AJG 10-K & 10-Q changes, risk factors and insider trading

•Global economic and geopolitical events, such as fluctuations in interest and inflation rates; geo-economic fragmentation and protectionism; a recession or economic downturn; a potential U.S. government shutdown or gridlock over increasing the debt ceiling and political violence,violence; and instability, including as a result of armed conflicts in Ukraine andUkraine, the Middle East, Latin America and the Caribbean could adversely affect our results of operations and financial condition.

•Economic conditions that result in financial difficulties for underwriting enterprises or lead to reduced risk-taking capital capacity could adversely affect our results of operations and financial condition.

•We have historically acquired large numbers of insurance brokers, benefit consulting firms and, to a lesser extent, third party claims administration and risk management firms. We may not be able to continue such an acquisition strategy in the future and there are risks associated with such acquisitions, which could adversely affect our growth and results of operations.

•Damage to our reputation and culture could have a material adverse effect on our business.

•Our sustainability aspirations, goals and initiatives, and our public statements and disclosures regarding them, expose us to numerous risks.

•If we are unable to apply technology, data analytics and AI effectively in driving value for our clients through technology-based solutions or gain internal efficiencies and effective internal controls through the application of technology and related tools, our operating results, client relationships, organic and inorganic growth and compliance programs could be adversely affected.

•We are subject to risks associated with AI.

•Our success depends, in part, on our ability to attract and retain qualified talent, including our senior management team.

•Business disruptions could have a material adverse effect on our operations, damage our reputation and impact client relationships.

•Sustained increases in compensation expense and the cost of employee benefits could reduce our profitability.

•Our substantial operations outside the U.S. expose us to risks different than those we face in the U.S.

•Changes in tax laws could adversely affect us.

•We face significant competitive pressures in each of our businesses.

•Volatility or declines in premiums or other adverse trends in the insurance industry may seriously undermine our profitability.

•Contingent and supplemental revenues we receive from underwriting enterprises are less predictable than standard commission revenues, and any decrease in the amount of these forms of revenue could adversely affect our results of operations.

•We face a variety of risks in our benefit consulting operations distinct from those we face in our insurance brokerage operations.

•We face a variety of risks in our third-party claims administration operations that are distinct from those we face in our brokerage and benefit consulting operations.

•Improper disclosure of confidential, personal or proprietary information and cybersecurity attacks or other security breach of our information systems, or those of third-party vendors we rely on, could result in regulatory scrutiny, legal liability or reputational harm, and could adversely affect our business, financial condition and reputation.

•We are subject to a number of contingencies and legal proceedings which, if determined unfavorably to us, would adversely affect our financial results.

•Changes in data privacy and protection laws and regulations, or any failure to comply with such laws and regulations, could adversely affect our business and financial results.

•We could be adversely affected by violations or alleged violations of laws that impose requirements for the conduct of our overseas operations, including the FCPA, the U.K. Bribery Act or other anti-corruption laws, sanctions laws, and FATCA.

•We are subject to regulation worldwide. If we fail to comply with regulatory requirements or if regulations change in a way that adversely affects our operations, we may not be able to conduct our business, or we may be less profitable.

•Changes in our accounting estimates and assumptions could negatively affect our financial position and operating results.

•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.

•Our clean energy investments are subject to various risks and uncertainties.

•The IRC Section 45 operations in which we have invested and the by-products from such operations may result in environmental and product liability claims and environmental compliance costs.

•We have debt outstanding that could adversely affect our financial flexibility and subjects us to restrictions and limitations that could significantly impact our ability to operate our business.

•Credit rating downgrades would increase our financing costs and could subject us to operational risk.

•We are a holding company and, therefore, may not be able to receive dividends or other distributions in needed amounts from our subsidiaries.

•Future sales or other dilution of our equity could adversely affect the market price of our common stock.

Global economic and geopolitical events, including fluctuations in interest, inflation and exchange rates, geo-economic fragmentation and protectionism resulting in greater restrictions on international trade and market uncertainty, tariffs, trade wars and other governmental actions affecting the flow of goods, services or currency, themilitary armed conflicts in Ukraineactions and war, including between Russia and Ukraine, the Middle East, Latin America and the Caribbean, political crises like potential U.S. governmental shutdowns or gridlock over increasing the U.S. debt ceiling,shutdowns, and political violence and instability worldwide could also weigh negatively on the economy.

We have a significant amount of receivables from certain of the underwriting enterprises with which we place insurance and reinsurance. If those companies experience liquidity problems or other financial difficulties, we could encounter delays or defaults in payments owed to us, which could have a significant adverse impact on our consolidated financial condition and results of operations. The failure of an underwriting enterprise with which we place business could result in E&O claims against us by our clients. Further, the failure of E&O underwriting enterprises could make the E&O insurance we rely upon cost prohibitive or unavailable. Underwriting enterprises are also clients of our reinsurance and third-party claims administration operations and, as such, any of the negative developments for underwriting enterprises referred to above could also reduce our commission and fee revenues from such clients. Any of these developments could adversely affect our results of operations and financial condition. In addition, if underwriting enterprises merge, fail, or withdraw from offering certain lines of coverage, for example, because of large payouts related to natural or man-made disasters, climate or weather eventsevents, or other emerging risk areas, overall risk-taking capital capacity could be negatively affected, which could reduce our ability to place certain lines of coverage, reduce demand from the insurance company clients of our reinsurance and third-party claims administration operations and, as a result, reduce our revenues and profitability.

