risks and uncertainties. See “Information Concerning Forward-Looking Statements” at the beginning of this report. Contractual Obligations Our contractual obligations and commitments as of December 31, 2023 are comprised of principal payments on debt, interest payments on debt, operating leases, pension benefit plan and purchase obligations.
Our cash flows from operations, borrowing availability and overall liquidity are subject to risks and uncertainties. See “Information Concerning Forward-Looking Statements” at the beginning of this report. Contractual Obligations Our contractual obligations and commitments as of December 31, 2024 are comprised of principal payments on debt, interest payments on debt, operating leases, pension benefit plan and purchase obligations.
Adjusted Non-GAAP presentation - We believe that the adjusted non-GAAP presentation of our 2023 and 2022 information, presented on the following pages, provides stockholders and other interested persons with useful information regarding certain financial metrics that may assist such persons in analyzing our operating results as they develop a future earnings outlook for us.
Adjusted Non-GAAP presentation - We believe that the adjusted non-GAAP presentation of our 2024 and 2023 information, presented on the following pages, provides stockholders and other interested persons with useful information regarding certain financial metrics that may assist such persons in analyzing our operating results as they develop a future earnings outlook for us.
In 2023, we expanded, and expect to continue to expand, our international operations through both acquisitions and organic growth. We generate approximately 64% of our revenues for the combined brokerage and risk management segments domestically, with the remaining 36% generated internationally, primarily in the Australia, Canada, New Zealand and the U.K. (based on 2023 revenues).
In 2024, we expanded, and expect to continue to expand, our international operations through both acquisitions and organic growth. We generate approximately 64% of our revenues for the combined brokerage and risk management segments domestically, with the remaining 36% generated internationally, primarily in Australia, Canada, New Zealand and the U.K. (based on 2024 revenues).
The Employee Retirement Security Act of 1974, as amended (which we refer to as ERISA), could impose a minimum funding requirement for our plan. We were not required to make any minimum contributions to the plan for the 2023 and 2022 plan years. Funding requirements are based on the plan being frozen and the aggregate amount of our historical funding.
The Employee Retirement Security Act of 1974, as amended (which we refer to as ERISA), could impose a minimum funding requirement for our plan. We were not required to make any minimum contributions to the plan for the 2024 and 2023 plan years. Funding requirements are based on the plan being frozen and the aggregate amount of our historical funding.
U.S. Federal Income Tax Law Changes Items Impacting the Company Going Forward Alternative Minimum Tax Credit - The IRA enacted a book-based Corporate Alternative Minimum Tax (which we refer to as CAMT) for years beginning after 2022. The CAMT imposes a minimum 15% cash tax on adjusted book income before general business credits.
Federal Income Tax Law Changes Items Impacting the Company Going Forward Alternative Minimum Tax Credit - The IRA enacted a book-based Corporate Alternative Minimum Tax (which we refer to as CAMT) for years beginning after 2022. The CAMT imposes a minimum 15% cash tax on adjusted book income before general business credits.
Changes in financial projections, market participant assumptions for revenue growth and/or profitability, or the risk-adjusted discount rate, would result in a change in the fair value of recorded earnout obligations. See Note 3 to our 2023 consolidated financial statements for additional discussion on our 2023 business combinations.
Changes in financial projections, market participant assumptions for revenue growth and/or profitability, or the risk-adjusted discount rate, would result in a change in the fair value of recorded earnout obligations. See Note 3 to our 2024 consolidated financial statements for additional discussion on our 2024 business combinations.
Effect if Actual Results Differ From Assumptions We have not made material changes in the accounting methodology used to evaluate impairment of goodwill during the last three years. During fiscal 2023, 2022 and 2021, all of our material reporting units passed the impairment analysis.
Effect if Actual Results Differ From Assumptions We have not made material changes in the accounting methodology used to evaluate impairment of goodwill during the last three years. During fiscal 2024, 2023 and 2022, all of our material reporting units passed the impairment analysis.
For significant acquisitions we may use independent third-party valuation specialists to assist us in determining the fair value of assets acquired and liabilities assumed. See Note 3 to our 2023 consolidated financial statements for additional discussion on our 2023 business combinations.
For significant acquisitions we may use independent third-party valuation specialists to assist us in determining the fair value of assets acquired and liabilities assumed. See Note 3 to our 2024 consolidated financial statements for additional discussion on our 2024 business combinations.
Based on the proportion of additional services we provide in each period after the effective date of the insurance contract, including an appropriate estimate of our profit margin, we recognize approximately 15% of our commission and fee revenues in the first three months, and the remaining 5% thereafter.
Based on the proportion of additional services we provide in each period after the effective date of the insurance contract, including an appropriate estimate of our profit margin, we recognize approximately 10% of our commission and fee revenues in the first three months, and the remaining 5% thereafter.
In addition, please see “Information Regarding Non-GAAP Measures and Other” beginning on page 38 for a reconciliation of the non-GAAP measures for adjusted total revenues, organic commission, fee and supplemental revenues and adjusted EBITDAC to the comparable GAAP measures, as well as other important information regarding these measures.
