Arthur J. Gallagher & Co. (AJG) Earnings Call Transcript & Summary

All right. So good morning, everyone. I'm Ray Iardella, Head of Investor Relations at Gallagher. I want to welcome everyone to our fourth quarter 2025 Investor Meeting, including those of you that are here in person and those that are joining via the webcast. So in lieu of our business leaders getting presentation sort of vertically across the business, we're going to focus on 2 fireside chats today talking about our two-pronged growth strategy of organic and M&A in 2, 30-minute sessions. Towards the end of each discussion, we'll open it up for Q&A on the topic that we're discussing, whether it's organic or M&A for those here in the room. And what I would ask for the benefit of those on the webcast, we ask that you wait for a mic to get a question. So people can clearly hear the question, then the answer as well. Additionally, we handed out our updated CFO Commentary document a few minutes ago, and we posted the same document to our website at www.ajg.com/december16materials. An 8-K regarding this information was filed this morning as well. So before we get started, I'd like to make a quick legal comment. Some of the comments made during today's meeting, including answers given in response to questions, may constitute forward-looking statements within the meanings of the securities laws. These forward-looking statements are subject to risks and uncertainties described in our reports filed with the SEC, our CFO commentary and those that may be discussed today. Actual results may differ materially from those discussed today. With that out of the way, I'm going to hand it over to J. Patrick Gallagher, Jr., our Chairman and CEO. Pat?

Thank you, Ray, and thank you all for coming out today on a brisk day, and I know some of you traveled to get here. I was talking to Joe and it took them like 36 hours. So thanks very much for making the trip. We appreciate it. I'll tell you, it's a -- I think it's going to be a fun couple of hours, and we want you to just feel free to please ask the questions that you've got. I'd like to just start a little bit by talking about our competitive position and kind of how we feel about the business and simply add is just a bit of overview as we get into the day. Our business is in really, really good shape. The team, I think you're going to see is -- continues to be very, very strong. We see our future growth and underlying growth activity is just being literally massive. When you take a look at what's going on in our business, I know, and you'll hear we'll talk about what's happening in the rate environment. Yes, rates are moderating in particular in property. But overall, insurance premiums are still rising. In addition, when you take a look at our statistics relative to what's going on in the economy, in particular here in the U.S., our businesses are strong. We still monitor every day what's going on with endorsements and with policy cancellations and those continue to be very, very strong. When you look at the overall worldwide community of insurance buyers, there's about $7 trillion of insurance premium purchased in the world, about $4 trillion of that is non-life P&C. And you step back from that opportunity, you look at say, "Oh my goodness, that's a huge, huge business." Including AssuredPartners, Gallagher will touch about $200 billion of premium. So if you put it in another perspective, if you take our largest publicly traded competitors and ourselves and you add us together, we have no market share. So Gallagher virtually has no market share. And if that pie grows with the world economy. In many instances, it will grow bigger than the share that we already have. At the same time, you've got a world that's getting more dangerous that has all kinds of needs for risk management spread of risk that grow every day. When I started in the business, nobody ever heard of cyber, it didn't exist. Today, cyber is something that we're talking about literally down to the bodega owner. You've got to have this cover. This is why, this is what you need. Gallagher now is in a position where we can literally talk to any client of any size, and we want every client of every size in any industry, no matter where they're located in the world, and we can do that business. We feel really good about our growth prospects, but we want to be clear about how we view that. So we look at our world as two-pronged in terms of our efforts to grow. And clearly, when you take a look at what Gallagher is trying to do, organic growth is our primary pillar of growth. Every day, and we're proud of this. We get out and we sell insurance and risk management services. We get out and talk to people about why they should be part of Gallagher and what we can do for them. The second prong to that, however, which I sometimes think gets a little bit overlooked is our merger and acquisition activity. If you go back to 1984 when we came public, we had a $64 million company, that was our total revenue. We raised $11 million, that was our total balance sheet. But the reason we went public in large part was to get a currency to be able to do acquisitions. Today, 40-plus years later, we are basically a merger company. We're a company that was built by partners all around the world. And as Doug coined years ago, the phrase we use is, yes, when we do an acquisition, we want revenue and continuing earnings, no question, but we're getting capabilities and brains. And that activity continues today to be very, very important to us. And you'll hear an update, of course, on how we're doing with AssuredPartners. I couldn't be happier with that acquisition. I've been out now with this team that you'll see today, we had about 20 of us that went out, saw probably 60 individual branches, maybe 70 individual branches. Presently, we have about 500 people coming to the home office and tranches over 6 tranches of meetings. By the time we're done with that activity, we will have touched in person probably 90% of the 11,000 people that are joining us. And I will tell you that I really haven't met anybody in the whole process that I would think, oh, they don't fit. It's going to turn out to be a real seminal event for us. And what that does for the company, while we're very -- every day emphasizing organic growth is it takes us to a position even in 2026, where regardless of what the market is doing or what have you, our growth is going to be over 20%. And the activity around acquisitions looks to only be getting stronger, not weaker. There's 30,000 agents and brokers in the United States. The difference between that local broker who, by the way, when we compete 90% of the time, we're competing with somebody smaller than we are. You'll hear more and more about our capabilities, and that is really what I think is going to drive both acquisitions as well as continuing organic growth. The third thing we try to do every single day is get more productive and have a higher level of quality. You've -- Many of you have followed us for a long time, and you know that we started 20 years ago, moving work to India. Today, we have about 16 people -- 16,000 people there, and they deliver services across all over the world that literally cannot be replicated in the local environment. Our benefits business is strong. Our claims service is strong. Economic activity is strong. Organic growth is strong. Merger and acquisition opportunities are strong. Our integration of AssuredPartners is strong. Our pipeline for tuck-in acquisitions, which is really where we focus most of our M&A time, presently, we're talking to literally hundreds of people. We've got dozens of letters of intent out and it looks to us like we have a good line of sight to have another very, very strong year this year. So with that, what I'll do is just simply say welcome again. Thank you for taking your time to join us this morning. I think that you'll find is time well spent. And of course, when we get to Q&A, if there's anything along the lines that I can add to it, Doug and I will be up and take those questions as well. So Ray, I'll turn it back to you. Thank you for being here.

Thanks, Pat. So maybe our business leaders may come on up and we can start the first chat. So maybe to just first level set who we have on stage, maybe we can get on the road, just introduce yourself and then what you will be primarily speaking about today. So Mike, do you want to begin?

Yes. Good morning, everyone. I'm Mike Pesch. I'm the CEO of our Americas P&C business, which is really 3 key areas. It's our U.S. retail P&C business. And over the last 12 months, obviously, with AssuredPartners, Woodruff Sawyer and a host of other mergers that have joined us, that business will be about $4.5 billion of revenue in 2026. That's run by Pete Doyle. And then we have our Canadian, Latin American and Caribbean operations. Canada is about $300 million in overall revenue in the Latin American and Caribbean is about $150 million and rapidly growing. And then our specialty business, which is run by Patrick Kennedy, it's about a $2 billion business. And if you remember, in AssuredPartners, they had their retail business and then they had what they called Accretive. And the Accretive businesses, 21 of which fit perfectly within our specialty business, which includes RPS, which includes our captive business, our affinity business and our pool administration business. So that business altogether is $2 billion, serving customers across the whole spectrum from $100,000 in premium up to millions of dollars in premium annually.

Patrick?

Patrick Gallagher, Chief Operating Officer. I'm involved with all the businesses around the globe. I'll be mainly covering international property and casualty today, which for all of you, it's about 60 countries in which we have offices and 70 in which we have capabilities, so about 130 countries where we have capabilities to serve. When I talk about international P&C, I'm mainly talking about our retail businesses in the U.K., Ireland, Australia and New Zealand, which makes up about $1.8 billion of our revenue, and we are top 5 in every single one of those markets. I will also touch upon our London specialty business, which is our London wholesale business, about $700 million with about 1,200 colleagues in the U.K. doing specialized London wholesale.

I'm Tom Gallagher, and I am President of the company. And today, I'll be talking about our reinsurance operation until the AP transaction, that was the seminal event for the company. Gallagher Re started in 2013 with Capsicum. And when Capsicum came on to the company 4 years ago, right now, we acquired the Willis Re operations, combined them and created Gallagher Re. Right now, we are doing everything we can to be the broker of choice for our large insurance companies and actual smaller risk takers as well. We're the third largest of the reinsurance brokers in the world. Over 3,000 of our teammates are actually in the reinsurance business. We've had a terrific 2025. I'll talk more about that later. But our business split is about 25% casualty, about 35% specialty, property being 40% to the overall business and about 1/3 of the revenue comes from the property as well. North American property is 40%. And overall, about 1/3 of the revenues are from property itself. With that, I'll pass it over to you Bill.

Good morning. I'm Bill Ziebell, and I lead Gallagher Benefit Services, our employee benefit and HR consulting practice for Gallagher with AssuredPartners, we're on a run rate around $3 billion. We operate -- most of our business is in the U.S., but also in Canada, U.K., Australia and New Zealand. So I'll be talking about what's going on in the benefit space in terms of both the organic and the merger side as well. That's mine, Bill.

I'm Scott Hudson. I run Gallagher Bassett. We're the claims paying business inside Gallagher. Our run rate will close out this year probably around $1.6 billion. We handle claims on behalf of our clients. We don't take risk. We've got operations throughout the world. The majority of it is P&C claims and the majority of the P&C claims that we handle are in the workers' compensation space, but we do handle claims in other specialty lines. And more recently, we got into the disability claim handling business down in Australia, of which we are probably the dominant player in that as well.

Perfect. All right. Well, maybe we'll shift over to talking about some of our organic growth initiatives, the value proposition tools that we have available for our brokers and other initiatives that we have around. Patrick, do you want to talk about CORE360 and our value proposition?

Yes. Many of you have heard about our CORE 360 value proposition. When you're as big as us in property and casualty and as diverse as us, it's really important that you have a common approach and a common language in which you're speaking to customers. So for every customer, we're using a unique value proposition to talk about coverage choices, program structure, risk control and mitigation, all the things that go into the cost of protecting a business other than the premium. We get into the premium as well in that. But I think the common language is super important because when we go and call on a mid-market manufacturer, we're bringing in a property expert, we're bringing in a D&O expert, and we're sitting down with them. And if all 3 of the people that are the person who brought the opportunity, the property person, the D&O person are speaking a common language, it's much more easy for our buyers to kind of understand the common way we're trying to mitigate their expenses when it comes to insurance. It's also a common investment tool within Gallagher. When we look at something where we see an opportunity to help our customer make themselves a better risk, we will invest in it only if it fits into one of the quadrants of our value proposition. And so you've got an opportunity here where you're sitting with a mid-market CEO or CFO. This is where it works better with mid-market and upper mid-market because they don't have a risk manager. They don't have an insurance professional that's sitting there. They want to talk about the entirety of the business and what they need to do to protect themselves. And CORE360 is just something that hangs together around the globe to be able to offer our unique value proposition.

Mike, do you want to add anything or...

Yes, I would just say -- so we talk about a two-pronged approach to growth, organic and mergers. And internally, I'm not so sure if we use it externally, but internally, we talk about mergers as buying brains. And it really -- when you think about CORE360 and you think about some of the key parts of it, what we bought with AssuredPartners, what we bought with Woodruff Sawyer, added to the CORE360 offering. When you think about the niche practice groups, not only did they add to the existing areas of specialty, but they added to ones that maybe we needed to add to all along, which is things like energy, technology, construction. We now have a team that is, I think, second to none in the industry. When you think about CORE360, you think about data, I'm really proud of our team in just a period of literally 90 days. They were able to get all of the AssuredPartners information into Gallagher Drive. Now to give you some scope there, that's $11 billion of premium that we now can break down by industry of what people are buying, who they're trading with, how much they're buying as we give great advice through CORE360 to our clients and prospects. That is huge to add to our $20 billion of premium that's already in Gallagher Drive, to be able to predict what's going to happen in the marketplace, to be able to build programs and facilities. And then the last thing I'll say is we've talked about in the past about our national risk control platform. These are our loss control and claim advocates. These are the folks in the field that help our clients get better at what they do to be safer. And when they have a claim to get through it without -- by getting paid by the insurance companies or by avoiding litigation. When we bought AssuredPartners and Woodruff Sawyer, we added over 150 of these professionals. So you think about CORE360 and then you think about the additive approach to M&A, buying brains, I couldn't be more excited about our value proposition going forward.

