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Arthur J. Gallagher Buys Doyle Group, Boosts Affinity Business

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Arthur J. Gallagher & Co. (AJG - Free Report) recently acquired The Doyle Group, Inc. and its affiliates, collectively doing business as Direct To PolicyHolder. The terms of the transaction have not been revealed.

Florida-based Direct To PolicyHolder was founded in 2010.  The company is an e-commerce affinity platform operating via proprietary digital marketing protocols, attribution modeling and affinity channel marketing. It caters to acquisition, conversion and retention of professional liability (E&O) insurance policyholders in the allied healthcare and wellness fields. Thus, the addition to Arthur J. Gallagher’s portfolio will help enhance its Gallagher Affinity operations.

Arthur J. Gallagher is one of the top five global brokers, having a presence in the United States, Australia, Bermuda, Canada, the Caribbean, New Zealand and the United Kingdom.  This marks the fourth buyout in the ongoing quarter.  The company had made 17 buyouts in the year-ago quarter with estimated annualized revenues of $84.3 million. Its merger and acquisition pipeline is quite strong with about $400 million of revenues, which is expected to fuel inorganic growth. Given its solid capital position, the company is well poised to pursue more strategic buyouts.  The company targets about $1.5 billion of mergers and acquisitions with free cash and debt.

This Zacks Rank #3 (Hold) insurance broker remains focused on its long-term growth strategies of delivering organic revenue growth and pursuing strategic mergers and acquisition. It is also focused on productivity improvements and quality enhancements that should help it post sturdy numbers in the future.

Shares of Arthur J. Gallagher have gained 19.4% year to date, underperforming the industry’s rise of 25.2%. Nonetheless, the company’s efforts to ramp up its growth profile and capital position should continue to drive share price higher.



There have been a host of acquisitions in the insurance space of late, given the significant capital available. Recently, Brown & Brown’s (BRO - Free Report) unit Brown & Brown of Massachusetts, LLC acquired Poole Professional Companies. The acquisition will strengthen the acquirer’s products and services portfolio and enhance growth opportunities by catering to risk management issues faced by design professionals.

Stocks to Consider

A few better-ranked insurance brokers are eHealth (EHTH - Free Report) and Willis Towers Watson Public Limited Company .

eHealth operates through two segments and provides services like private health insurance exchange in the United States and China to families, individuals and small businesses. The company came up with average four-quarter positive surprise of 167.16%. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Willis Towers Watson Public Limited Company operates as an advisory, broking, and solutions company worldwide. It offers actuarial support, plan design, and administrative services for traditional pension and retirement savings plans. The company came up with average four-quarter positive surprise of 4.56%. The company carries a Zacks Rank #2 (Buy).

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Arthur J. Gallagher & Co. (AJG) - free report >>

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