In addition, please see “Information Regarding Non-GAAP Measures and Other” beginning on page 40 for a reconciliation of the non-GAAP measures for adjusted total revenues, organic commission, fee and supplemental revenues and adjusted EBITDAC to the comparable GAAP measures, as well as other important information regarding these measures.
During the years ended December 31, 2023 and 2022, we did not repurchase shares of our common stock. The plan authorizes the repurchase of our common stock at such times and prices, as we may deem advantageous, in transactions on the open market or in privately negotiated transactions.
During the years ended December 31, 2024 and 2023, we did not repurchase shares of our common stock. The plan authorizes the repurchase of our common stock at such times and prices, as we may deem advantageous, in transactions on the open market or in privately negotiated transactions.
Change in estimated acquisition earnout payables - The change in the expense from the change in estimated acquisition earnout payables in 2023 compared to 2022 was due primarily to adjustments made to the estimated fair value of earnout obligations related to revised assumptions due to rising interest rates and increased market volatility and projections of future performance.
Change in estimated acquisition earnout payables - The change in the expense from the change in estimated acquisition earnout payables in 2024 compared to 2023 was due primarily to adjustments made to the estimated fair value of earnout obligations related to revised assumptions due to rising interest rates and increased market volatility and projections of future performance.
The Senior Notes, Note Purchase Agreements, the Credit Agreement and the Premium Financing Debt Facility contain various financial covenants that require us to maintain specified financial ratios. We were in compliance with these covenants as of December 31, 2023.
The Senior Notes, Note Purchase Agreements, the Credit Agreement and the Premium Financing Debt Facility contain various financial covenants that require us to maintain specified financial ratios. We were in compliance with these covenants as of December 31, 2024.
The interest rates on Facility B are Interbank rates, which vary by tranche, duration and currency, plus a margin of 1.500% and 1.850% for the AU$ and NZ$ tranches, respectively. The interest rates on Facilities C and D are 30 day Interbank rates, plus a margin of 0.830% and 0.990% for the AU$ and NZ$ tranches, respectively.
The interest rates on Facility B are Interbank rates, which vary by tranche, duration and currency, plus a margin of 1.400% and 1.850% for the AU$ and NZ$ tranches, respectively. The interest rates on Facilities C and D are 30 day Interbank rates, plus a margin of 0.830% and 0.990% for the AU$ and NZ$ tranches, respectively.
During the quarter ended December 31, 2023, we did not sell shares of our common stock under the program. Common Stock Issuances - Another source of liquidity to us is the issuance of our common stock pursuant to our stock option and employee stock purchase plans.
During the quarter ended December 31, 2024, we did not sell shares of our common stock under the program. Common Stock Issuances - Another source of liquidity to us is the issuance of our common stock pursuant to our stock option and employee stock purchase plans.
Amortization - The increase in amortization in 2023 compared to 2022 was primarily due to the impact of amortization expense of intangible assets associated with acquisitions completed in 2023 and 2022, partially offset by the impact of acquisition valuation true-ups recorded in 2023 relating to acquisitions made in 2022.
Amortization - The increase in amortization in 2024 compared to 2023 was primarily due to the impact of amortization expense of intangible assets associated with acquisitions completed in 2024 and 2023, partially offset by the impact of acquisition valuation true-ups recorded in 2024 relating to acquisitions made in 2023.
Whether we are paid a commission or a fee, the vast majority of our services are associated with the placement of an insurance (or insurance-like) contract. Accordingly, we recognize approximately 80% of our commission and fee revenues on the effective date of the underlying insurance contract.
Whether we are paid a commission or a fee, the vast majority of our services are associated with the placement of an insurance (or insurance-like) contract. Accordingly, we recognize approximately 85% of our commission and fee revenues on the effective date of the underlying insurance contract.
The terms of our Premium Financing Debt Facility include various financial covenants, including covenants that require us to maintain specified financial ratios. We were in compliance with these covenants as of December 31, 2023.
The terms of our Premium Financing Debt Facility include various financial covenants, including covenants that require us to maintain specified financial ratios. We were in compliance with these covenants as of December 31, 2024.
The Credit Agreement also contains customary representations and warranties and affirmative and negative covenants, including financial covenants, as well as customary events of default, with corresponding grace periods, including, without limitation, payment defaults, cross-defaults to other agreements evidencing indebtedness and bankruptcy-related defaults. We were in compliance with these covenants as of December 31, 2023.
The Credit Agreement also contains customary representations and warranties and affirmative and negative covenants, including financial covenants, as well as customary events of default, with corresponding grace periods, including, without limitation, 60 payment defaults, cross-defaults to other agreements evidencing indebtedness and bankruptcy-related defaults. We were in compliance with these covenants as of December 31, 2024.
We have been advised that we are not a target of the criminal investigation. We are fully cooperating with both matters. Risk Management The risk management segment accounted for 14% of our revenue in 2023.