Yes. Since you cover the specialty business, too, do you want to touch on what we're offering clients there?

Yes. The specialty business, again, I think sort of our key market strategies, our go-to-market strategy is another thing that I'm really excited about. And you all didn't get this, but this is a document that we built -- Patrick Kennedy actually built and his team as we figured out where the AssuredPartners businesses fall, whether it's open wholesale or binding operations or programs or our pool administration. Many of these facilities -- many of these programs that AP had fit perfectly into what RPS had and what ARTEX had. And so I couldn't be more excited as we go to market. That business went from $1 billion to $2 billion in revenue with very specific areas of capabilities. The other thing I'm really excited about from a specialty perspective is our ability to build programs. We're building them every day, specific to what our retail customers need. There will be a time where we will be able to take the information in the not-too-distant future and get down to the very specific micro vertical to go find capacity in the marketplace and build a facility or a program with the expertise that we have in specialty to solve a problem for our clients and for our producers. So I'm really excited about our go-to-market strategies in specialty.

Great. Bill, do you want to hit on the benefits go-to-market strategy?

Sure. So we call our value proposition of your people strategy partner. If you think about what's important to an employer, I can't think of anything more important than their employees. It doesn't matter what business people are in or house, what their size is. Think about your own employer relationship, what brought you to them. Obviously, our biggest is in the benefit space. This is where it's very regulated, very complex. It takes a lot of information to do a good job with that. There's only 5 national carriers and every competitor can get the same quote. So our differentiation is using data to help navigate, help them give good suggestions on how they can mitigate those costs. I'll get to more of that later. But the benefits is our primary business, about 2/3 of our business. That's number one. Benefits is our biggest business globally. Number two is the financial business lines. This is where we have our retirement plans, defined contribution, defined benefit, we also put in there things like pension derisking. Our executive benefits is in that space. So it's a lot about retention as well for our clients. And then the third is our talent business line. This is where you have comp consulting. We have communications, engagement capabilities. We can survey employees, what do they feel about their employer or things of that nature. We have fractional HR support for our clients. All 3 of these things are universal across the globe. The value proposition of our clients, the employers that are looking for ways to mitigate costs, but also how they're going to keep their talent in their seats and doing what they needed to do. And it changes a little bit in terms of what's important by country, but it's also by industry and size of the employer in terms of the leverage they have available and also what they're trying to get done. A law firm, as an example, may have a completely different type of benefits philosophy than a small manufacturer or a distributor. Their margins are different, what they're trying to attract is different. So we have to customize those solutions for every one of our clients, depending on what they're working on. So our specialization of our people and using the data to really help our clients drive decisions. That's what we're doing at Gallagher Benefit Services globally.

Great. Thanks. Scott, do you want to hit Gallagher Bassett?

Sure, Ray. The first thing to know about how we go to market is that we've segmented into 4 different groups of prospects for us. The first is large corporations. That's been kind of the core of what Gallagher Bassett or who Gallagher Bassett has served over the years. Those are the large organizations that self-insure. In our roster of clients, you would see names like Costco, FedEx, UPS, McDonald's, those organizations that -- because they're self-insuring, they need somebody like our organization to handle the claims for them. Second is public sector clients, all forms of public entities, whether it's states, local municipalities, school districts throughout the U.S. primarily. We also serve some of them in the U.K. Then you've got the alternative market clients, large captives. Mike talked about programs and MGAs. We would be the claim-paying entity for those type of organizations. And then more recently, insurance carriers. And we're going to them and basically saying that, look to us to handle your claims, you don't need a claims organization to do that any longer. And that probably at this moment is the fastest-growing segment. And a piece of that are the large schemes, which, in essence, are insurance carriers down in Australia, each of the state work comp schemes, the disability scheme down there are clients of ours as well. Years ago, we would go to market by basically asking those organizations, how do you want us to handle the claims. Today, given our deep expertise and kind of the breadth of our experience, we're basically saying we've got a strong point of view, take our expertise to help you design a program that will meet your needs. So it's not all about just doing what they want us to do, but kind of bringing our perspective to the table. Yet at the same time, we will customize those -- our programs to those different entities. I mentioned there's 2 different companies may have a different point of view on how they want their workers' compensation claims handled as it relates to their employees. When we're handling liability claims for these organizations, that is -- we're representing their brand in the marketplace and how they want that handled, how they want us interacting with the individual that has the claims in large part will be dictated by their strategy and how they're going to market. So we are in a position to be able to customize our offerings client by client as well. But our point of view is definitely an integral part of how we design programs for these organizations.

Great. Thanks, Scott. It's already come up a couple of times the sort of the niches and the specialization of our brokers. Tom, do you want to talk a little bit about the niche strategy? I know you created and led one of our niches early on. So can you talk about that?

It's almost 30 years ago now. As each one of them talked about, specialization is incredibly, incredibly important to the way that we perceive our opportunity to grow the business organically. Today, we've got more than 30 practice groups in the company, where we believe we've got outstanding capability to differentiate ourselves at the point of sale. Our managing directors can have a practice group that is just U.S. or it could actually be global. And by virtue of being able to do that, we can bring all the best of what's happening inside of our company to our prospects and to our clients and to our team. Think about it, if you will. We had the Assured team into Chicago, as Pat mentioned, over the last couple of weeks, and we will be doing more of this in January. We bring these people in and go through a trade fair with them to give them an opportunity to look at what we do and how we do it. Many of our practice groups were actually part of that. There was tremendous excitement about being able to go back to their offices and bring that kind of skill set to their prospects. We see the success of it happen constantly inside of the company. It also drives retention. Today, more than 80% of our business is tied into those practice groups. It's an incredibly important part of what we've been about and what we will be about for a very long time.

Great. I don't know, Bill or Scott, if you want to add anything on the niche?

Yes. We have a very similar approach on the vertical niches as well. Our biggest is health care, and we also do very well in private equity and in public sector. It's interesting about health care because that's where a lot of pain points are going on right now with those health systems in terms of the cost of their labor, cost of delivering services and so forth. And we're winning a lot of business from large competitors these days because we come in with a fresh set of eyes, read the contracts, find savings of millions of dollars for them. And it's a really important value proposition. And that niche for us is growing pretty rapidly. I would also add in the benefit space, segmentation is a big deal for us as well. And we service clients that could be down to 2 employees up to 200,000. And so having the right athletes in front of those clients is really important, not only at the point of sale, but on the service side as well. So matching those up, getting people trained up on what does a 50 employee group need versus a 5,000-employee group are vastly different. So we're doing a lot in the segmentation of our business in addition to the niches.

Scott, do you have anything to add?

Yes. The -- I mentioned the 4 different types of clients we have, and that's primarily the way we're going to market. We do serve clients across all industries. We're quite significant in whether it's retail, hospitality, transportation and so forth. But more recently, we have started pivoting a little bit to thinking about the segments and delivering specific offerings to given verticals. The one that we're probably the furthest down the path on is with construction. And a few years ago, we actually acquired a couple of companies and started building capabilities around loss prevention and safety. And we're quite well established in doing that in the construction space. And so we go to market with construction companies, and we basically say we can help you on your construction sites, make sure claims don't occur. But if by chance they do, then we're there, whether it's a workers' compensation claim or some other transportation type claim. And we're starting to do that as well in the health care space and a little bit with transportation companies. But our primary approach, Ray, has been staying within our client segment. But I think in time, we'll see much more emphasis on the individual verticals.

Great. Thanks, Scott. Maybe shifting a little bit. Data and analytics have come up a couple of times in the comments of both Bill, Mike and Patrick. Patrick, do you want to talk about Gallagher Drive and sort of what we built on the P&C side right now?

Sure. So if you think about Gallagher 8 years ago, and you think about our competition that we compete with, where 90% of the time, they are smaller than us. And you even think of AP, AssuredPartners, as of August, the old way of insurance broking was we would take the submission data, send it to the carriers, negotiate with each carrier the best opportunity or the best quote that they could put out, so we go to 5. And then you get the best quote and you compare those quotes and the best one for the client is the one you pick, and that's it. But there's not a lot of what are clients like me for Gallagher 8 years ago for our smaller competition. What we embarked on 8 years ago is our -- what we call Gallagher Drive, and it's our data and analytics tool that really helps you understand through our book of business, what coverage to buy, what limits to buy from which carrier to buy it, roughly how much it should cost. And we have all that benchmark in our data. And that informs the actions as well to be taken through the CORE360, national risk control, coverage limits, what coverage to purchase. And so it informs a much better conversation with our customer, not just buy from AIG because it's a better quote than Chubb. It's -- this is the journey we're on to get you to buy the right insurance program. We capture submission data, quote data, market conditions, claims data, industry data, and we put that all together to create purchasing trends, client losses versus peers, and we sit down with the customer and have a much more informed discussion. The data and analytics movement that we've done over the last 7 to 8 years, maybe sits right behind the niches as the #1 reason people buy from us.

If I could just jump in for a moment. I was in a pitch a couple of weeks ago where our Drive team came in and was making a pitch talking to a prospect. We had 3,500 companies in the United States in that practice area that we were talking about. We're able to boil that down to a region. We're able to boil that down to a size. We're able to provide them meaningful, meaningful data as it relates to what's actually happening to those accounts and what the industry is doing at that moment. Just tremendous amount of information that we're able to gather.

Great. Mike, do you have anything to add on Gallagher Drive? Or do you want to hit SmartMarket as well?

Well, I'll hit SmartMarket, but I'll tell you, Pat referenced it. We've held in-person meetings at the AP locations, and now we're doing it in our home office in tranches of 300 to 500 of the AP folks. And in those cases, we are having a little mini exhibit hall. We have some speakers in an exhibit hall where we show them actually how to utilize their own data through Gallagher Drive. And the aha moments that you're seeing from folks that have been thirsty for this, where they trade in the mid-market and upper middle market, as Patrick put it, where that information is incredibly valuable. It's a differentiator. They're so eager to now be able to go out in front of their clients and prospects. And if they don't quite know how to use it, we have the teams to support them and to go on calls with them in the field. So it's incredibly exciting to just watch it come to life within a group of 11,000 people that have never seen something like this before, and they're thirsty for it. So as Patrick said, we differentiate ourselves from our smaller competitors, these sort of things, not only to our producers, but ultimately, our clients are really, really important. Ray asked me to just make a comment or 2 about SmartMarket. So we've talked about SmartMarket in the past. I always like to say it's sort of like an Uber in the insurance industry. It connects willing buyers and sellers together through a digital interface. That's really what it does. And if you think about it, Patrick talked about going to market. And at Gallagher, for the most part, our producers, our account executives take this submission and go to the insurance marketplace and tell the story on behalf of that customer. We like that approach. It gives a personalized approach. That's what we see in smaller competitors, that personalized approach. But we have to use our size and scale to leverage the knowledge about the marketplace, and that's what SmartMarket gives us. So our insurance carriers, our key trading partners can see inside our book of business and be very prescriptive about opportunities they want that fit their appetite. And AssuredPartners, if you think about it, I don't want this to only be about AssuredPartners, but Gallagher, legacy Gallagher had about 90 offices for retail P&C. And if you think about all of those individual producers, about 1,200 producers marketing their own business, it's very challenging to make sure you're up to speed on appetite and what carriers are interested. And for the carriers, many of whom have local offices, but some don't, to be able to interact with our people in a very prescriptive way. So SmartMarket gave them that advantage. Now you add on 200-plus AssuredPartners offices, almost 300 offices across the United States, SmartMarket will be the game changer for many of those folks because AP did what we did, which is, for the most part, market their clients' business via submission to their insurance companies. They didn't hub the submission process. So the technology of SmartMarket will not only continue to support the existing legacy Gallagher offices, but the 200-plus AP offices to make them faster to market to make sure they're getting the right carrier at the right time for the right account. And so we're incredibly excited about with what SmartMarket will bring to our new colleagues.

Yes. And maybe, Patrick, do you want to talk outside the U.S., that was mostly...

Yes, it's not just the U.S.A thing. I mean, I think I -- one of the things I like about our company is when we come up with a good idea, and it seems to be working, we get the other divisions, other areas of the globe, other niches, other specialties, a chance to learn and be part of that new initiative. SmartMarket definitely started here in the U.S., but we have 15 markets across Australia, New Zealand and Canada and now 10 in what we call specialty markets. And as Mike alluded to, I mean, it's just a great carrier appetite guide. Hartford can come in and say, we want to write construction, but they don't want to write crane operators and they don't want to write electricians. So it's hard for people to understand when they say construction, I mean construction, but -- well, if they're in SmartMarket with us and working with us and they're tagging the construction accounts that they want and showing our producers, that's the actual construction I want. It's a much more efficient process to be working with our carriers and knowing their day-to-day changes in what appetite they have and what risks they want to write for us.

