AJG, Arthur J. Gallagher & Co.
We do not assume underwriting risk on a net basis, other than with respect to de minimis amounts necessary to provide minimum or regulatory capital to organize captives, pools, specialized underwriters or risk-retention groups.
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- An insurance business, read on its underwriting result, the combined ratio, and the float it invests, rather than an earnings multiple.
- What moves the needle
- Underwriting discipline and the float. What decides it: whether the combined ratio stays below 100% so the policies make money on their own, how large the float is against equity, and what that float earns once it is invested.
- Is it a good business?
- The underwriting result is not cleanly tagged in the filings. Book value per share, the measure Berkshire is judged on, has compounded about 18% a year across the record. Whether the discipline holds through a soft market, and how the float is invested, are what the 10-K decides.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
Where the money comes from
read the 10-K →33% of revenue comes from outside the United States.
- United States67%$9.4B
- United Kingdom18%$2.5B
- Other foreign6%$886M
- Australia4%$586M
- Canada3%$395M
- New Zealand1%$207M
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record, 2016–2025
realized figures from each filing, no estimates| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $5.7B | $6.2B | $6.9B | $7.2B | $7.0B | $8.2B | $8.6B | $10.1B | $11.6B | $13.9B | $15.0B |
| Premiums earnedPremiums | $0 | $0 | $0 | $0 | — | — | — | — | — | — | $0 |
| Net incomeNet inc. | $397M | $481M | $634M | $669M | $819M | $907M | $1.1B | $970M | $1.5B | $1.5B | $1.6B |
| Return on equityROE | 11% | 11% | 14% | 13% | 13% | 11% | 12% | 9% | 7% | 6% | 7% |
| Book value / shareBVPS | $20.25 | $23.52 | $24.62 | $27.72 | $32.39 | $41.98 | $43.48 | $50.14 | $91.40 | $91.06 | $92.47 |
| Dividends / shareDiv/sh | $1.53 | $1.57 | $1.65 | $1.73 | $1.82 | $1.93 | $2.04 | $2.21 | $2.38 | $2.60 | — |
Owner’s Scorecard
Is it a good business?
- Not enough data
Premiums or claims weren't found in the filing data.
- Below the cost of equityNet income $1.5B ÷ equity $23.3B
What it earns on shareholders' capital, the underwriting result plus what the float earns invested. Durably above the ~10% cost of equity is what compounds book value.
The float
- Float —Not enough data
Loss reserves weren't found.
- Not enough data
Net investment income wasn't found.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
Management & pay
read the proxy →Two questions Buffett actually asks about pay: is stock compensation, a real expense, whatever the income statement pretends, quietly large, and is the top wildly out of line with the floor. He's no populist about it; he just wants pay that's rational and earned, and comp committees that aren't lapdogs.
- CEO pay ratio346:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio isn't proof of anything, some businesses are genuinely top-heavy in scarce skill, but a runaway figure is where Buffett starts asking whether the board is doing its job or just keeping the chair company.
- Stock-based compensation$49M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 3% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. And note the trap, the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
What the price implies
reverse-DCFA bank / financial isn't read on an owner-earnings DCF, its economics live on the balance sheet (book value, the return earned on it, and the cash the assets throw off). We don't force this lens where it doesn't belong.
What the filing emphasizes, FY2025
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Pricing power & competitionMD&A
Whether the company sets its price or takes it. Durable pricing power is the surest mark of a moat; price competition is the surest mark there isn't one.
“The insurance brokerage, reinsurance brokerage and employee benefit consulting businesses are highly competitive and many insurance brokerage, reinsurance brokerage and employee benefit consulting organizations actively compete with us in one or more areas of our business around the world.”
From the recordOperating margin13.6% now (TTM), off a 16.2% peak (FY2024) - Concentrated dependenceMD&A
What the whole business leans on, a product, a platform, a partner. Concentration cuts both ways, and the filing is where management has to admit it.
“The risk of business disruption is more pronounced in certain geographic areas where a significant portion of our business is concentrated.”
From the recordOwner-earnings margin at stake (TTM)12% - Debt terms & refinancingMD&A
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“A failure to comply with the restrictions under the agreements governing our debt could result in a default under the financing obligations or could require us to obtain waivers from our lenders for failure to comply with these restrictions.”
From the recordBalance sheet (TTM)$12.2B heavy net debt · interest covered 2.9× - Litigation & contingenciesMD&A
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“Limited protection of our intellectual property could harm our business and our ability to compete effectively, and we face the risk that our services or products may infringe upon the intellectual property rights of others.”
A judgment, not a number, weigh it against the filing yourself. - DilutionMD&A
Whether your slice quietly shrinks. New shares fund the company at the existing owner's expense.
“Holders of our common stock have no preemptive rights that entitle holders to purchase their pro rata share of any offering of shares of any class or series and, therefore, such sales or offerings could result in increased dilution to our stockholders.”
From the recordDiluted share count+3.8%/yr (FY2016→TTM) - Cyclicality & demandMD&A
How the business behaves when the economy turns. A cyclical earns its keep across the whole cycle, not at the peak.
“Moreover, premiums are cyclical in nature and may vary widely based on market conditions.”
From the recordWorst year on record5.8% operating margin (FY2017) - Regulation & policyMD&A
Rules that can rewrite the economics, tariffs, antitrust, data, export controls.
“These include, among others, the "placed-in-service" condition and requirements relating to qualified emissions reductions, coal sales to unrelated parties and at least one of the operations' owners qualifying as a "producer" of refined coal.”
A judgment, not a number, weigh it against the filing yourself.
What changed, FY2025 vs FY2024
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “Operating expense for 2024 includes banking and related fees of $3 million, external professional fees and other due diligence costs related to 2024 acquisitions of $39 million, which includes $23 million of transaction-related costs as described on page 56 in note (1), other corporate and clean ene…”
- “Actual or alleged violations could result in substantial fines, sanctions, civil or criminal penalties, debarment from government contracts, curtailment of operations in certain jurisdictions, competitive or reputational harm, litigation or regulatory action and other consequences that might adverse…”
- “Any resulting erosion of trust and confidence could make it difficult for us to attract acquisition targets or attract and retain clients, employees or investors; result in lower sustainability ratings, exclusion of our stock from sustainability-oriented indices, and reduced demand for our stock fro…”
- “Adjusted measures - Revenues (for the brokerage segment), revenues before reimbursements (for the risk management segment), net earnings, compensation expense and operating expense, respectively, each adjusted to exclude the following, as applicable: Net gains (losses) on divestitures, which are pri…”
- “However, legal proceedings and government investigations are subject to inherent uncertainties, and unfavorable rulings or other adverse events could occur, including the payment of substantial monetary damages or an injunction or other order prohibiting us from selling one or more products at all o…”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, Insurance brokers
The same industry, side by side on the underwriting lens, compare, don't rank by a single number.● marks best in the group.
| Company | Revenue | Combined ratio | Loss ratio | ROE |
|---|---|---|---|---|
| AONAon PLC | $17.2B | — | — | 40% |
| AJGArthur J. Gallagher & Co. | $13.9B | — | — | 6% |
| WTWWillis Towers Watson PLC | $9.5B | — | — | 20% |
| BROBrown & Brown, Inc. | $5.9B | — | — | 8% |