We have been advised that we are not a target of the criminal investigation. We are fully cooperating with both matters. Risk Management The risk management segment accounted for 14% of our revenue in 2024.
At December 31, 2023, 6.2 million shares remained available for issuance under this registration statement. Common Stock Repurchases - We have in place a common stock repurchase plan approved by our board of directors in July 2021 that authorizes the repurchase of up to $1.5 billion of common stock.
At December 31, 2024, 5.6 million shares remained available for issuance under this registration statement. Common Stock Repurchases - We have in place a common stock repurchase plan approved by our board of directors in July 2021 that authorizes the repurchase of up to $1.5 billion of common stock.
Generally, we utilize operating margin assumptions based on future expectations, operating margins historically realized in the reporting units’ industries and industry marketplace valuation multiples. See Intangible Assets in Notes 1 and 7 to our 2023 consolidated financial statements. Our impairment analysis contains uncertainties due to uncontrollable events that could positively or negatively impact the anticipated future economic and operating conditions.
Generally, we utilize operating margin assumptions based on future expectations, operating margins historically realized in the reporting units’ industries and industry marketplace valuation multiples. See Intangible Assets in Notes 1 and 6 to our 2024 consolidated financial statements. Our impairment analysis contains uncertainties due to uncontrollable events that could positively or negatively impact the anticipated future economic and operating conditions.
Based on the results of impairment reviews performed on amortizable intangible assets during 2023 and 2022, there were no impairments of amortizable assets related to the risk management segment.
Based on the results of impairment reviews performed on amortizable intangible assets during 2024 and 2023, there were no impairments of amortizable assets related to the risk management segment.
The annual fee for Facility B is 0.675% and 0.8325% for the undrawn commitments for the AU$ and NZ$ tranches, respectively. The annual fee for Facility C is 0.77% and for Facility D is 0.90% of the total commitments of the facilities.
The annual fee for Facility B is 0.56% and 0.8325% for the undrawn commitments for the AU$ and NZ$ tranches, respectively. The annual fee for Facility C is 0.77% and for Facility D is 0.90% of the total commitments of the facilities.
These letters of credit secure our self-insurance deductibles on our own insurance programs, allow certain of our captive operations to meet minimum statutory surplus requirements, lease security deposits and collateral related to premium and claim funds held in a fiduciary capacity. See Note 17 to our 2023 consolidated financial statements for additional discussion of these obligations and commitments.
These letters of credit secure our self-insurance deductibles on our own insurance programs, allow certain of our captive operations to meet minimum statutory surplus requirements, lease security deposits and collateral related to premium and claim funds held in a fiduciary capacity. See Note 15 to our 2024 consolidated financial statements for additional discussion of these obligations and commitments.
We record unrecognized tax benefit liabilities for known or anticipated tax issues based on our analysis of whether, and the extent to which, additional taxes will be due. See Income Taxes in Notes 1 and 19 to our 2023 consolidated financial statements. Judgments and Uncertainties Changes in projected future earnings could affect the recorded valuation allowances in the future.
We record unrecognized tax benefit liabilities for known or anticipated tax issues based on our analysis of whether, and the extent to which, additional taxes will be due. See Income Taxes in Notes 1 and 16 to our 2024 consolidated financial statements. Judgments and Uncertainties Changes in projected future earnings could affect the recorded valuation allowances in the future.
The increase in reimbursements in 2023 compared to 2022 was primarily due to a change in business mix that is processed internally versus using outside service partners. Interest income and other income - Interest income and other income primarily represents interest income earned on cash, cash equivalents and fiduciary cash.
The increase in reimbursements in 2024 compared to 2023 was primarily due to a change in business mix that is processed internally versus using outside service partners. 50 Interest income and other income - Interest income and other income primarily represents interest income earned on cash, cash equivalents and fiduciary cash.
The after-tax amounts related to the adjustments were computed using the normalized effective tax rate for each respective period. • Adjusted measures - We define these measures as revenues (for the brokerage segment), revenues before reimbursements (for the risk management segment), net earnings, compensation expense and operating expense, respectively, each adjusted to exclude the following, as applicable: o Net gains on divestitures, which are primarily net proceeds received related to sales of books of business and other divestiture transactions, such as the disposal of a business through sale or closure. 38 o Acquisition integration costs, which include costs related to certain large acquisitions (including Willis Re, the acquisition of Buck and the acquisitions of Cadence Insurance, Eastern Insurance and My Plan Manager), outside the scope of our usual tuck-in strategy, not expected to occur on an ongoing basis in the future once we fully assimilate the applicable acquisition.
The after-tax amounts related to the adjustments were computed using the normalized effective tax rate for each respective period. • Adjusted measures - We define these measures as revenues (for the brokerage segment), revenues before reimbursements (for the risk management segment), net earnings, compensation expense and operating expense, respectively, each adjusted to exclude the following, as applicable: o Net gains (losses) on divestitures, which are primarily net proceeds received related to sales of books of business and other divestiture transactions, such as the disposal of a business through sale or closure. o Acquisition integration costs, which include costs related to certain large acquisitions (including the acquisitions of the Willis Towers Watson plc treaty reinsurance brokerage operations (which we refer to as Willis Re), Buck, Cadence Insurance, Eastern Insurance and My Plan Manager), outside the scope of our usual tuck-in strategy, not expected to occur on an ongoing basis in the future once we fully assimilate the applicable acquisition.