Great. Maybe sticking on the P&C side, Patrick, do you want to talk about Gallagher Submit and Gallagher Go.

Yes. So feeding into this data and analytics is how do we get that submission information. And while we do have a great team in our Gallagher Centers of Excellence that can pull in the random submission information from our clients and put it into a great submission to the market and lead that to proposal, we've endeavored to make -- to take the friction out of the renewal process. So the CFO is now receiving from us a very tech-driven cleaner data set of what we're looking for, for the submission information. So it's easier for our CFOs to submit the information we require to go to market on their behalf, but also it's easier for us to get it into our carriers' hands in the way that they would like to see the submission. And also at the same time, it gathers cleaner data for our One Source data lake. So if you're thinking about a submission flow from 10 years ago, it's a bunch of back and forth between the buyers, send me this document, send me that document. Submit is our technology platform to take the friction out of that. And it's -- the clients love it because it's pre-populated at renewal. They don't have to go through the same process every year, makes them a much stickier customer. When you think about Go, now that we have this data, and we're pulling it into our centers of excellence, we can now basically have a banking app. So you've got it on your computer or on your phone that basically says, these are your policies, you can manage your locations, you can issue certificates, you can issue auto ID cards, a future state, you can track your renewal like a Domino's Pizza come into the house. But it makes -- when you think about SmartMarket and then you think about Submit and then you think about Go, those are all 3 digital experiences. In the current world and in the world going forward, we find that anyone that has a digital experience with us, any of those 3 is a much stickier account and much less willing to take competition from our brokerage competitors.

That's a great overview of those products. Another way, though, that we differentiate or use our data and care relationships is to create new products. Do you want to talk about the advantage products, Mike?

Yes. I think you've heard me talk a bit about this in the past. But just as a reminder, about a decade ago, we sat in a room trying to figure out whether or not we could take a line of coverage or even an industry and tailor-make coverage solutions, approach the carrier marketplace and put sort of an RFP or an RFQ out to see who would be willing to participate as a panel member where they would guarantee that our clients would get certain terms and conditions that were enhancements to your normal coverage for that line of coverage. And they would, in essence, get more of the volume because they were providing a service to our customer. And of course, then they would also pay us more remuneration. Well, the first one was Umbrella that we launched about a decade ago. And now we've added about 16 other lines of coverage with about 5 to 6 insurance companies participating on each one of these panels. Put these out to bid on a regular basis. Typically, we're oversubscribed. The insurance companies are hungry to get on these panels. It's a win for them. Most importantly, it's a win for our mutual customer. They get coverage terms and conditions that they ordinarily wouldn't get for that line of coverage in the marketplace. And it's a win for our producers and ultimately for Gallagher because we get paid more compensation. So all 3 parties in the food chain win and now we have about 17 of these products. The best part of the story is that effective January 1, all of the AP business will roll into our Advantage products, therefore, getting better terms and conditions for their clients and better compensation for their producers and ultimately, Gallagher AP.

Great. Thanks. Most of those comments are focused on retail specialty. Tom, do you want to talk about some of the reinsurance organic growth initiatives we have?

Sure. You take a look at 2025, we've had a terrific '25 for the reinsurance group, great new business wins all throughout the year, coming into the end of the year in a very strong position as well. When you look at the opportunity that they have inside of Re right now, we've talked about it from the very first time that they came in that we're good at cross-selling among the various businesses that we have. This year alone, we will do over $8.5 million worth of cross-trade revenue. This is something that they never had ever in their prior employer. We're also developing the capability to help our carriers with alternate solutions to problems that they have. So you talk about sidecars, cat bonds, insurance-linked securities, all types of different things are coming together for our reinsurance team. It's been a very, very effective year for them. And then the third thing that they're doing right now is they're building out a fact facility that is a global fact facility that rather than sitting off to the side is central to what we're offering to each of our reinsurance clients. And we have great expectation that this will pay real dividends in 2026 and beyond.

Great. Thanks. Bill, do you want to hit on some of your initiatives?

Sure. Earlier, I mentioned something we use a lot, data driving decisions, and we have a lot of data in the benefit space a lot. First, we break our data down into 4 big buckets here. One is about knowing your people at census, compensation, where they live, what kind of things are they looking for. Then we get into knowing your plan design. Is your plan design meeting the needs of your employee population? Can they afford to go to the doctor, things of that nature? And maybe we ought to have a different plan for different employees in the organization and so forth. And the plan design is huge because it gets into how are we going to help that employer save money or do better to attract employees. Utilization, claims are keen in our world here on medical. What is going on with your claims? So if you get to be self-insured or even experience rated on fully insured, we have access to claims. And we typically like to put that into a data warehouse and then we download the data warehouse into our Drive mechanisms, and we are able to go into and say, figure out what are driving these costs. The largest component of cost drivers in the U.S. today continues to be cancer -- and that cancers, and then we also have neonatal. So those are really big deals there. But we look at whether the employer has populations of high users of needs, things like dialysis or musculoskeletal and things of that [ nature ]. And then we start looking at what's available in the communities that -- where they're employed. If it's a single location or multisided, we want to see where they -- if they have opportunities for carving out. So the opportunities is the fourth bucket here, where can we get better care at lower cost for that employee population for what's driving their costs. So these are the things we do when we look at data and really helping the employer understand not only how the plan design works and if it's being used and what's driving those costs and then give them some solutions to help them keep those costs down. I mentioned a couple of them. We also look at some of the point solutions out there that are popping up. There's hundreds of these out there. We track the quality, the outcomes and the costs. And we try to recommend certain handfuls that can help with things like mental health or fertility, things of that nature that the employee population needs. So this keeps our teams pretty busy. We have a lot of data, and it's really helping our clients make really good decisions to help mitigate cost increases. I mentioned the drugs before as well, pharmaceutical, GLP-1s, all types of things. We help them figure out what should be on their formulary, where they should be getting those costs from -- or sorry, where they should be purchasing those from. We save our clients a lot of money every year by doing an RFP for PBMs. And it's increasing in velocity. More and more people want to do that, carving it out from the traditional insurance carrier. But the employers are also -- sorry, the PBMs are really -- my bad. PBMs have a lot of -- what I'm trying to get to -- a lot of opportunity for us to save money there. There's a lot of -- it's not just about doing a bid, it's about the language and the contracts. People that are in our pharmacy practice came from the PBM industry. So it's really digging into those contracts, getting best languages for our clients, the employers to keep those costs down. And we literally save millions for our clients every year with this practice as well. So a lot going on there. We've mentioned the organic initiatives. We do a lot with thought leadership. It's our practitioners, what are we seeing out there? Our marketing team takes it out. We do campaigns, seminars, and that really helps get our clients to understand that we can help them as we're going out there talking to them. It's really hard to differentiate a benefit broker from another. But when you come in with insights on things that they're dealing with, it helps us to win new business that way as well. So those are the things we're doing.

Great. Thanks, Bill. Scott, you mentioned the insurance care opportunity being one of the fastest-growing pieces right now. Do you want to maybe highlight that a little bit more.

Happy to. So just a little bit of context. If you go back a decade, the majority of Gallagher Bassett's business was with large self-insureds. And I remember having a conversation with Pat Gallagher in my early days, it's like if we really want to grow and continue to grow over -- in the coming years, where we've got to go is where all the claims are, and that's with the carriers. And at that time and probably even to this day, probably less than 10% of claims in the U.S. are handled outside the carriers. So that's where our growth prospects are. So we turned our attention to the carriers. It basically said, we've got the requisite of expertise to be your outsourced partner in the claims business. We've made actually some great strides. We've got probably $200 million to $300 million to $400 million worth of business in that area today. And the conversation will take on a number of different -- from a number of different perspectives. A lot of times, these carriers today are facing a decision to replace their claims system. That could be tens, if not hundreds of millions of dollars to do that. Guys, why do that? Come to us, we'll provide you that capability in terms of the technological services and the people themselves. The other thing is just look at our breadth of expertise. We can bring claims handling depth and expertise probably much more so than you would be able to do it internally. And people are finding challenges just keeping claims adjusters on staff, alleviate that burden, bring it to us. And at the same time, we will customize that offering, so it looks just like it would if it was housed inside your own organization. We'll pick up the phone and answer it as though we're working for the carrier. So it still looks exactly like you. And we've had great success in doing it. I think that we're still at the very, very early stages. And I think the potential in that particular segment of our business is quite large as we look to the future.

Good. Good. So I do want to sort of pull the group and get your thoughts about fourth quarter organic and what you're feeling for next year. But before I do, I just want to mention, you probably have already likely seen this, we've added a new page to the CFO commentary document, Page 8. It's based on feedback, I guess, we've been receiving from the investment community as we talk about these large lumpy life sales or accounting noise from 606, et cetera. And so this page tries to actually levelize for that, so you can actually try to analyze the underlying organic trends of our business. So with that said, maybe I'll go down the row here and maybe talk about what you're seeing for fourth quarter and full year '26.

Yes. So for the fourth quarter for the Americas retail P&C, we believe 5% is what we will hit, and we think 5% for calendar year 2026. For the specialty business, we believe 5% organic in the fourth quarter and 6% for full year 2026.

So for U.K. and EMEA, we think 6% for the fourth quarter and 5% for 2026, so pretty consistent. For Asia Pac, we think we'll be about flat in the fourth quarter, cleaned up a little bit in Asia. So we're looking at 3% for 2026.

And Tom, reinsurance?

Reinsurance, as I said before, has had a great year this year. It will be 10% up in Q4, and we expect today that we'll be able to drive about 10% in 2026.

Bill?

Yes, I think Q4 for us looks about 2% organic, but 4% next year, a little bit better.

Scott?

7% and 7%, I would say around 7% for the fourth quarter, and the business looks strong, and we anticipate right in that range for next year as well.

Great. Thanks. So that -- I guess, if you're looking at that same page, that rolls up to about 5% overall in the fourth quarter and 6% for full year 2026. Doug, do you want to have any comments on that?

Sure. Thanks for let me borrow your mic for a second. Yes, I think that maybe now is a good time to talk about Page 8. We heard you loud and clear. We think that it's a lot easier for you to understand what's going on in our underlying organic growth when we laid on a table. Admittedly, we're giving this to you all in words in the past, but a picture paints a thousand words, and I think this is completely understandable why we were hearing from you about, can you lay this out and table so that we can see what's going on with your underlying growth. We have split the table into 2 parts. The upper part is what we'd like to refer to as kind of the noise that happens. We have lumpy live sales, and then we also have changes in our deferred revenue assumptions that we -- when we go through our annual reviews on that, that can bring some noise to it. What I found interesting when we put this table together is that when you round the whole percentages, there really -- it shows you that the noise is not all that frequent. It's not all that significant. So admittedly, maybe in the past, we are devoting more words to these items than they were really causing the noise to see. But there are a few quarters where there's some items that you should -- that you can see coming there. The bottom part of that table is really what I think that you were plumbing for. And you were trying to see what's the underlying organic growth for each of these divisions around the world. We've given it to you. You heard the guys talk about it today, and it shows you the health of our business. So when we sit here and say that we have -- that we're looking at the fourth quarter and next year, you can see here that the business when we say that is performing a lot -- next year looks a lot like this year, it's fairly consistent when you come across. The guys highlighted some of the differences and what we've done to -- like, for instance, in APAC, we'll have a better year there because of our Asia operations. So we hope that this table gives you -- shows you the substance of what's going on in our business, and it pulls out the noise. When we get to our January earnings call, we will make sure you have all the information that you need in order to see the underlying performance versus some of the noise that might pop up because of the lumpy life sales or for the change in deferred revenue accounts. So we hope this table helps. You asked for it. We've given it to you. We can take more input on it, but we thought today was a good day for us to show that to you and roll it out so you can get an understanding of what's going on in the business on the underlying organic.

Thanks. So maybe we'll open it up for Q&A now on organic. We have 5, 10 minutes. So anyone have any questions? There will be mics coming around.

