Posted on 24 Feb 2011
Arthur J. Gallagher’s chief executive, speaking last week during the annual Bank of America Merrill Lynch Insurance Conference in New York, said that although healthcare reform will do more harm than good, one benefit of the law will be to fuel the brokerage’s acquisition strategy.
Patrick J. Gallagher Jr., chairman, president and chief executive officer of the Itasca, Ill.-based firm, discussed the company’s performance and strategy for growth with investors. Touching on the topic of events affecting the firm, Mr. Gallagher said the health care reform law was not in the best interest of the nation.
“This new law is a travesty,” remarked Mr. Gallagher. “I think it is just horrible for America, but it’s great for Gallagher. Someone’s got to win and it might as well be us.”
He said the firm’s consultants are very busy explaining to clients what the law means and how much it will cost them.
“Our clients can’t figure this out,” he said, noting that the firm is spelling out to clients what the law will cost them over the next five years and what aspects of the law—such as how much it costs to add a 26-year-old to the plan—are driving the costs.
“Little [insurance agencies] can’t figure this out,” he continued.
“What this is going to do, in my opinion, is push all the smaller brokers in the benefit space out of the space, and again, that will help our acquisition opportunity,” said Mr. Gallagher.
He said the acquisition possibilities are tremendous. “We feel we are just getting started,” said Mr. Gallagher.