Arthur J. Gallagher (AJG) adds CCI underwriting to portfolio

Arthur J. Gallagher & Co. AJG announced that Risk Placement Services, Inc., its U.S. wholesale brokerage, bonding and program arm, has acquired CCI Surety, Inc. The acquisition will consolidate the buyer’s presence in the wholesale surety industry and strengthen its portfolio.

Headquartered in Golden Valley, Minnesota, CCI Surety is a managing general insurer specializing in wholesale contracts and commercial sureties for retail agents throughout the United States.

Arthur J. Gallagher has an impressive inorganic history with buyouts in the brokerage and risk management segments. This Zacks Rank #3 (Hold) insurance brokerage acquired 12 entities in the first quarter of 2024, with estimated annual revenues of $69.2 million. Arthur J. Gallagher grows through mergers and acquisitions, most of which occur in the Brokerage segment. AJG has a robust M&A pipeline, with approximately 50 deal sheets agreed or being prepared, delivering more than $350 million in annual revenue.

A solid capital position ensuring a continuous inflow of cash supports AJG in its development initiatives. It remains focused on continuing its existing mergers and acquisitions. AJG continues to expect M&A capacity of $3.5 billion in 2024 and another $4 billion in 2025 on a net basis.

Arthur J. Gallagher’s long-term growth strategies should help it deliver organic revenue improvement and pursue strategic mergers and acquisitions. AJG is focused on improving productivity and quality, which should help it post solid results in the future.

Shares of Arthur J. Gallagher are up 11.4% year to date, outpacing the industry’s gain of 8.2%. Solid performance of the Brokerage and Risk Management segments, strategic buyouts to capitalize on growing market opportunities and efficient capital deployment should continue to drive share price growth.

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Stocks to consider

Some of the better-ranked companies in the insurance industry are Arch Sp. Capital Group ACGL, Allstate Company ALL and Brown and Bronze BRO.

Arch Capital surprised with average earnings for the four quarters of 28.41%. Since the beginning of the year, the company’s shares have gained 38.5%. The Zacks Consensus Estimate for ACGL’s 2024 and 2025 earnings is projecting year-over-year growth of 1.2% and 5.2%, respectively. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 stocks here.

Allstate delivered a four-quarter earnings surprise of 41.88%. Since the beginning of the year, the company’s shares have gained 20.2%. The Zacks Consensus Estimate for ALL’s 2024 and 2025 earnings is projecting year-over-year growth of 1,479% and 14.7%, respectively. It currently carries a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for Brown and Brown’s 2024 and 2025 earnings is projecting year-over-year growth of 24.5% and 7.9%, respectively. BRO surprised with average earnings for the four quarters of 11.90%. BRO shares are up 28.6% year to date. It carries a Zacks Rank #2.

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