Yaron Kinar with Mizuho. For as long as I remember, you've been talking about when you go and compete, 90% of the time you're competing against smaller businesses. At the same time, we are seeing some of the global brokers moving down market. How is it that we're still that 90% with that move? When do you expect maybe to see that 90% to start creeping down? And when you do run up against some of those global competitors or some of those larger PE sponsored roll-ups, how do you compete against them? How well do you do relative to that other 90% of the time?

Sure. Mike and Patrick, do you guys may want to tag team that one?

Yes. I mean -- okay. So let me answer the back half of your question first, how we compete against maybe some of the PE roll-ups that are now of significant size. We've learned a lot in joining forces with AP. There were a lot of things that they were endeavoring to do. And I think you've heard from Doug and Pat and myself even over this period of time that we were courting AP that they remind us of who we were about 10 or 12 years ago, and how they utilize their data and how they bring things to market and the investments they made. I think that's pretty common when you look at some of the other PE roll-ups. They haven't used their free cash to invest back into the business in the same way that we have. And so I do think that, that -- and we always talk about building the moat, either we can build that moat between our competitors, whether they're smaller competitors or PE-backed competitors or even the likes of Marsh, Aon and Willis as comparably sized competitors. And I'll tell you, it is always a bit of an arms race when you think about any investments you make into your company relative to data and analytics or otherwise. I'm really proud of our team. We were recognized by Lloyd's for Gallagher Drive. We look at and hear from consultants that look at all of our competitors and how we differentiate ourselves at the point of sale through technology. And we stand at the very head of the class in most key areas. And so look, it's our job to continue to build that moat. Quite frankly, I'm not really concerned whether it's 90% of the time we compete against someone who's smaller or 60% of the time we compete against someone smaller because I think we can go toe-to-toe with anybody. And we're building the moat to do so, if that answers your question.

So when I say 90%, I mean every time we compete not against Marsh or Aon. So it's just Marsh or Aon that are bigger than us. And frankly, I expect to outpace them in the middle market. So I think it will hold at 90%.

Next question? Josh.

Josh Shanker, Bank of America, and I'm certainly not asking you to comment on a competitor's acquisition. But just style-wise, a very small competitor of yours, Baldwin acquired this business CAC recently. And I'm not so familiar with all these acquisition targets, but they described CAC as having pulled off some miraculous abilities to compete with Marsh and Aon and presumably Gallagher. And here's a small company that's able to do it in a very small way. They may be overstating the case to some extent. But when we hear about smaller insurance agencies and brokerages that have the capability of developing a competitive offering, it seems strange with all your capabilities that anyone could, in 10 years, really create a business from scratch that could do such things. Is it possible to create a business from scratch that can compete with Gallagher, that can compete with Marsh? Aon? Just some thoughts there.

Yes. Of course, I mean, CAC is a great business, but CAC gets a start from JLT. So they're the leaders of that business were started as the U.S. build-out of JLT. They came here, JLT sold to Marsh, then you've got some people that are really talented people looking for a home, and they chose to do that home at CAC with Cobbs Allen, which was a local Birmingham broker. They pulled together some really solid niche talent. So when I say that data and analytics is #2, it is still the person at the point of sale that really knows energy, really knows marine, that sets people apart. And if you can pull together teams that are really good in certain sectors, you're going to have outsized growth. I think CAC on top of Baldwin as the specialty component with Baldwin being the middle market and small business, it's a great acquisition for both of them. And this is the best industry in the world. There's lots of opportunities as we've seen from the Main Street broker indicator to pulling together a really strong team of private equity people in New York. If you can do the niches really well, you can escalate yourself in this business, but that doesn't come into our market share. It just means there's other good competition that would have been JLT or would have been Marsh and now it's CAC, Baldwin.

How do we tie that back to ourselves, though? If you think about what we're doing and the muscle that we build every single day. For Gallagher, I said that when we were a very small company prior to when we went public, we were always punching above the way. And there are those people out there that can do that. But today, it's all the tools that we have that takes the wonder away from the transaction. What we're really good at in our industry is telling stories. What we're really trying to do right now is to take that storytelling out and give facts, give information coming from our data that says, here's what's actually happening inside of the industry in our business right now. While they've got very good talent inside of CAC that can compete in energy space, in construction, in certain industries. The next generation of buyer inside of those companies could be looking for facts. They just don't have the depth of information.

We have time for 2 more questions and we're running a little bit behind. We'll have more time at the end.

It's Alex Scott from Barclays. I was just hoping you could comment a bit on the assumption changes and just what those are, if they have any impact on the way revenue will come in over the next couple of years?

All right. So the question is on the top part of the Page 8, I think, Alex, what you're asking about. So what happens is with ASC 606 accounting, you have to measure your service delivery speed and then you have to defer revenues because if you're not servicing 100% of that policy placement on that date, you have to defer revenues going forward. And we spent a lot of time talking about it since this new accounting was put in, I don't know, 8 years ago, it creates some noise. The punchline is, is that every year, we've been improving our service, so as a result of that, there are some times where we can recognize some additional income because our service delivery becomes faster. That's going to happen again this year. There is no question we're knee deep in this, where our service delivery is improving. I don't think it's going to improve at the same rate as it did last year based on our early look. So it's creating a difficult compare. So this is more of a 2024 issue than it is a '25. But if I've got to grow over that number last year, it's a tougher grow over. So it's purely accounting. It has nothing to do with how much we sell, how much we lose, what's going on with rates, but my service delivery as it's improving can be less in this year than it was last year. And that's what I'm early on, I'm seeing that. We look at this once a year primarily, and that's where we are in the quarter. So last year, we got a little bit of a benefit. This year, I don't know if we're going to get as much benefit. So it produces a headwind. But again, it's accounting noise. It clouds the underlying performance of the business. Nothing for the folks here at all to even consider. We spend a lot of time in our management meetings ignore that number, go out, sell more insurance, retain your clients, bring value. The accounting is what it is. So I don't know if that helps, Alex or not.

Great. Maybe one last question. We'll have time at the end for another one or more questions. Rob?

Rob Cox, Goldman Sachs. Tom, a question for you on reinsurance. You talked about a number of things helping the business there, alternative capital, the new facultative facility. I'm assuming you don't think the industry is going to grow 10% in this question, but could you just maybe give us some more color on how you think -- how we bridge the gap between what the industry is going to grow next year and what Gallagher is going to grow? And should we be thinking about a different quarterly cadence this year given the 20% reinsurance brokerage comp in the first quarter?

So I'll let Doug talk about how the revenue phases in, in terms of the growth. We feel very good about the 10% as we come into next year because on a weighted basis, our new business opportunities are stronger than they were this year. But we're also fighting a headwind. We know that. We're fighting the fact that cat property is coming off, and it's coming off pretty significantly during the last quarter of this year. So carriers wait to determine when they want to go in. We're seeing rate adjusted or risk-adjusted down more than 10%. And so in our entire process of going through the budget, we think about where we are in terms of new business that we've got booked, the new business that we've got coming in the pipeline and what the weight is, we feel very good about the numbers that we're looking at for 2026.

All right. Well, maybe we'll take a 5-minute break. Like I said, we'll have additional time at the end of this -- the next session for Q&A. So we'll take a 5-minute break, and we'll resume in call it, 9:40. Thanks. [Break]

All right. Are we back on the webcast?

You may proceed.

All right. So welcome back, everyone, from the break. We're going to go on to the second of the 2 topics, talk about M&A and how that drives shareholder value, how it's differentiated strategy for us. I mean Pat hit it on the front end. There's 60,000 or so brokerage firms across sort of our key markets of the U.S., Canada, U.K., Australia and New Zealand that we think we can potentially execute on or has the potential opportunity for a tuck-in type of deal over the long run. So maybe let's first lay out our strategy in terms of how we think about M&A and the tuck-ins that we're looking at. Tom, do you want to hit that?

Sure. I'd be happy to. We've been doing tuck-in acquisitions since we went public back in the '80s, and it's been an incredibly, incredibly important part of who we are and what we're about. When you think about our process, and as Ray said, there are 60,000 agencies around the world, 30,000 of those are in the United States alone. And then there are 30,000 that we kind of believe exists around the rest of the world. And during the last 30 years of being publicly traded, almost 40 years now publicly traded, it is 40 years of being publicly traded now. We have used that as a tool to help continue to buy the brains and the expertise in various practice groups globally. We're targeting businesses that are less than $10 million of revenue typically. We will do those larger acquisitions every single year. There'll be 1 or 2 or 3 that are big. But for the most part, we're targeting smaller operations. The reason why we're targeting those is because we know we can understand who they are, what they're about very quickly and very easily. When you think about an agency, if I walk in the front door, I know whether or not this is a business that is committed to the clients, committed to the team, and that's what we're looking for is a culture that fits with ours. They also have to be doing better than just running a family. They've got to be running a good business. That means that they're growing, but they've got organic growth year in, year out. They might have a specialism. Then on top of that, they know how to make money.

Mike, do you want to maybe hit on the U.S. opportunity?

Yes. I think Tom said it, I mean, look, we're -- we measure by culture first, right? Let's get the culture part right. I think what you heard from Pat as well, I think there's sort of a differentiation in the M&A field right now and someone mentioned PE acquirers, and there's still a market for that. We've made it very clear to folks that engage with us in an M&A conversation that things will change, but they're going to change for the better, and they're going to change to improve not only what your folks do every single day, make them more effective and efficient, but improve the experience for your customer, and that's what they all care about. And so we think that narrative is now becoming more favorable to a lot of acquisition targets, the 30,000 that Tom mentioned, they see that, yes, if they change, they can get access to really unique things, the Gallagher Drive platform I talked about and the AP reaction to that, having all of their information now live on Gallagher Drive. So I think from our standpoint, we're as bullish as we've ever been about the M&A environment, not only between that $5 million to $20 million size agency that needs a perpetuation plan, but also ones that are larger than that, that also have perpetuation challenges but want capabilities and expertise that they just can't build on their own at their size.

Anything different about outside the U.S. or the opportunity, Pat?

I don't think so. I think the insurance brokerage marketplace outside of the United States is equally fragmented. If you probably combine Canada, U.K., Australia, New Zealand and maybe a little Lat Am, call it 30,000 other agents and brokers out there that are available for potential acquisitions. So we're still looking for the same thing, the entrepreneurial spirit, the culture and looking to take the next big step, but I think there's equal fragmentation and equal opportunity outside of the U.S.

Great. And Mike, you brought up Accretive in that piece, the specialty piece of AP. What about in terms of just the specialty business outside of AP? And sort of what are you guys looking for from the M&A side?

Yes. So our specialty business, which is inclusive of RPS, ARTEX, our affinity business, our program and pool administration business. We've been an active acquirer since 2010, over 40 mergers and acquisitions during that time frame. And when we look at the landscape of opportunities, this industry always fascinates me. The 2 individuals that start a very unique program that build it out, build the distribution chain, those are perfect for what we've built within specialty in our program business to add on. And so we're actively out there talking to those folks. It doesn't just have to be an open wholesale. It can be in a very bespoke solution-oriented program that they want a wider distribution channel. And now with $4.5 billion in revenue, 2,000 producers on the retail side in the U.S., we have that distribution channel. We have that access to the customer that they're hungry for. So I'm as bullish about our specialty business as I am about our retail business.

Great. And Tom, maybe outside of the core geographies that we've talked about, what does the opportunity set look like?

The opportunities are tremendous for us outside of them. It really important. A lot of people come up and ask me, what's going on in Europe? When are you going to be in Europe? When we find the right partner, we're going to be in Europe. We're not in a hurry. There have been plenty of opportunities for us to just go in and buy, but we're absolutely trying to stick to what we do incredibly well, and that is make certain that we know them, make certain that we know the culture that they run a good business. One of the ways that we do that is we work with our specialty team in the U.K. Business trades, as you know, throughout the world and it comes into London. If they want to think about becoming a merger partner to us, trading with us is a very good way for us to get to know each other. On top of that, we run our own global network called Gallagher Global Network, really fascinating name. And what we try to do is we try to make certain that they all support our business in geographies that we are not in. And so we get to know each other very well over a period of time. We host meetings annually and get them to spend time with us and talk about the trade that we can develop altogether. What a great way to get to know people.

And Bill, what about the benefits side of the M&A strategy?

