Today's Viewpoint: A MarshBerry Publication

MARSHBERRY BROKER INDEX – Q3 2022 UPDATE

Amidst the current market volatility, six publicly traded insurance brokers, as measured by MarshBerry’s Broker Index, again outperformed benchmark indices through November 8, 2022, highlighting the strong fundamentals of the insurance brokerage industry. While these brokers, as well as the S&P 500 and the Dow Jones Industrial Average (DJIA), ended the period year-to-date in negative territory, the public broker composite declined by a smaller percentage than both major indices.

The following six publicly traded insurance brokers reported their Q3 2022 results over the last few weeks: Arthur J. Gallagher & Co. (AJG), Aon plc. (AON), Brown & Brown, Inc. (BRO), Marsh & McLennan Companies, Inc. (MMC), Willis Towers Watson Public Limited Company (WTW) and BRP Group, Inc. (BRP). 

Amidst the current market volatility, these six companies, as measured by MarshBerry’s Broker Index, again outperformed benchmark indices through November 8, 2022, highlighting the strong fundamentals of the insurance brokerage industry. While these brokers, as well as the S&P 500 and the Dow Jones Industrial Average (DJIA), ended the period year-to-date in negative territory, the public broker composite declined by a smaller percentage than both major indices.  

Public Brokers Reported Slightly Lower Organic Growth Rates vs. The Prior Quarter 

Insurance brokers once again reported overall positive results for Q3 2022, which were attributed to a combination of improving new business, strong retention and continued insurance rate increases. However, overall organic growth figures reported were slightly lower in Q3 2022 vs. Q2 2022. 

Most brokers reported organic growth rates in the range of 6%-8% in the third quarter vs. 8%-10% in the second quarter. MMC reported organic revenue growth of 8% in Q3 2022, below its 10% organic growth in Q2 2022. This was MMC’s sixth consecutive quarter of 8% or higher top-line growth. BRO reported organic growth of 6.7% in Q3 2022 vs. 10.3% in the prior Q2 2022, while AJG saw organic growth of 8.4% in the same period. WTW reported organic growth of 6% year-over-year (YoY) in Q3 2022. 

AON reported 3Q22 organic growth of 5% vs. 2Q22’s 8%. AON cited ongoing strong client retention and new business generation. 

However, BRP reported organic growth that was far above the public broker group average, with Q3 2022 organic growth of 28% with double-digit growth across all sectors. BRP’s MGA of the Future segment’s organic revenue grew 80% YoY in Q3 2022, its best quarter ever, above Q2 2022’s 70% YoY. 

BRP sees their prudent investments into the business and the durability of their business model resulting in strong organic growth through the fourth quarter and into 2023. While BRP sees global economic conditions continuing to be a challenge, the company sees its business as very resilient and well positioned. 

Brokers Noted Greater Macroeconomic Challenges 

While management at many brokers cited concerns about the macroeconomic environment, many noted that their companies are well positioned for continued growth. For example, AJG Chairman, President and CEO J. Patrick Gallagher said on its Q3 2022 earnings conference call: “Our customers’ third quarter business activity was not reflective of any economic slowdown.”  

President and CEO of MMC, Daniel Glaser, noted that while the macro backdrop is becoming even more uncertain, MMC has a record of being resilient through cycles and that the company is well positioned to perform. 

AON CFO Christa Davies said on its Q3 2022 earnings call: “While we’re seeing signs of economic uncertainty, we remain confident in the strength of our firm and our financial guidance for 2022. Overall, our business is resilient, and our Aon United strategy gives us confidence in our ability to deliver results in any economic scenario.” In terms of full year 2022, AON is confident in its ability to deliver mid-single-digit or greater organic revenue growth, margin improvement and double-digit free cash flow growth. 

2022 Outlook

While many brokers saw greater uncertainty from the impact of continued inflation, federal fund rate increases and geopolitical tensions, they remained confident in their abilities to meet their growth targets for 2022. 

WTW’s outlook for the rest of 2022 remains constant based on current market conditions. This includes mid-single digit organic revenue growth and adjusted operating margin expansion for the full year 2022. After completing the total transfers of ownership of all Russian subsidiaries, WTW has readjusted their 2024 financial targets: The target revenue decreased to $9.9+ billion from the former $10+ billion and projected adjusted diluted EPS is now $17.50-$20.50, down from the prior $18.00-$21.00. WTW is committed to delivering mid-single digit organic revenue growth and 400-500 basis points of adjusted operating margin expansion. 

Glaser commented on how real GDP growth softening and rising inflation will impact the company’s growth: “Higher inflation offsets lower real GDP growth, rising interest rates, and the challenging insurance market drives a flight to quality.” The firm sees full year 2022 organic growth coming in as high-single digits and solid growth in adjusted Earnings Per Share. 

Merger & Acquisition Activity

Most brokers did not cite a slowdown in M&A activity in the third quarter. Gallagher noted on AJG’s 3Q 2022 call that the firm’s pipeline has about 50 term sheets signed or being prepared, representing nearly $400 million of annualized revenue. The firm also completed six new tuck-in brokerage mergers in the third quarter representing about $20 million of annualized revenue. 

Overall, Q3 2022 results from the public insurance brokers came in fairly strong with management teams confident around meeting their guidance for 2022. However, organic growth levels reported in Q3 2022 were slightly lower compared to the prior second quarter 2022. While the heightened macroeconomic challenges will likely continue, most view their businesses as well positioned to meet growth targets. 


The MarshBerry Broker Index is a composite of market data sourced from Yahoo Finance: BRP, BRO, AON, AJG, MMC, WTW. It is prepared for analytical purposes only. This information is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any securities, financial instruments or to participate in any particular trading strategy.

This earnings summary has been prepared by Marsh, Berry & Co., LLC. and is not intended to provide investment recommendations on any company. It is not a research report, as such term is defined by applicable laws and regulations, and it does not contain sufficient information upon which to make an investment decision. These materials are based solely on information contained in publicly available documents and Marsh, Berry & Co., LLC has not independently attempted to investigate or to verify such information. 

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