We anticipate reporting an effective tax rate of approximately 24.5% to 26.5% in our brokerage segment based on known changes in tax rates in future periods. Net earnings attributable to noncontrolling interests - The amounts reported in this line for 2023 and 2022 include noncontrolling interest earnings of $6.3 million and $4.4 million, respectively.
We anticipate reporting an effective tax rate of approximately 24.5% to 26.5% in our brokerage segment based on known changes in tax rates in future periods. Net earnings attributable to noncontrolling interests - The amounts reported in this line for 2024 and 2023 include noncontrolling interest earnings of $7.7 million and $6.3 million, respectively.
We believe these favorable trends should continue for 2024, however, worsening economic conditions or a reversal in the number of workers employed, could cause fewer new liability and core workers’ compensation claims to arise in future quarters. Organic change in fee revenues was 16% in 2023 and 13% in 2022.
We believe these favorable trends should continue for 2025, however, worsening economic conditions or a reversal in the number of workers employed, could cause fewer new liability and core workers’ compensation claims to arise in future quarters. Organic change in fee revenues was 8% in 2024 and 16% in 2023.
Annualized revenues of businesses acquired in 2023 and 2022 totaled approximately $885.1 million and $246.5 million, respectively. In 2024, we expect to use new debt, our Credit Agreement (as defined below), cash from operations and our common stock, or a combination thereof to fund all of the acquisitions we complete.
Annualized revenues of businesses acquired in 2024 and 2023 totaled approximately $386.5 million and $885.1 million, respectively. In 2025, we expect to use new debt, our Credit Agreement (as defined below), cash from operations and our common stock, or a combination thereof to fund all of the acquisitions we complete.
Principal uses of the 2023 and 2022 borrowings under the Credit Agreement were to fund acquisitions, earnout payments related to acquisitions and general corporate purposes.
Principal uses of the 2024 and 2023 borrowings under the Credit Agreement were to fund acquisitions, earnout payments related to acquisitions and general corporate purposes.
Apart from commitments, guarantees, and contingencies, as disclosed herein and in Note 17 to our 2023 consolidated financial statements, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, results of operations or liquidity.
Apart from commitments, guarantees, and contingencies, as disclosed herein and in Note 15 to our 2024 consolidated financial statements, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, results of operations or liquidity.
Defined benefit pension plan obligations include estimates of our minimum funding requirements pursuant to the Employee Retirement Income Security Act and other regulations. We may make additional discretionary contributions. See Note 13 to our 2023 consolidated financial statements for additional information required to be disclosed relating to our defined benefit pension plan.
Defined benefit pension plan obligations include estimates of our minimum funding requirements pursuant to the Employee Retirement Income Security Act and other regulations. We may make additional discretionary contributions. See Note 12 to our 2024 consolidated financial statements for additional information required to be disclosed relating to our defined benefit pension plan.
At this time, we anticipate our clean energy investments will produce after-tax losses in 2024. 34 The following provides information that management believes is helpful when comparing revenues before reimbursements, net earnings, EBITDAC and diluted net earnings per share for 2023 and 2022.
At this time, we anticipate our clean energy investments will produce after-tax losses in 2025. 36 The following provides information that management believes is helpful when comparing revenues before reimbursements, net earnings, EBITDAC and diluted net earnings per share for 2024 and 2023.
The amounts initially recorded as earnout payables for our 2020 to 2023 acquisitions were measured at fair value as of the acquisition date and are primarily based upon the estimated future operating results of the acquired entities over a two- to three‑year period subsequent to the acquisition date.
The amounts initially recorded as earnout payables for our 2021 to 2024 acquisitions were measured at fair value as of the acquisition date and are primarily based upon the estimated future operating results of the acquired entities over a two- to three‑year period subsequent to the acquisition date.
In certain circumstances, we may have unused space and may seek to sublet such space to third parties, depending upon the demands for office space in the locations involved. See Note 15 to our 2023 consolidated financial statements for additional discussion of these operating lease obligations.
In certain circumstances, we may have unused space and may seek to sublet such space to third parties, depending upon the demands for office space in the locations involved. See Note 13 to our 2024 consolidated financial statements for additional discussion of these operating lease obligations.
The net adjustments in 2023, primarily include changes made to the estimated fair value of the Willis Re acquisition earnout and reflect updated assumptions as of December 31, 2023, including forecasted 2024 revenue projections based on January 1, 2024 reinsurance renewals.
The net adjustments in 2023, primarily included changes made to the estimated fair value of the Willis Re acquisition earnout and reflected updated assumptions as of December 31, 2023, including forecasted 2024 revenue projections based on January 1, 2024 reinsurance renewals.