Yes, very similar to what you've heard. Since 2010, we've had over 200 mergers at GBS and a big part of that is in the benefit space. We're also looking for other business lines. Remember, anchoring back to how do we help the employer. And so when you think about the benefit space, but there's also the financial business lines, we think there's a big opportunity out there for defined contribution and wealth. Most of those are combined these days. And our clients are asking us to help them with financial well-being more than ever before. Historically, going back -- let's say, 10 years ago, the value proposition was funds, fees, fiduciary, 3Fs for retirement plan. Now they want financial well-being as well. And so the combination of education, but also bringing in financial planners for their employees is in demand. So we see that as being a real big opportunity for us to grow. We'll always look for opportunities in the talent space as well if it's strategic recurring revenue and things of that nature, but lots of opportunity in every country that we're working in.

Perfect. Scott, do you want to talk about M&A opportunities?

Yes. We're not quite as acquisitive as the brokerage business. And I think primarily because there just aren't as many opportunities for us to buy good quality organizations. If you've been watching us over the last couple of years, we actually have made a number of very targeted purchases. And what they are enabling us to do is expand our -- either geographic reach or it adds specialty capabilities into our services that we're providing across the clients, whether it's the carriers, or the large self-insureds. A couple of notable acquisitions recently. We just did one last month that we announced in the safety space, Safe T Professionals. So that -- as I mentioned in the construction space, we're building up that capability. So that was very targeted. Earlier this year, we bought W K Webster. That got us into the marine and cargo space, something that we didn't have capabilities in. They actually have a global footprint. So we're kind of in all corners of the globe instantaneously. A year prior to that, we acquired MPMG, My Plan Manager Group down in Australia that got us into the disability claim handling space. So fairly targeted. And I wouldn't expect that you would see -- we're not in the game just to add volume. It's adding capabilities and in particular, specialized capabilities.

Great. Thanks, Scott. I guess what do we typically hear from merger partners is why they're choosing Gallagher to part -- I don't know, Patrick, do you have any thoughts or experience on that?

Sure. So number one, frankly, is that we're a broker run by brokers, not a broker run by bankers. So everybody who's sitting up here and everybody who's in a senior leadership role in the United States and the U.K. grew up doing this business. And so we empathize and can put ourselves in the shoes of these people that are trying to take the next step and they like that. The second one is, obviously, they want the opportunity to write any account of any complexity anywhere in the world. So if you're sitting there as a $10 million broker in Green Bay, you've probably got some specialism, maybe it's foundries or manufacturing, but you have friends that are real estate people that are banks, that are construction and you want the opportunity to go and write those accounts and so you can write those accounts now. Don't forget all the digital and data and analytics stuff that we're putting in front of them that they look at, they know they want, but they can't make that investment in that. And therefore, they're looking at off-the-shelf opportunities to try and say that they can, but they can't. So they want to get into the next generation of insurance broking. The global footprint plus the footprint of all our different ancillary businesses. So the fact that we are global, the fact that we have a wholesaler, the fact that we have the data out of Gallagher Bassett and handle claims, the fact that we have captive businesses, the fact that we're informed by the reinsurance community, that is very appetizing to the potential merger partner. I would add in our advancements in the Centers of Excellence, I know managing and handling the back office of an insurance broker, if you can do it better, faster with better quality and efficiency, people can't invest in that on their own. The vendors for that, that are in India trying to serve is not the same as owning your own Centers of Excellence and doing it the right way every time. And then I'd say more outside of the U.S., but increasingly in the U.S., too, through our marketing brand. Our brand is getting stronger with potential customers. They see that. And they see if they're walking in as the Jones agency, it's not as powerful as walking in as Gallagher, the global brand that we become.

Anything to add on the specialty side, Mike, in terms of M&A?

Yes. I think everything Patrick said around data and information. But I would say, look, our organization, the way it's been set up is a structural gift, having a retail distribution, having a wholesale and specialty distribution, having a third-party administrator, having access to the reinsurance marketplace, alternative markets in our captive operations. There's not another broker out there that has a structure like that. So when you talk to in the specialty area, how can I grow faster if I join Gallagher? Well, you've got -- I mentioned, how can we build that moat? Well, we've got the retail distribution with 2,000 producers out there from a retail perspective. We've got the data and analytics. We're talking at the break about active downloads of claim information from our portfolio, being able to use that to create bespoke solutions in the most narrow vertical that we possibly can using our specialty business to build it. So whether we're building it organically to build that moat out or acquiring it and give that party that we've acquired access to our distribution, access to our claims, third-party administration, access to our reinsurance capabilities, 1 plus 1 equals 4, 5 and 6. And so I'm extremely bullish about our opportunities because we have a great story to tell with everything we've built on top of the structural gift we have as an organization to be able to bring all those solutions to the point of sale.

That's the P&C angle. Bill, do you want to hit benefits in terms of why people want to join us?

Yes, very similar story, but something Tom said, I want to just emphasize again, we walk away from a lot of merger opportunities because the fit isn't there. Cultural fit is really, really important to us. Do they care about their clients? Do they care about their people? I look at somebody and I think about would I have this person over to my house for dinner. If I go, [ eh ], then I' probably not going to be a good fit at Gallagher. I take that very seriously. And getting to know them and what their motivation, what they're trying to get done. And you'll find the folks who want to join GBS, it's really -- they're excited about all the talent we have. Some of them know people that work at GBS, and they know it's a great culture, and they have the tools and the resources. And they have those relationships that Patrick talked about, but just don't have the capability to go win that bigger opportunity. And what's interesting, it's on the organic recruits as well. We recruit from all of our competitors, and we go after some of the big rainmakers, big books of business. And they're excited to get here and they find out they have the capabilities they were hoping would be there, but they're more available, more accessible. The culture is great because people are collaborative. We want to help them win. We're seeing that with AssuredPartners already. Our teams have organically gotten together and are working on prospects together and sharing ideas on how this thing works. So the mergers that want to join us, they know us too. It isn't about the price on the agreement. It is about the fit. And the ones that do the best with us are the ones that want to continue to grow a professional organization. We love those kinds of folks and we go after them all day long.

Yes. And you brought up AssuredPartners again, but I don't know, Patrick, do you want to give us an update on how integration and other milestones are progressing at AP?

Sure. So obviously, a pretty big deal for us, but it's still -- when we talk culture, we mean it at Gallagher. And so first and foremost for us is getting them to understand the culture. Within about 60 days of that acquisition, 1 of the 5 to 6 senior executives were in 90% of their offices. So we went out on a charm offensive campaign. And we went to their house to find how they're doing things to be able to make sure that we understood their business and how they would fit into our culture. It was an absolute success. There was not one of us that came back from those trips going, "Oh, no, what did we buy in XYZ town." We came back and said, they're good people. They remind us of Gallagher 10 years ago. They're going to fit into the system. They're excited about being part of Gallagher. At the same time, we then have started to invite them into our house. That's inviting them to see all the cool candy store tools that we're talking about right now. I basically got up in front of the Midwest region in the -- in the Western region last week. I said there's a couple of things that we want to do here. Number one, we want to make sure you know that we want you and that we're happy that we bought you. Can you feel that? Can you feel that from the visits to your office? Can you feel that from the visit to our offices? If you've got that, then can you think of a couple of different things in the candy store that you can take back to each and every client of yours? Just 1, 2 things and say, hey, client, this deal is better for you because you are now going to get access to this. And number three, can you actually feel that you're going to double the size of the book of business you personally have as a producer within AssuredPartners now that you're at Gallagher, where you can do things more efficiently, you can do things with better quality and you can do things on a grander scale. And I think from that, we call that the hearts and minds tour. We'll be done with that in the middle of January. I think it's an unbelievably unique position to have the retailers again talking to the wholesalers, learning from the reinsurance. We had our people in from London. It was an unbelievable opportunity to get them culturally fit and have them understand the strategic advantage that they now have. Then you get into operations. And so we've got 14 work streams. Everybody -- we have system conversions going on in 2026. We've got an HR work stream. We've got legal. We're going to be live on our HR system right now. Travel and entertainment, treasury will be on [ 1/1 ]. Look, we're acquirers. And in this position, AssuredPartners was going to either try and go public or sell to a public. We have a cruise ship that is exactly how our systems operate, and we do 70 to 80 acquisitions a year. We are just doing that with AssuredPartners on a grander scale of like 300 acquisitions over the course of the 1.5 years, and we know how to do them. Each work stream is working extremely well. Everything will come down to people, then technology, then the organizational structure, but we've already made great moves on the organizational structure. We feel like we are in a really good position to start 2026 and get through this integration as quickly and as fun as it should be.

Great. Mike, Bill, Tom, you've been in some of these meetings with the AP folks. Anything to add from your perspective?

Yes. I mean it's been an amazing experience. As Patrick put it, we look at, in essence, 300 unique acquisitions, and we're really good at those. We always say in our company, now 70,000 strong that we work really hard every day to make this company as small as possible. And everything Patrick spoke to is how you make the company as small as possible. The way I look at it as well, not only just orientating them to what they have access to, but how are we measuring wins together. It's too bad, my daughter who was sitting in the back of the room. She's a producer here in New York. One of her wins this year was a win with an AP producer in Oregon. She was calling on a prospect in Oregon. They liked the Gallagher value proposition. AP, this is before we closed, was also calling on it. They chose Gallagher, but they said, now that you've closed, can I have some local representation, some boots on the ground in case something happens. And so of course, in a typical Gallagher fashion, we share the account. The client gets the best of both worlds. They get the capabilities and expertise. They get the local boots on the ground and everyone wins. And we've got countless stories just in 90 days in how that's happened. So that tells me that we're making the company as small as possible because we're winning together. And that's the goal for 2026 on top of everything Patrick spoke of in terms of getting them on our system and getting them part of the Gallagher network.

Bill anything to add?

Yes. Similarly, going around with the hearts and minds, getting to know people, talking to them and so forth, they're so engaged and turned on by joining Gallagher. And you get to know what they're doing, and it sounds a lot of what we're trying to do as well in terms of take care of the client with the data. We went and visited an office in Maryland, where they have -- they call it a center of excellence. It's an onshore center of excellence that's all more about middle office. And they're able to be -- think about this, really smart people, data analysts and actuaries and compliance people working together as opposed to across a broad geography. In the same office, they're brainstorming, whiteboarding and all this kind of good stuff. And we think we're going to be able to take an idea of like that from them and apply it to GBS as well, have pockets of these centers of excellence instead of trying to have an actuary or an underwriter in every office, really have a center of excellence onshore as well. We're still working with our Gallagher Center of Excellence offshore for the back office. But really I think we get a lot from that. There's some really amazing talent at AssuredPartners. I have really been impressed by the folks I've met there.

Great. Maybe we'll open up for Q&A on the M&A side. There's going to be mics coming around shortly.

Focusing on organic growth for acquisitions. A couple of Willis and Baldwin have both talked about their recent acquisitions being able to accelerate their organic growth fairly meaningfully in the coming year, even despite kind of the current market conditions. And then on the other hand, you've got Marsh, which just talked about kind of McGriff's organic kind of tempering a bit given the environment. Maybe you can talk about kind of what's Gallagher's experience with organic growth and acquisitions, especially if we can focus on AP. I know, Mike, you also touched on working with programs and SmartMarket initiatives, but if you could unpack that, that would be great.

Mike and Patrick?

Yes. I would say -- so from a retail perspective, that's why we're doing many of these meetings to give them access to a lot of these tools and resources right now. So as a retailer, what were the reasons why you weren't winning? Did you not have access to information? Did you not have access to specialization? So getting them connected with our people and our systems to be able to be out in front of their clients, selling CORE360 and all that comes with it. What you were just talking about, though, is, to me, one of the most interesting things is just trading better together. That's why AP was so interesting to us. Quite frankly, it's why Woodruff was so interesting to us, because there's a lot of trade that goes into the London market on their book of business. There's a lot of opportunities with Accretive from a reinsurance perspective. Tom talked about their pipeline. Some of that pipeline includes the programs that Accretive had built or acquired over many, many years and how we can make a play for the reinsurance behind some of those programs that they already have. How can we just trade better together? RPS had a trading relationship with AP, about $100 million to $150 million of premium, but we think that should be double or triple as we get them closer with our people, as our people surround them in their local offices, build that rapport and then narrow the field of wholesalers that they were trading at to our 5 approved wholesalers. So there's some natural things from an organic perspective that we believe will come true through the acquisition not only of AP, but also Woodruff. But quite frankly, that's how we approach nearly every acquisition. We look at how do we speed up the retail organic by giving them tool and resources and then how do we come in behind with specialized program and resources that maybe they're trading with other wholesalers. And as we consolidate that, there'll be an inherent organic advantage. Does that make sense?

