Arthur Gallagher founded Arthur J. Gallagher & Co. in Chicago on October 1, 1927. Already a successful insurance agent when he decided to build a business of his own, Art focused on commercial insurance and also pioneered the concept of risk management. Art knew that by understanding his customers and helping them save money by identifying and reducing their risks, he would build strong relationships.
The agency continued to expand and Arthur hired two new producers. It also continued to focus on loss control. In the late ‘30s, Gallagher helped create The Hartford Group’s ground-breaking Retrospective Rating Program, which rewarded customers who minimized their losses. Gallagher also wrote Chicago’s first large-deductible fire policy for Bowman Dairy Co. Both concepts were considered radical ideas in that era, and Gallagher was at the forefront.
In the early 1940s, the U.S. entered World War II. All three of Art Gallagher’s sons–John, James and Robert–enlisted in the Navy. At the war’s end, his sons all joined the company, setting the stage for the next generation of leaders.
In 1950, Art decided to incorporate the company, giving each of his sons an equity interest. In 1957, Gallagher landed its largest client to date–Chicago’s Beatrice Foods Company. This accomplishment cast Gallagher in the limelight, as it beat out Beatrice’s incumbent insurance broker, then the largest broker in the United States.
In 1962, asked by Beatrice to help the client self-insure, Gallagher partnered with Sterling Bassett to form a new claims management subsidiary to provide services to self-insured clients. This changed the landscape of commercial insurance. In 1963, Robert E. Gallagher was named President and CEO of Gallagher, positions he held into the 1990s. The ‘60s also brought Gallagher’s earliest forays into the life insurance and benefits business.
The ‘70s was a period of rapid growth. Gallagher established an international presence in 1974 when it co-founded Lloyd’s broker Gallagher, Hinton & Vereker Ltd. in London. Gallagher later purchased the remaining interest. In 1975, Gallagher also formed an office in Bermuda to provide access to many offshore alternative markets. In that same year, Gallagher’s employee benefits division wrote Gallagher’s first self-funded employee benefits plan. By 1976, Gallagher’s revenues had topped $10 million, and by 1978, they had more than doubled to $25 million.
In 1981, Gallagher, Hinton & Vereker became the first subsidiary of a U.S. broker to be accepted as a Lloyd’s broker in its own right.
In 1984, Gallagher went public with an initial common stock offering, and in 1987, Gallagher was invited to join the prestigious New York Stock Exchange. Traded under the symbol “AJG,” industry publications often highlighted Gallagher as one of the fastest-growing brokers.
Gallagher also finalized a major step in the evolution of Gallagher Bassett during this decade. In 1988, to enable GB to grow and prosper, the decision was made to “un-bundle” and market GB’s services to non-Gallagher brokers, allowing them to be purchased on a “stand-alone” basis.
In 1990, CEO Bob Gallagher was named Chairman of the Board, and his brother, John, was named Vice Chairman. John’s son, J. Patrick Gallagher, Jr., became President in 1990 and Chief Executive Officer in 1995. In 1997, Gallagher formed a domestic wholesale brokerage division to market wholesale services to retail insurance agents and brokers, including Gallagher’s. Gallagher also established a joint venture in Australia. By 1999, based on 1998 revenues of more than $500 million, Gallagher was recognized by Business Insurance magazine as the world’s fourth-largest broker.
In 2002, Gallagher celebrated its 75th anniversary and hit the $1 billion in revenues mark. It was also recognized by Fortune magazine among the Fortune 1000 Largest Companies. Gallagher was named to Forbes magazine’s Platinum 400 List of Best Big Companies in America for 2004 and 2005. In 2006, J. Patrick Gallagher, Jr. was appointed Chairman of the Board.
Gallagher completed 142 acquisitions from 2010 through 2013 including the four largest acquisitions in the company’s history: GAB Robins North America, Heath Lambert in London; Bollinger, Inc.; and the Giles group of companies. By year-end 2013, 23% of Gallagher’s revenues were generated outside the United States. And in 2012, 2013 and 2014, Gallagher was recognized by the Ethisphere Institute as one of the World’s Most Ethical Companies.