For all of our acquisitions made in the period from 2020 to 2023 that contain potential earnout obligations, such obligations are measured at fair value as of the acquisition date and are included on that basis in the recorded purchase price consideration for the respective acquisition.
For all of our acquisitions made in the period from 2021 to 2024 that contain potential earnout obligations, such obligations are measured at fair value as of the acquisition date and are included on that basis in the recorded purchase price consideration for the respective acquisition.
In order to maintain leverage ratios and investment grade credit ratings or if liquidity concerns arise, we may be more likely to use common stock to fund acquisitions. Dispositions - During 2023 and 2022, we sold several books of business and recognized one-time gains of $10.0 million and $13.0 million, respectively.
In order to maintain leverage ratios and investment grade credit ratings or if liquidity concerns arise, we may be more likely to use common stock to fund acquisitions. Dispositions - During 2024 and 2023, we sold several books of business and recognized one-time gains of $24.3 million and $10.0 million, respectively.
In addition, these tables provide reconciliations to the most comparable GAAP measures for adjusted revenues, adjusted EBITDAC and adjusted diluted net earnings per share. Reconciliations of EBITDAC for the brokerage and risk management segments are provided on pages 42 and 48 of this filing.
In addition, these tables provide reconciliations to the most comparable GAAP measures for adjusted revenues, adjusted EBITDAC and adjusted diluted net earnings per share. Reconciliations of EBITDAC for the brokerage and risk management segments are provided on pages 44 and 50 of this filing.
Other Liquidity Matters Letters of Credit and Other Guarantees We have entered into a number of arrangements whereby our performance on certain obligations is guaranteed by a third party through the issuance of a letter of credit. We had total letters of credit outstanding of $21.2 million at December 31, 2023 and $13.0 million at December 31, 2022.
Other Liquidity Matters Letters of Credit and Other Guarantees We have entered into a number of arrangements whereby our performance on certain obligations is guaranteed by a third party through the issuance of a letter of credit. We had total letters of credit outstanding of $23.0 million as of December 31, 2024 and $21.2 million at December 31, 2023.
Premium Financing Debt Facility - On October 31, 2023, we entered into an amendment to our revolving loan facility (which we refer to as the Premium Financing Debt Facility) that provides funding for the three Australian (AU) and New Zealand (NZ) premium finance subsidiaries.
Premium Financing Debt Facility - On October 30, 2024, we entered into an amendment to our revolving loan facility (which we refer to as the Premium Financing Debt Facility) that provides funding for the three Australian (AU) and New Zealand (NZ) premium finance subsidiaries.
See Note 17 to our 2023 consolidated financial statements for additional discussion of these contractual obligations. Outlook - We believe that we have sufficient capital and access to additional capital to meet our short- and long-term cash flow needs. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with U.S.
See Note 15 to our 2024 consolidated financial statements for additional discussion of these contractual obligations. Outlook - We believe that we have sufficient capital and access to additional capital to meet our short- and long-term cash flow needs. 63 Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with U.S.
The Premium Financing Debt Facility is comprised of: (i) Facility B is separated into AU$390.0 million and NZ$25.0 million tranches (the NZ$ tranche will be decreased as of May 1, 2024 to NZ$10.0 million), (ii) Facility C, an AU$60.0 million equivalent multi‑currency overdraft tranche and (iii) Facility D, a NZ$15.0 million equivalent multi-currency overdraft tranche.
The Premium Financing Debt Facility is comprised of: (i) Facility B is separated into AU$410.0 million and NZ$25.0 million tranches (the AU$ tranche has been decreased as of February 1, 2025 to AU$390.0 million and the NZ$ tranche will be decreased as of May 1, 2025 to NZ$10.0 million), (ii) Facility C, an AU$60.0 million equivalent multi‑currency overdraft tranche and (iii) Facility D, a NZ$15.0 million equivalent multi-currency overdraft tranche.
Provision for income taxes - The brokerage segment’s effective tax rate in 2023 and 2022 was 25.6% and 24.7%, respectively. As of April 1, 2023, a U.K. corporate tax rate of 25% went into effect making the full year effective rate in the U.K. 23.5%.
Provision for income taxes - The brokerage segment’s effective tax rate in 2024 and 2023 was 25.4% and 25.6%, respectively. As of April 1, 2023, a U.K. corporate tax rate of 25% went into effect making the 2023 full year effective rate in the U.K. 23.5%.
Concurrently, on June 22, 2023, we paid off and terminated all of our obligations under the Second Amended and Restated Multicurrency Credit Agreement, dated as of June 7, 2019. There were $245.0 million of borrowings outstanding under the Credit Agreement at December 31, 2023.
Concurrently, on June 22, 2023, we paid off and terminated all of our obligations under the Second Amended and Restated Multicurrency Credit Agreement, dated as of June 7, 2019. There were no borrowings outstanding under the Credit Agreement at December 31, 2024.
Due to the outstanding borrowing and letters of credit, $1,443.4 million remained available for potential borrowings under the Credit Agreement at December 31, 2023. We use the Credit Agreement to post letters of credit and to borrow funds to supplement our operating cash flows from time to time.