Mike talked about the opportunities, but -- and that's why we're doing the hearts and minds. You've got all these opportunities if their team sticks around and utilizes the tools that we've created, this is going to be an organic success. If their people don't like working at Gallagher, that's going to be a problem as people start to -- the books of business are in the hands of the producers. So you got to make the producers stay. But if the producers stay and they use the candy store, it's going to be fantastic. And we're pretty darn sure that people at AssuredPartners like being at Gallagher, and that's not going to be a drain on us as we go through the '26 and '27, where it might be with some of the other deals.

Dave?

David Motemaden from Evercore ISI. Just on -- I think one of the interesting parts of AP was just a unique deal pipeline. Could you just help me think through like I think it was 90% of transactions that AP did, you guys did not see. So has that been incrementally additive to your pipeline for M&A as we go through next year? And then relatedly, I think you had also talked about putting AP business on those panels. Is there any way you could help us size the revenue opportunity from that? And if that will be included in Gallagher's organic? Or is that going to be included in inorganic through AP?

Why don't you take the panels?

Go ahead.

Go ahead, I'll take second part. Go ahead and do the first part of question and then I'll chime in on how we're going to go.

Yes. So I mean, I think your first question around the M&A pipeline that AP had built and ultimately combining their deal teams with our teams. You're exactly right. We told you, I think, 6 or 8 months ago that many of the acquisitions that they had done over their period of time since 2011, many of those we never saw. And so they were really good at getting into smaller geographies, Tier 2 and Tier 3 cities, and we believe that will continue going forward. That lull when the DOJ was doing their inquiry, they weren't really -- they weren't actively pursuing. So we're in the process right now of revamping that and building that up. But make no mistake, we have a significant number of people across the country, including every one of our branch leaders that are out talking to independent agents and brokers every single day. So we do believe that, that pipeline will continue to increase throughout '26 and into '27. On the panel side, yes, effective January 1, they'll receive the terms and conditions. They'll receive the compensation associated with that. And I'll let Doug speak to how we frame that from an organic perspective.

All right. Is this on?

All right. We can hear you.

All right. Can you hear me?

Yes.

All right. First and foremost, the way it will be accounted for is this. And let's go back to Haley's example. She places the business in conjunction with an AssuredPartners broker in the Northwest. Haley is in the New York office. Her portion of that sale, that new business sale will go into Gallagher's organic. If she commissioned shares with the producer in the Northwest, that would go into AssuredPartners books and records during the first 12 months and would never be accounted for as organic in the way we account for it. Inherently because we keep acquisitions out of our organic calculations for the first 12 months while they're part of us, we understate our organic growth and what you see on -- when we publish our numbers. A different example might be is an AssuredPartners broker who has traditionally used wholesaler XYZ, they decide to use RPS. They pick up the phone, RPS places the wholesaler on it. RPS would get the organic growth for that, so that would be in our numbers. So trading across divisions would be counted as new business for our wholesaler. Same thing in the London market. That would go into our organic. When you look at what's happening with AP, it's a different acquisition. It's much larger of scale. Our tuck-in strategy, we have found that how much does M&A -- so my answer on AP might be different than what we found in the past. We probably understate our organic growth by maybe 0.5 point, something like that in Gallagher's number because of this first year excitement wins that happened. It's hard to carve it out. It's hard to differentiate. But if it goes into different P&Ls, it naturally captures itself. So what do we think is the opportunity for this for AP? When you look at what we expect for synergies on page -- I'll get to it when I have my comment when we recap AP, we're looking at $260 million to $280 million, I think, is what it says in there of synergies coming from AP. Some of that is revenue, but not very much. That's mostly a cost number. So I think I've answered the question, wouldn't technically go into organic in certain cases, will in other cases. But by and large, we have 1 year of wait until it starts rolling into our numbers.

Could I just make one more statement about the pipeline. So while Mike is right, there was a lull as you go from selling a company through the DOJ stuff. But remember this, inherent in the AP is very similar to what's been going on with Gallagher for a long time. The field is empowered to go find their friends down the street and do acquisitions in their local community, in their local state, in their region. So we have hunters not only at corporate that are out working with the consultants but -- and also calling on some of the top 150. But then we empower the head of our Missouri office to know every single person in Missouri. That is part of AP's DNA as well. So they maybe got their friends where the 90% of the deals that we didn't get. We got our friends. Now we both have friends, we'll be getting more deals.

Maybe time for one more question before we move on?

Charlie Lederer of BMO. Just on Pat's comments on keeping producers. So I think you put in the 10-Q that you granted about $315 million to AssuredPartners employees after the deal closed. How does that compare to what you initially expected? And are there any producers -- are there any producer retention stats you can share so far? Or how are you feeling about that?

Why don't you do the pool and then we can...

Right. So yes, the information in the financial statements is interesting. There were success bonuses that went into that number that was -- really came out of the GTCR money. We have to disclose it because it's ended up going to our employees. The pool that we gave away, right now, we touched about 600 different folks. We went name by name by name, and we found that for the folks that we are giving awards to, we are penetrated. We do -- we haven't had a lot of pushback in that. I think there's been a good recognition that we found the right folks inside of the organization. The good thing about our model is it's not a onetime reload. We don't give you equity today, and that's it. The PE model is to load folks up and then wait 5 years and load folks up and then load folks 5 years. Folks that come into our LTIP plans get considered for additional equity every year. So we think that we've done a really good job of touching the right people, giving them the incentives that they have in order to be with us. These are 5-year restricted shares. So they've got to work for -- they've got to be with us for 5 years to get them, but it's valued at current dollar amounts. I think we're in pretty good shape. And then when it comes to the retention, I'm not seeing anything of significance that shows that we have a departure or exit risk. In fact, I think the retention is better than ever before in AP. So I think that the message of more tools, capabilities and resources is not -- I'm not feeling the big pressure coming into my office as CFO saying, we need another pot of money to take care of folks.

I'll echo the fact that I don't feel like we have any other attrition that we wouldn't have had as Gallagher AP. I think the retention of our top people has been fantastic. I want to give a lot of credit to the team. We didn't just take the word for their senior leadership around who should get some money. We -- part of the hearts and minds in getting out to the field is taking our own pulse of who are the people that need to be retained because they are the type of people that are going to excel at Gallagher, and we don't want them at risk. And I think our teams, both on the AP leadership side and the Gallagher side have done a really good job with a pot living within that pot to get it into the right people's hands. And maybe that's one of the reasons that the attrition is so good.

Yes. One other comment on that. There's a fairness prism that goes across the AP folks and the Gallagher folks. When we look at a producer, you take a $1 million producer in Des Moines, Iowa or $1 million branch manager in Kansas City, we have to look at our own folks in that area to find out, are we giving them equity that is consistent with what we're doing with our own folks. There is a big fairness prism that goes on here that just because they joined us recently, they shouldn't be penalized for what they should have in ownership in the company. On the other hand, we shouldn't over reward folks that are coming in because our folks have been toiling with us for 20 years. And so we look at a fairness prism across organizations so that when these guys get together in Des Moines, Iowa, they are equal owners in Gallagher going one stock, one share, same valuation. This is something that was very important culturally for us is that the new folks get treated fairly with the folks that have been with us for a long time. So I just want to make sure you understand culturally, that is our guiding light on these things.

Great. Well, I think maybe we'll move to all of your prepared comments, Doug. So thanks, everyone, appreciate it.

All right. I'm going to switch over to the podium mic. I've got only a few minutes of comments here, but I think we've touched a lot of them along the way. A couple of things. Maybe I'll -- what I wanted to do is let's wrap up on growth a little bit just for a second. I think that, like I said earlier, that Page 8, a picture paints a thousand words on the organic. Please focus on the underlying organic growth. Happy to take more questions and comments on that as we improve that disclosure for you all. I think one of the things that sometimes gets lost in this is we sit back and figure out what the challenges are for us and the opportunities. Next year, we're looking at total growth of over 20%. If you think about organic, we talked about that a lot. But with our M&A, the roll-in of AssuredPartners, Woodruff, the pipeline of small deals, we still prefer small tuck-in acquisitions. The metric that was the most important with AssuredPartners is we didn't get a chance to look at 94% of their deals. Probably wouldn't have done the deal if we had been told no by 50% of those opportunities to join Gallagher initially. So we still look things forward. Over the next 24 months, we have $10 billion of free cash plus an additional level of debt without using stock, $10 billion to do M&A. So the guys up here, they're on the hunt every day, but we don't have a quota for that. We're going to take our time. We're going to buy the ones that fit best with us. None of these guys have any type of incentive to throttle their revenue through mergers and acquisitions. So we have a disciplined approach to that, and we haven't lost our focus on it. Our roll-ins are still at a nice arbitrage to our trading multiple. There's no question about that. We're still around the 10x on the tuck-in acquisitions. So I think the way I look at it, I think that we've got the next 2 or 3 years kind of in the bag for well into the double-digit total revenue growth. What does that mean? It gives us the opportunity. We didn't talk about it today. It gives us the opportunity to put that revenue over our industrial strength platforms, utilize our offshore centers of excellence, utilize our technology, utilize and deploy AI into that work. And so our chassis can hold significantly more revenue. As we come into 2026, looking at $15.5 billion, $16 billion worth of revenues, our chassis can double on that without burping in my opinion, they can ingest it. I think that on the growth side, so we've got the two-pronged growth. Just one of the things that I want to do is I want to spend a second going over our margin expectations. We spend a lot of time every quarter, that we went through this bridge. And for those of you that had a chance to update your models, thank you very much for what we've provided. I'm not changing our margin guidance from anything I told you at the end of October. And I know that many of you will be busy here over the next couple of weeks. But let me go through that margin bridge so you can get this into your models as a helper. First and foremost, the most important thing is we believe that our fourth quarter margin expansion, underlying margin expansion should be up 40 to 60 basis points, same as what we told you in October. We do have the roll-in impact of M&A and then the lost investment income because of holding so much cash for AP. In October, we talked to you about that creates 3 margin headwinds. The roll-in impact of AssuredPartners is about 100 basis points. The roll-in of other M&A is about a 40 basis point headwind and then lesser investment income is about 40 basis points. So if you adjust the margin for last year's margin for FX, I believe that our fourth quarter margin, this is exactly what I told you in October, will come in at somewhere around 31.7% in the Brokerage segment, and that still feels right today. So just please, as I know this is the time of year when you update your models and take a look at it. When I look out towards full year '26, we provided the '26 organic outlook on Page 8 of that table. What makes me feel good about that number? It is a ground-up approach. This is what the teams have rolled up factoring in all current market considerations, their outlook of what's happening with rates and exposure units, what's happening with cross-sell opportunities within ourselves, not including AssuredPartners. So I think that the number that we're showing out for next year is a lot like this year, and I think it totals to about 7% for Gallagher Bassett, 5.5% for the brokerage segment. So if we post that, I would expect in '26, our underlying margin expansion to be in that 40 to 50 basis points if we post in that mid-5% range next year. So I feel good about our picks for organic next year. That's exactly what we put in our budget, and I think that we'll have margin expansion in that. We'll have the same headwinds from investment income and the roll-in impact from M&A, but I'll give you some of that information in January in the call. And then for the Risk Management segment margin, I think we're going to be around 21% for the fourth quarter, and that we should be able to hit that for full year '26 also. So Gallagher Bassett continues to show consistent margins and in their organic environment shows some opportunity there. We didn't spend a lot of time on it, but maybe it's worth it. We are -- in our DNA is to improve our service and quality. This is something we've been working on for 20 years. You heard us say that we've got 15,000, 16,000 folks in our offshore centers of excellence. That is a powerhouse. The only -- this is -- these are our employees. It's a powerhouse that allows us to continue to view that margin expansion is possible well into the future as we continue to build out that organization. We're pretty excited about some of the AI outcomes that are happening. We're spending quite a bit of money on AI right now to deploy in our operations. So the early returns on that are exciting. It is working in certain cases, not every case, but I think that we stand in the best position to capitalize on that because we've spent 20 years standardizing and centralizing our work, and we can deploy AI across that standardized process, which will lead to better outcomes on that. So with that said, if I'm going to flip through the CFO commentary document, as you do it, Page 3 on that document is our typical modeling helpers. There's not much change on this page relative to our October earnings call, other than we've updated amortization, depreciation, of course, FX, we always do that, too. When you flip to Page 4, the reddish column is an update to our fourth quarter and full year '25 Corporate segment estimates. One tweak to mention is that our interest and banking costs, we're seeing a little less interest expense given the limited borrowing on our line of credit. So that -- you'll see that. And then we've added our first look for '26 in terms of what we think the Corporate segment should show. This is what we typically do this in December. In January, I'll give you more of the quarterly spreads on it. But I think you can see that this is our first look at '26. Turning to Page 5. This is our tax credit carryforward -- we've also added -- so we've got a big number for our tax credit carryforwards. And then we also have added a footnote that we've got $1 billion of future tax benefits related to our purchase of AssuredPartners. We haven't talked about this very recently, but the punchline this as you're thinking about our free cash flows. Whenever you arrive at EBITDAC, take it about 10%, take it times 10%, and that's about our cash taxes paid globally. So as you're thinking about cash flows, our effective cash tax rate is about 10% of our EBITDAC. Just keep that, that's a metric we've been talking about for years, and that's still holding true. Page 6 is a little noisy. We've updated our investment income table. You'll see the loss of the interest income that we earned on the cash that was sitting around for AssuredPartners. We did assume 2 further 25 basis point rate cuts next year on that page. And then -- those are the kind of the noise in those numbers there. If you get those up in your model, you'll be okay there. When you move down on Page 6 to the Brokerage segment rollover acquired revenue table, we're only a couple of weeks left in the quarter. We don't expect that to change too terribly much in our fourth quarter estimate considering we've only got 2 weeks left. And then we do -- we have sold off some little businesses there. So take a look at that in our divestiture. And then Risk Management has about $20 million, you'll see that in the footnote of rollover revenues. Next is Page 7. That's our outlook for AP. No changes from October. We feel comfortable with that. We think that we'll be at annualized run rate synergies of $160 million by the end of '26 and then in that $260 million to $280 million by early '28. I think when we get through the budget process, we'll probably have an update to that. You heard the guys talk about it. I think that we continue to see -- we become more and more bullish about the opportunities with AssuredPartners in terms of being better together, and that should lead to some even further opportunities on synergies. And then let's say, I think that's pretty much we talked about Page 8 and answer some questions on that. So to me, I think we're going to have a terrific 2025. I think that we're in this -- is about a great position coming into a new year that I've seen the organization be in, in the 20-plus years that I've been there. I think that -- to recap, you heard Pat start off, we toil in a massive industry that is growing almost as much as we are in size every year. We have no market share. We have unlimited opportunities for organic growth. We have 60,000 agents and brokers around the world that want to join -- that we'll have an opportunity to join forces with. They recognize the value proposition to be a part of us. That provides a great leverage -- the purchase to trading leverage on that arbitrage is -- continues to hold up well. And we continue to get better and better on our service offerings, I talked to you earlier about. So right now, I think that Gallagher is in a terrific position to win coming into 2026. So those were my comments, Ray.

So maybe we'll just move to Q&A. Any final Q&A? I know there's quite a bit of questions that we didn't necessarily get to. I know Tracy, you've had your hand up for a while. So maybe we'll get to you first.

Tracy Benguigui, Wolfe Research. I'm going to go back to organic revenue since I didn't ask the question earlier. Baked into your 2026 organic revenue, how much pricing decreases are you baking in? And...

Almost exactly what we saw this year.

Okay. And because there's so much bifurcation between property and casualty, I'm wondering if there's any kind of difference between fees versus commissions for casualty or property?

Our fee -- I think our clients are recognizing the value we add. We have had some -- we're having good success of getting fee increases. So I think that's baked into this. This is an assumption. So again, our organic numbers for '26 reflect everything that we see today about what could happen in '26, assuming that '26 is a lot like this year. We expect property to be down again, and that's coastal property. We expect homeowners to be up. We expect personal auto to be up. We expect casualty lines to continue to march north. I think that there's still -- there's a need for rate. So what we saw happening in rates in '25, we have reflected in our '26 estimates for organic.

So there's no difference in terms of our fee income renewals, et cetera, between property and casualty. I think that was part of your question.

David?

David Motemaden from Evercore ISI. Just a follow-up question on the group benefits, the benefits brokerage and consulting for Bill. Maybe -- so the 4% growth next year, consistent with 4% this year. Could you just talk about the moving pieces on just the employment side? We're seeing some headlines and obviously, payrolls today -- just slowing employment growth and how that might impact your business. I know health care inflation is still high, but that's been the case the last few years. It seems like the incremental trend is a little bit softer employment growth. So wondering how that bakes into your expectations?

Yes. You're asking about what we're seeing in terms of the growth for next year in terms of the unemployment or employment levels, that kind of thing?

Yes, what's baked in that for?

So majority of our revenue is not really based on commission, right? So when you think about property/casualty rates, and so forth, if it's hard, you have tailwinds, if it's soft, you have going up and down escalator. In our world, it's really more about the typical size of the employer, give or take what's happening in the employment side of things. So we negotiate our compensation usually on the front end, and we -- let's say, it's $100,000. And if they want us to make $100,000 to win the business, whether their employment goes up 10% or down 10%, we're making $100,000. It does not go up or down based on the rates of medical either. Our job is to work on their behalf to find ways to save them and mitigate those increases. So what has happened this year has been a little bit of a tailwind on our talent business. That's the project-based work to help do compensation studies, that kind of thing, there's a little softness there. So when employment is growing, our talent business will grow as well. When it's a little softer, they're facing the down escalator. But that's a smaller piece of our overall revenue.

Katie Sakys, Autonomous Research. As we kind of look at the organic growth guides by business group, can you guys kind of talk about how AssuredPartners might be impacting that outlook once we hit the 12-month mark? And where you potentially see the most upside from each of those sub-businesses as we get towards the end of next year?

You hit that? I'll do it. All right. So first of all, nothing in these numbers from AssuredPartners on that page. AssuredPartners is running about where we are. Remember, when we bought AssuredPartners, this is a well -- this is a growth company. It's got great margins in it. So I think that in terms of us, our thesis was that they were running about 1 point less than us when we bought them, maybe a little bit less that we can move that up to be similar to us. So I would think that it should -- you should see acceleration coming out of AssuredPartners as we start trading together. So if you're asking the longer-term thesis when we get into the fourth quarter of next year and we get into '27, I would say we will have substantial momentum by that time. And hopefully, that will have an opportunity. The bet is that we'll be better together, and you'll see maybe better outlook together in '27. So whatever we are going to be individually going into '27, I think we'll do better on it.

Andrew Andersen from Jefferies. Just on the 6% specialty organic growth, how are you kind of thinking about the E&S market within that? And I think earlier in the day, you were talking about building some more programs. What are kind of the offerings or services that the retail brokers are looking more of?

Yes. I would say when you break down the specialty into open wholesale, that's going to ebb and flow again with the hardness or softness in the market. So we're seeing the same trends from a property perspective as we are on the retail side and the same trends on the casualty side. When you look at the program side of the business, that's where we see the most growth opportunity because we can, as I was talking about a little bit ago, we can now start to build out programs and facilities that cater specifically not only to the legacy Gallagher book of business, but also the AP business. I also see, again, a big opportunity with the consolidation of wholesalers. AP, we believe, was trading with somewhere on the order of 80 to 100 different wholesalers. As we get that down to the 5 that we have approved, which we look at that literally every week. We have line of sight on the business. We have the data to support it. We have people whose job it is specifically to go meet with those offices, meet with those producers and coach them through the process. This is something we did about 7, 8 years ago very successfully, but it is hand-to-hand combat. You've got to show them. You've got to connect the dots for them. You have to connect them with the right wholesaler in their space, in their geography, and we have the people that are doing that every single day. So that is, I think, a huge opportunity not only for RPS, but also the 4 other approved wholesalers. And we renegotiated our contracts with those 4 outside wholesalers that will ultimately benefit not only legacy Gallagher, but it will benefit the AP book of business. So I see continued aggregation there. I think it's a win for the customer. We did this not with the idea of just squeezing it down to 5 wholesalers. We did it for business purposes. When you trade with 5 people, 5 entities and something were to go wrong, you can solve it quicker, faster, better for the customer. And so that's a huge piece of what we're going to accomplish in 2026.

Dominick Cioffi with Wells Fargo. Just a quick question related to the AP deal and the timing of synergies. So 2026 -- or by the end of 2026, $160 million of synergies expected. I was wondering if you can give a little bit more information on the timing of those synergies and if you expect anything in the fourth quarter?

I would not expect anything here in the fourth quarter when it comes to synergies. Okay. So -- and we come out for next year. This is a -- this -- I think you're going to start seeing synergies quickly in things like the back-office functions. I think it's easier for legal to get up and running together, finance to get up and running together, HR, you'll see those synergies. As we roll on the -- each of the locations, that will be over an 18-month period. So 300 branches will roll on over an 18-month period, probably with the lion's share of that really, really the first momentum on that will be February or March when we start seeing the first ones, kind of coming on and starting to roll in. The revenue synergies, boy, wouldn't it be nice if that happen faster? We'll see it. But the reason why we say $160 million, we'll hit that number of run rate savings by the end of 2026. And then another $100 million will happen fairly quickly thereafter. So this is an 18-month journey to harvest the synergies, harvest the working better together. So this isn't a 3- to 5- to 10-year type integration.

Alex Scott from Barclays again. I want to come back to just the pricing that's embedded in the organic. And I was wondering if you could give us a ballpark of what that was for this year? And I guess why would it stay flat when we just look and take a step back on some of the carriers. I mean we have nationwide carriers talking about 18% ROEs. I think a global reinsurer said almost like a 20% ROE or something they're going to get up to. It just seems too good to be true in terms of the returns for the carriers. So like why isn't there a demand for continued price reductions that would maybe be different than last year?

No, no. We have assumed that price reductions will be similar in '26 when we arrived at these numbers as we're seeing in '25. So we've assumed same level of down. We actually are seeing a bifurcated market. If you take out coastal property and you look at what's happening with casualty rates, we think that are we at a bottom for D&O? Are we seeing an uptick in workers' comp? Medical inflation is rampant. That will show up in rate. I tend to be a little bit of a bear when it comes to the adequacy of pricing on any casualty line. I also believe that there are going to be -- we're going to be back on the replacement cost issue that we faced 2 years ago, that property values, the replacement cost of property values, we've kind of paused on that -- the stair stepping that the carriers were asking for more rate for replacement cost. So rates on coastal property might come off, same number. We've assumed that in our numbers. Casualty, I think there's still a march forward. And I think that the replacement cost on the property has got to catch up to it. I just don't believe you can rebuild for the current pricing expectations. So we have assumed exactly the same deep cuts in property for '26 that we did in '25. And the rest of it, I mean, casualty has been going up 6%, 7% a year for the last 5 years. And I still think that everything we read and what we're seeing early on in the reinsurance pricing on casualty is that there's a need for more rate on casualty.

I'm Mark Hughes, Truist. The follow-up on your property. Pat, I think you had said on the third quarter call that with a clean storm season, maybe take another step down. Doug, you're talking about kind of steady coastal declines. I wonder if you could comment on that. And then just overall property, coastal is down, but it looks like fire and allied is still up. I mean, is property as a broad class? Is it up?

I'd say as a broad class, no, it's down. I'd say, but it's primarily driven by the cat side of it. But if you take the cat out and you look at then the individual accounts across the country that are in various areas, I don't know, Michael, what would you say? Would you say it kind of comes down to risk specific? But in terms of the general outlook for next year, I'd say the continued competition is primarily in property. We had a great cat year. There just was no cat. There's a ton of ILS activity going on and a ton of ILS activity that occurred last year. And I think that you've got pressure there. You also have the comment that was made earlier on the kind of returns that these companies are getting and the fact that they do believe their rates are great and they're deploying that, yet Doug is right, casualty still is an issue. Comp is beginning to show some signs of wear and tear as well. So I think generally, overall, you got to look at property as the line that's going down.

I think there's an indicator in some of our businesses that are more property focused like Canada, Australia and New Zealand, where they don't have workers' compensation and liability rates aren't the same. You are seeing a tougher run on organic in those areas because they are so dependent 50%, 60% on property. So that would say it's not just cat, but it's not having the same rate decreases that cat are having.

Mike Zaremski from BMO. Question for Bill and the team on employee benefits. If we think back to this -- earlier this year, 1Q started out with tremendous organic growth. We've seen a bit of a decel throughout the year. And I know for the outlook, you're calling for an improvement back to more healthy levels next year. If you can talk through kind of what's been going on there.