Due to the outstanding borrowing and letters of credit, $1,689.1 million remained available for potential borrowings under the Credit Agreement at December 31, 2024. We use the Credit Agreement to post letters of credit and to borrow funds to supplement our operating cash flows from time to time.
Proceeds from the issuance of common stock under these plans were $120.2 million in 2023 and $123.1 million in 2022. On May 10, 2022, our stockholders approved the 2022 Long-Term Incentive Plan (which we refer to as the LTIP), which replaced our previous stockholder-approved 2017 Long-Term Incentive Plan.
Proceeds from the issuance of common stock under these plans were $162.5 million and $120.2 million in 2024 and 2023, respectively. On May 10, 2022, our stockholders approved the 2022 Long-Term Incentive Plan (which we refer to as the LTIP), which replaced our previous stockholder-approved 2017 Long-Term Incentive Plan.
In determining fair value, we estimate the acquired entity’s future performance using financial projections developed by management for the acquired entity and market participant assumptions that were derived for revenue growth and/or profitability. Revenue growth rates generally ranged from 5.0% to 20.0% for our 2023 acquisitions.
In determining fair value, we estimate the acquired entity’s future performance using financial projections developed by management for the acquired entity and market participant assumptions that were derived for revenue growth and/or profitability. Revenue growth rates generally ranged from 3.0% to 19.0% for our 2024 acquisitions.
Shelf Registration Statement - On March 8, 2021 we filed a shelf registration statement on Form S-3 with the SEC, registering the offer and sale from time to time, of an indeterminate amount of debt securities, guarantees, common stock, preferred stock, warrants, depositary shares, purchase contracts, or units.
Shelf Registration Statement - On February 12, 2024, we filed a shelf registration statement on Form S-3 with the SEC, registering the offer and sale from time to time, of an indeterminate amount of debt securities, guarantees, common stock, preferred stock, warrants, depositary shares, purchase contracts, or units.
We performed a qualitative impairment review on carrying value of our goodwill for all of our reporting units as of December 31, 2023 and no indicators of impairment were noted.
In October 2024, we performed a qualitative impairment review on carrying value of our goodwill for all of our reporting units and no indicators of impairment were noted as of December 31, 2024.
During 2023 and 2022, we recognized $0.5 million and $0.8 million, respectively, of expense related to the accretion of the discount recorded for earnout obligations in connection with our 2020 to 2023 acquisitions, respectively. During 2023, there were no net adjustments in the estimated fair value of earnout obligations related to projections of future performance for acquisitions.
During 2024 and 2023, we recognized $0.4 million and $0.5 million, respectively, of expense related to the accretion of the discount recorded for earnout obligations in connection with our 2021 to 2024 acquisitions, respectively. During 2024 and 2023, there were no net adjustments in the estimated fair value of earnout obligations related to projections of future performance for acquisitions.
When assessing our overall liquidity, we believe that the focus should be on net earnings as reported in our consolidated statement of earnings, adjusted for non-cash items (i.e., EBITDAC), and cash provided by operating activities in our consolidated statement of cash flows. Consolidated EBITDAC was $2,555.6 million and $2,266.5 million for 2023 and 2022, respectively.
When assessing our overall liquidity, we believe that the focus should be on net earnings as reported in our consolidated statement of earnings, adjusted for non-cash items (i.e., EBITDAC), and cash provided by operating activities in our consolidated statement of cash flows. Consolidated EBITDAC was $3,124.4 million and $2,555.6 million for 2024 and 2023, respectively.
The discount rates generally ranged from 6.7% to 9.6% for our 2023 acquisitions. Effect if Actual Results Differ From Assumptions While management believes those expectations and assumptions are reasonable, they are inherently uncertain.
The discount rates generally ranged from 7.1% to 9.0% for our 2024 acquisitions. Effect if Actual Results Differ From Assumptions While management believes those expectations and assumptions are reasonable, they are inherently uncertain.
See Note 8 to our 2023 consolidated financial statements for a discussion of the terms of the Senior Notes, Note purchase agreements, the Credit Agreement (as defined below) and the Premium Financing Debt Facility. Consistent with past practice, as of December 31, 2023 we had pre-issuance hedges open for $150.0 million for 2024.
See Note 7 to our 2024 consolidated financial statements for a discussion of the terms of the Senior Notes, Note purchase agreements, the Credit Agreement (as defined below) and the Premium Financing Debt Facility. Consistent with past practice, as of December 31, 2024 we had no pre-issuance hedges open for 2024.
The fourth quarter 2023 survey had not been published as of the filing date of this report. The first three 2023 quarterly surveys indicated that U.S. commercial property/casualty rates increased by 8.8%, 8.9%, and 8.1% on average, for the first, second and third quarters of 2023, respectively.
The fourth quarter 2024 survey had not been published as of the filing date of this report. The first three 2024 quarterly surveys indicated that U.S. commercial property/casualty rates increased by 7.7%, 5.2%, and 5.1% on average, for the first, second and third quarters of 2024, respectively.