I'm sorry, I wasn't sure I heard...

First, the decline throughout the year on organic it's the reality is you get it to some accounting seasonality.

There's definitely a lot of accounting seasonality. Half of our revenue renews on January 1. We sort of recognize half the revenue in the first quarter. And then as the year goes on, if you think about it -- let's say, we sold a business in July of the year before, and it's the January 1 renewal. That July business is now recognized in January of the next year. So if we sell exactly the same amount as last year, we'll have 0 organic, right? So we have -- when you see the smaller organic in subsequent quarters, we're actually growing. And that's the thing to take away. It is the accounting noise that you're seeing. We have a very strong benefit team, and we're doing quite well.

Matthew Heimermann, Citi. In the first panel, there was a comment about digital tools and improving retention. I was wondering if we maybe take a tour of the business, and talk about some of the things that improve the stickiness of retention, whether it's digital tools, whether it's selling administrative platforms and employee benefits. And maybe dovetail that into how material of an opportunity with the size of AP, just some of those tools on the retention. And when you talk about accelerating organic growth, how much of a component that is?

Yes. I think if your question is from a digital perspective, I think we've shared with you in the past that we know statistically that when we have a digital engagement that our retention goes up anywhere from 1 to 3 points. And we're talking about going from 94%, 95% to 97%, 98%, not insignificant on a $4.5 billion business, but we're not talking about a broken retention. We're very good at keeping our clients happy and making sure they're well advised. So I'm not sure if that is where you were headed.

Well, I was wondering if you could give more proof points around that kind of leverage for tools because I would think on the employee benefits side, maybe it's -- you're not just placing, but you're doing services, enrollment, other things. I'm just curious if there's just across the business, those types of things, how they stack up. And then the AP question is really when you talk about momentum into 2027, how much of that is really gross growth versus retention improvements just improving the net?

Yes. We always look at new net of loss. So our goal is to make sure that our new net of lost that margin is increasing. So we'll look at the same thing with AP as we start to get them involved with many of these tools and resources. One of the things I was going to say, and I think this ties into your question, about the market and whether it's property or casualty, every market creates an opportunity if you're a broker that has the tools and resources to build things, right? And I don't want to underemphasize the idea. So we just launched a 20% quota share product within RPS that can take any layer. It's underwriting agnostic. It's a follow form, and we already put it in place for one of our largest customers. And so you think about that, and the -- this particular customer's exposure base had increased 20%, and their premium stayed flat. So now this isn't a big account. It's not a fee. The client was ecstatic, right? But it's also being placed through RPS. We're there, even though the retailer is on a fee, we're able to take commission as a wholesaler. So in every market, when it's soft in certain conditions, it empowers us, especially given our structure to be able to build programs quicker because the capacity is there. The reinsurance is behind it. So the faster we can move through building out not only for legacy Gallagher, but for AP specific and then adding in the accretive business that falls into each one of the buckets of specialty and building out more facilities, you can outpace what the market is doing, and we believe we can if we continue to build facilities that solve problems for our customers with capacity that's in the marketplace and ties into every leg of the barstool from a Gallagher perspective.

And I think one of the questions was on benefits as well. So when you're thinking of Gallagher Go, think P&C, and that's something, as I said, that we started in the U.S. and then it gets legs and goes to Australia and the U.K. The U.K. has an unbelievable technology that we got through the Buck acquisition that we're now trying to take to Australia and the U.S. called Gallagher Guide. And that is another digital interface with the customer that basically says to every employee, this is what your 401(k) looks like. This is what your benefits program looks like. So we are investing in that area as well as what we call Drive on the P&C side, which is an analysis of what you should buy, how much you should buy, who you should buy it from. There is a Drive component to Gallagher Benefit Services as well that's rolling out throughout 2026 and '27. And yes, that is the stuff that AP is super excited about. They come to the career fair or whatever we call it last week, the hearts and minds stuff in our home in Rolling Meadows. That's what they want to get their hands on. And then we have the stats that say those clients are stickier.

Let me add one other thing. I believe that the -- our effort to standardize and raise our quality, specifically using a lot of our centers of excellence, we now don't make mistakes and you lose customers by making mistakes. So we are going to issue $3 million, $4 million, $5 million certificates of insurance next year -- this year. And we know that we will issue those virtually 100% right and 100% within 24 hours. That keeps a contractor from getting kicked off of a job. They got to approve their insurance, auto ID card issuance. Billing, when I got to Gallagher over 2 decades ago, we were sending out about 9 bills for every collection because we are constantly revising the bill. We don't do that now. We bill right the first time. Our write-offs on the difference between billing and what we owe to the carriers, the net amount last year, $137,000 of difference, and we're billing in this population, $60 billion of premium. So our error rate on bills just doesn't exist. Nothing works for a producer to lose an account because we screw up the service on the backside, to your point. And then the real secret is Mike hit on it, our claim advocacy group, our claim concierge group, when -- how do you know you have great insurance? You don't until you have a loss. So if you don't have the covers that were provided through our Advantage product, 30 different endorsements on our liability program that give you insurance that no other product offers. So you got more coverage. And then if you have those that can help you get your claim pay, that's how you know you have great insurance. You got to service along the way, you got to improve. I actually believe that we don't sell enough our service when we're out there in the field about how we don't make mistakes. That comes to bear when we're having that relationship. And then you tie folks in electronically or digitally, you don't make mistakes in the service. And then when they have a claim, you get it paid and you get it paid fairly. Those are how the service metrics come back to help us. And I -- our loss business is not a problem at all. We lose more customers because they just go out of business. That's the reason why. So I think that was part of your question. We measure this statistic on quality every single day.

Cave Montazeri from Deutsche Bank. On the M&A front, obviously, cultural fit is number one. But also, I'm assuming larger acquisitions, there's extra complexity, getting -- onboarding people, getting the data into your systems, et cetera. And you did mention your -- a couple of projects on the AI side you were working on. Do you think some of the new AI technology could help getting some of the data into your system in a more efficient manner? And would that make it more likely, all else equal, if you find the right cultural fit to do bigger acquisition because it will be "easier to integrate" now within your platform?

Well, listen, I'll say this. Sure, I think it will when we find the right one, but will it drive us to doing more? No. I mean that's -- you got to find the right ones before we do that. But the tools and capabilities that AI brings you in order to do diligence faster to be able to do contract review faster to do those things, it's there. But I think when it really comes -- the value comes from AI after we're together and we can deploy the AI into their daily operations is really where the value is.

Two questions that rose. One was how can 90% of your activity when it comes to competing still be against people who are smaller? Well, because there's 30,000 agents and brokers out there and your question on doing larger deals, there's $13 billion agencies. #100 on Business Insurance's list last year, did $36 million in total revenue. There's 30,000 competitors in America. That's why we have no market share. We're toiling in a world that is still a cottage industry, which I believe is going to end over time, to your point. I mean I think when you take a look at the capabilities, when you take a look at the need for data and analytics, even a middle market account will say to Patrick, Mike, Bill or whatever, why do I know I've got a good deal? What are people like me doing? When you can take literally billions of dollars of premium, sort through it by SIC code, by geography and say, people like you in the last month have renewed at X, the little guy doesn't have that. And then to Doug's point, we bring them on. So right now, we've got $350 million of acquisition activity in revenue looking at us at this very moment under LOI. That's 40 deals. So you've got 10,000 of these that matter and you've got 20,000 that are still sitting there in the petri dish. So the acquisition activity will go on forever, but the big ones out there are just not that existent. The same is true when you take a look at how can you compete 90% of the time with somebody who's smaller than you. Those 30,000 have the market. Now there's only 10,000 -- fortune 10,000 accounts, and there are millions and millions of insurance buyers in the world. That's why we compete 90% of the time with somebody who's smaller. So do we have time for one more? Should we wrap it up? One more question...

We'll go to...

Just quickly -- David Motemaden, Evercore ISI. Just a question on data centers. Do you guys think you guys will be a winner in just the data center build-out, whether that's primary broking or reinsurance? And if yes, how? And I think Tom Gallagher mentioned a specialty practice group strategy do you have on for data centers as well?

Yes. So we've been looking at this pretty intently. What I can tell you today is that we're knee-deep in it. We are touching it in the London marketplace. We're touching it in Europe. We've had some very successful wins. Our strategy, though, when you think about many of our niche and verticals and our practice groups has been a very bespoke model, right? We want to bring the right people to the table who understand whether it's property, whether it's liability, whether it's environmental, whether it's cyber, it's critical for us to bring those right people together. So you'll see more of us corralling those people. And by the way, some of those people are rather new to us. I was with our colleagues from Denver last week at our tour, and they were filling me in, specifically to your question, David, around what they're doing with data centers. They have a lot of large contractors. And what we know about the data centers and what are being built, some are being built by the names you would recognize, the Googles, the Metas, in some cases their owners, in some cases their tenants. They're being built by property owners. They're being built by private equity firms. They're being built by public universities. We're the largest insurer of universities in the country. So as these projects come to bear, we will do a bespoke model. We'll bring the right talent to the table. We're already doing it both here in the United States and in Europe. It is a big opportunity. You talk about property. Those are big property risks. We do believe there's capacity in the marketplace to tackle these large risks, and we'll be involved every step of the way, but in a very bespoke targeted model.

Tracy Benguigui, Wolfe Research. I was going to ask an AI question and follow-up in a different direction. So definitely, the broker proposition -- value proposition is much better these days for carriers, if you remember back years ago, all the pushback and remuneration. But if you look fast forward, we get this question a lot. I have my personal view. Could you see disintermediation, particularly on the smaller accounts?

Well, I think you're going to see a lot of utilization of AI for all kinds of -- right now, you can go to ChatGPT and say, how does cyber insurance work? Who sells it? What's it cover and why? And you'll get a good answer. By the way, at the end of that answer -- now this is today's ChatGPT, we'll say you should talk to an insurance professional. I don't think you're going to eliminate the need for human interface. And that's because people want insight. Now we'll see, but I had the very same question 25 years ago, the Internet is putting you out of business. You're done. And the young man said, in fact, I'd buy all my insurance online. I said you buy all your insurance online. Yes, my homeowners, my auto, everything. So that's really interesting. How much uninsured, underinsured motors coverage do you buy? And he said, "Well, what's that?" I said, I'm not going to tell you. So now how much should you have? I don't know. But I think it's more than that. When we see what we're doing with the data and analytics and the niches that we're in, when it really comes down to the end, and Mike just made the point on data centers, everybody is wild about data centers, right? But each one of them is a little different. I'm building it in this location, near this water with this owner for this reason. And it takes nuance. And I think that's never going to go away. People want to talk to people about what they think. And I feel really strongly, when you take a look at our industry, things are only getting more complicated, not easier. And so it's not that easy to say -- and by the way, if I have 4 auto dealerships on all 4 corners owned by 4 separate families, their appetite for risk is different. Every one of them. I don't want to take that much risk on my open lot. I want to do this differently than that. That's the value that we add. And I don't think that's going to go away. I think we're done with questions, Ray. Let me just make a few comments. And then -- first of all, thank you very much all of you for coming today. We really appreciate your attention and your time. Many of you, I know have followed us for many years, and we appreciate that. I'd reiterate what I've said to many of you many, many times. We are really blessed. We work in the greatest business on the planet. One of the things I comment on all the time is we are not the grease of the axle that keeps the community, the commercial community working and lubricated. Insurance is the oxygen of commerce. I can tell you from the Great Recession in '08 and '09, I can tell you from the pandemic, our clients will stop paying their people before they stop paying their insurance bill because once you stop buying your insurance, you're out. And every single time I ever gave a client an actual notice of cancellation that they couldn't pay their bill, 100% of the time, they went broke. That's how important our job is for those clients. And by the way, they get it. They understand most clients aren't big public companies with risk managers that can counsel on captives and ILS and the rest. These are people that own businesses that want to protect them. And I think we sit in a very, very unique position. The thing that differentiates us more than all of the stuff that we talked about today is our culture. That's why the AP folks are staying. We're a broker run by brokers. We understand what it's like to take care of clients. They get that. And I think together, we're going to build a heck of an enterprise. It blows my mind to hear my CFO say that in the next year, we have $10 billion to deploy in acquisitions. That, to me, is just incredible. And I can tell you, we're just getting started. So thanks for being with us today. Have a great holiday season. We really appreciate your time.