To fund acquisitions made during 2023 and 2022, we relied on a combination of net cash flows from operations, proceeds from borrowings under our Credit Agreement, proceeds from issuances of senior unsecured notes and issuance of our common stock. 55 Cash provided by operating activities was $2,031.7 million and $1,390.0 million for 2023 and 2022, respectively.
To fund acquisitions made during 2024 and 2023, we relied on a combination of net cash flows from operations, proceeds from borrowings under our Credit Agreement, proceeds from issuances of senior unsecured notes and issuance of our common stock. Cash provided by operating activities was $2,582.9 million and $2,031.7 million for 2024 and 2023, respectively.
The income tax benefit of stock based awards that vested or were settled in the years ended December 31, 2023 and 2022 was $76.1 million and $59.3 million, respectively, and is included in the table above in the Corporate line.
The income tax benefit of stock based awards that vested or were settled in the years ended December 31, 2024 and 2023 was $89.4 million and $76.1 million, respectively, and is included in the table above in the Corporate line.
The weighted average interest rate is 5.97% per annum after giving effect to underwriting costs and a net hedge gain. During 2021 through 2023, we entered into a pre-issuance interest rate hedging transaction related to these notes.
The weighted average interest rate is 5.25% per annum after giving effect to underwriting costs and a net hedge gain. During 2024, we entered into a pre-issuance interest rate hedging transaction related to these notes.
The weighted average interest rate is 5.05% per annum after giving effect to underwriting costs and a net hedge gain. During 2019 through 2022, we entered into a pre‑issuance interest rate hedging transaction related to these notes.
The weighted average interest rate is 5.25% per annum after giving effect to underwriting costs and a net hedge gain. During 2024, we entered into a pre-issuance interest rate hedging transaction related to these notes.
In 2022, the funded status of the Plan was favorably impacted by an increase in the discount rates used in the measurement of the pension liabilities at December 31, 2022 and other assumption changes, the net impact of which was approximately $70.5 million.
In 2024, the funded status of the Plan was favorably impacted by an increase in the discount rates used in the measurement of the pension liabilities at December 31, 2024 and other assumption changes, the net impact of which was approximately $3.7 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeIf the transaction is already denominated in the foreign entity’s functional currency, only the translation to U.S. dollar reporting is necessary. The remeasurement process required by U.S.
Biggest changeIf the transaction is already denominated in the foreign entity’s functional currency, only the translation to U.S. dollar reporting is necessary. The remeasurement process required by U.S. GAAP for such foreign currency loan transactions will give rise to a consolidated unrealized foreign exchange gain or loss, which could be material, that is recorded in accumulated other comprehensive loss.
All of these hedges are accounted for in accordance with ASC Topic 815, “Derivatives and Hedging”, and periodically are tested for effectiveness in accordance with such guidance. In the scenario where such hedge does not pass the effectiveness test, the hedge will be re-measured at the stated point and the appropriate loss, if applicable, would be recognized.
All of these hedges are accounted for in accordance with ASC Topic 815, “Derivatives and Hedging”, and periodically are tested for effectiveness in accordance with such guidance. In the scenario where such hedge does not pass the effectiveness test, the hedge 68 will be re-measured at the stated point and the appropriate loss, if applicable, would be recognized.
The fair value of our portfolio of cash and cash equivalents as of December 31, 2023 approximated its carrying value due to its short-term duration. We estimated market risk as the potential decrease in fair value resulting from a hypothetical one-percentage point increase in interest rates for the instruments contained in the cash and cash equivalents investment portfolio.
The fair value of our portfolio of cash and cash equivalents as of December 31, 2024 approximated its carrying value due to its short-term duration. We estimated market risk as the potential decrease in fair value resulting from a hypothetical one-percentage point increase in interest rates for the instruments contained in the cash and cash equivalents investment portfolio.
During 2023, 2022 and 2021, we had several monthly put/call options in place with an external financial institution that were designed to hedge a significant portion of our future Norway and the U.K. currency revenues through various future payment dates.
During 2024, 2023 and 2022, we had several monthly put/call options in place with an external financial institution that were designed to hedge a significant portion of our future Norway and the U.K. currency revenues through various future payment dates.
Market risk is estimated as the potential increase in fair value resulting from a hypothetical one-percentage point decrease in our weighted average short-term borrowing rate at December 31, 2023 and the resulting fair values are not materially different from their carrying value.
Market risk is estimated as the potential increase in fair value resulting from a hypothetical one-percentage point decrease in our weighted average short-term borrowing rate at December 31, 2024 and the resulting fair values are not materially different from their carrying value.
In addition, during 2023, 2022 and 2021, we had several monthly put/call options in place with an external financial institution that were designed to hedge a significant portion of our Indian currency disbursements through various future payment dates.
In addition, during 2024, 2023 and 2022, we had several monthly put/call options in place with an external financial institution that were designed to hedge a significant portion of our Indian currency disbursements through various future payment dates.
We estimated market risk as the potential impact on the value of the debt recorded in our consolidated balance sheet based on a hypothetical one-percentage point change in our weighted average borrowing rate as of December 31, 2023.
We estimated market risk as the potential impact on the value of the debt recorded in our consolidated balance sheet based on a hypothetical one-percentage point change in our weighted average borrowing rate as of December 31, 2024.
For the year ended December 31, 2023 there has been no such effect on our consolidated financial presentation. The impact of these hedging strategies was not material to our consolidated financial statements for 2023, 2022 and 2021.
For the year ended December 31, 2024 there has been no such effect on our consolidated financial presentation. The impact of these hedging strategies was not material to our consolidated financial statements for 2024, 2023 and 2022.
The following analyses present the hypothetical loss in fair value of the financial instruments held by us at December 31, 2023 that are sensitive to changes in interest rates. The range of changes in interest rates used in the analyses reflects our view of changes that are 66 reasonably possible over a one‑year period.
The following analyses present the hypothetical loss in fair value of the financial instruments held by us at December 31, 2024 that are sensitive to changes in interest rates. The range of changes in interest rates used in the analyses reflects our view of changes that are reasonably possible over a one‑year period.
Assuming a hypothetical favorable change of 10% in the average foreign currency exchange rate for 2023 (a strengthening of the U.S. dollar), earnings before income taxes would have decreased by approximately $45.4 million. We are also subject to foreign currency exchange rate risk associated with the translation of local currencies of our foreign subsidiaries into U.S. dollars.
Assuming a hypothetical favorable change of 10% in the average foreign currency exchange rate for 2024 (a strengthening of the U.S. dollar), earnings before income taxes would have decreased by approximately $55.5 million. We are also subject to foreign currency exchange rate risk associated with the translation of local currencies of our foreign subsidiaries into U.S. dollars.
Assuming a hypothetical adverse change of 10% in the average foreign currency exchange rate for 2023 (a weakening of the U.S. dollar), earnings before income taxes would have increased by approximately $22.6 million.
Assuming a hypothetical adverse change of 10% in the average foreign currency exchange rate for 2024 (a weakening of the U.S. dollar), earnings before income taxes would have increased by approximately $64.8 million.
The aggregate estimated fair value of these borrowings at December 31, 2023 was $6,840.2 million due to the long-term duration and fixed interest rates associated with these debt obligations. No active or observable market exists for our private placement long‑term debt.
The aggregate estimated fair value of these borrowings at December 31, 2024 was $12,072.7 million due to the long-term duration and fixed interest rates associated with these debt obligations. No active or observable market exists for our private placement long‑term debt.
The resulting fair values were not materially different from their carrying values at December 31, 2023. As of December 31, 2023, we had $7,498.0 million of borrowings outstanding under our various senior notes and note purchase agreements.
The resulting fair values were not materially different from their carrying values at December 31, 2024. 67 As of December 31, 2024, we had $13,073.0 million of borrowings outstanding under our various senior notes and note purchase agreements.
See Note 21 to our 2023 consolidated financial statements for the changes in fair value of these derivative instruments reflected in comprehensive earnings in 2023, 2022 and 2021 . 68
See Note 18 to our 2024 consolidated financial statements for the changes in fair value of these derivative instruments reflected in comprehensive earnings in 2024, 2023 and 2022 . 69
As of December 31, 2023, we had $245.0 million of borrowings outstanding under our Credit Agreement and $289.0 million of borrowings outstanding under our Premium Financing Debt Facility. The fair value of these borrowings approximate their carrying value due to their short-term duration and variable interest rates associated with these debt obligations.
As of December 31, 2024, there were no borrowings outstanding under our Credit Agreement and $225.2 million of borrowings outstanding under our Premium Financing Debt Facility. The fair value of these borrowings approximate their carrying value due to their short-term duration and variable interest rates associated with these debt obligations.
However, with respect to managing foreign currency exchange rate risk in India, Norway and the U.K., we have periodically purchased financial instruments to minimize our exposure to this risk.
Historically, we have not entered into derivatives or other similar financial instruments for trading or speculative purposes. However, with respect to managing foreign currency exchange rate risk in India, Norway and the U.K., we have periodically purchased financial instruments to minimize our exposure to this risk.
A one-percentage point decrease would result in an estimated fair value of $7,420.6 million, or $77.4 million less than their current carrying value. A one‑percentage point increase would result in an estimated fair value of $6,340.6 million, or $1,157.4 million less than their current carrying value.
A one-percentage point decrease would result in an estimated fair value of $13,118.6 million, or $45.6 million more than their current carrying value. A one‑percentage point increase would result in an estimated fair value of $11,169.7 million, or $1,903.3 million less than their current carrying value.
Removed
GAAP for such foreign currency loan transactions will give rise to a consolidated unrealized foreign exchange gain or loss, which could be material, that is recorded in accumulated other comprehensive loss. 67 Historically, we have not entered into derivatives or other similar financial instruments for trading or speculative purposes.

Other AJG 10-K year-over-year comparisons