Our ordinary-course acquisition program has been an important part of our historical growth, particularly in our brokerage segment, and we believe that similar acquisition activity will be important to maintaining comparable growth in the future. Failure to successfully identify and complete acquisitions would likely result in slower growth. Continuing consolidation in our industry and a high level of interest in acquiring insurance brokers on the part of private equity firms, private equity-backed consolidators and newly public insurance brokers has, in some cases, made, and could in the future make, appropriate acquisition targets more difficult to identify and more expensive. Even if we are able to identify appropriate acquisition targets, we may not have sufficient capital to fund acquisitions, be able to execute transactions on favorable terms or integrate targets in a manner that allows us to realize the benefits we have historically experienced from acquisitions. When regulatory approval of acquisitions is required, our ability to complete acquisitions may be limited by an ongoing regulatory review or other issues with the relevant regulator. Our ability to finance and integrate acquisitions may also decrease if we complete a greater number of larger acquisitions than we have historically. See the risk factorparagraph below regarding larger acquisitions. See also Note 3 to our 20242025 consolidated financial statements for information regarding the size of transactions in the reporting period.

Post-acquisition risks apply both to our normal-course and larger acquisitions described in the risk factor below and include poor cultural fit and risks relating to retention of personnel, retention of clients, entry into unfamiliar or complex markets or lines of business, contingencies or liabilities not covered by or in excess of escrowed or indemnified amounts (such as those arising from unlawful sales practices and violations of sanctions laws or anti-corruption laws including the FCPA and U.K. Bribery Act), risks relating to ensuring compliance with licensing and regulatory requirements, tax and accounting issues, the risk that an acquisition distracts management and personnel from our existing business, and integration difficulties relating to accounting, information technology (which we refer to as IT), pay equity, or human resources, some or all of which could have an adverse effect on our results of operations and growth. The failure of acquisition targets to achieve anticipated revenue and earnings levels could result in goodwill impairment charges. Additionally, through our acquisitions, we may enter new lines of business or offer new services within existing lines of business. For example, our acquisitionacquisitions of RedingtonWoodruff Sawyer and MyCaytons Plan ManagerLaw added U.K.‑regulated investmentlegal consulting services and Australia-regulated disability plan management servicesrelated to ourdirectors' operations.and officers’ liability insurance and a U.K.-based claims and legal solutions firm. These new businesses may pose additional risks or increased regulatory burden.

We can provide no assurance that we will be able to successfully integrate the operations of acquisitions that are larger than our usual tuck-in acquisitions, such as AssuredPartners, Buck, Eastern Insurance, Cadence Insurance and My Plan Manager, that they will perform as expected, or that we will not incur unforeseen obligations or liabilities. Integration efforts relating to larger acquisitions (including, for example, AssuredPartners, the largest acquisition in our history) are more complex, including with respect to technology systems, which may divert management’s attention and resources and could adversely affect our operating results. In addition, we have made certain assumptions relating to these acquisitions that may be inaccurate, including as a result of the failure to realize expected benefits, higher than expected integration costs and unknown liabilities as well as general economic and business conditions. These assumptions relate to various matters, including projections of future revenues, non-GAAP measures, expenses and expense allocation; our ability to maintain, develop and deepen relationships with employees, including key brokers, and clients; the amount of goodwill and intangibles; our ability to realize anticipated cost savings and revenue synergies; and other unforeseen compliance, financial and strategic risks. See also “We may encounter integration challenges and AssuredPartners may not perform as expected.”

TheWe increasedcould focusbecome the target of litigation, investigations or public criticism alleging that our sustainability efforts are anti-competitive, discriminatory or otherwise unlawful. For example, the State of Texas recently issued an opinion on sustainabilitythe haslegality madeof compliancecorporate withdiversity, regulations, frameworksequity and stakeholderinclusion expectations(DEI) increasinglyprograms complex. Our business faces increased scrutiny fromtaking the investmentposition community,that clients,such employees,programs potentialare acquisitionpotentially targets,unlawful regulatorsunder andcertain circumstances. On the other stakeholders related to sustainability. This includes scrutiny regarding our goal to reach operational net zero carbon emissions (Scope 1 and Scope 2) by 2050 and our interim goal of a 50% reduction in such emissions, on a per employee basis, by 2030. We anticipate the same level of scrutiny with respect to any other goals, targets and objectives we may announce in the future, and our methodologies and timelines for pursuing them. We may also face scrutiny, including private litigation or government enforcement actions, relating to our long-standing inclusion and diversity initiatives. Heightened scrutiny, including a growing backlash against sustainability initiatives, has increased the risk that we could be perceived as, or accused of, making inaccurate or misleading statements, commonly referred to as “greenwashing” and “greenhushing,” and could harm our reputation. Similarly,hand, our failure or perceived failure to pursue or fulfill our sustainability-related goals, targets and objectives, to comply with ethical, socialsocial, environmental or other standards, regulations or expectations, which are continuously evolving, or to satisfy various sustainability reporting standardsstandards, withwhich respectvary towidely theseacross matters,different jurisdictions, could havealso make us the sametarget negativeof impacts,litigation, asinvestigations wellor aspublic expose us to government enforcement actions and private litigation.criticism. Any resulting erosion of trust and confidence or the perception among some stakeholders that we are overly focused on sustainability 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 from sustainability-focused or anti-ESG investment funds; increase our cost of borrowing; or harm our relationships with regulators and the communities in which we operate. See also “We are subject to regulation worldwide. If we fail to comply with regulatory requirements or if regulations change in a way that adversely affects our operations, we may not be able to conduct our business, or we may be less profitable.”

In our corporate segment, net after-tax (loss) earnings from our clean energy investments was $(4.4) million and $(11.55) million in 2024both 2025 and 2023, respectively.2024. At this time, we anticipate our clean energy investments will produce after-tax losses in 2025.2026.

* For the year ended December 31, 2024,2025, the pretax impact of the brokerage segment adjustments totals $1,021.4$1,482 million, mostly due to non-cash period expenses related to intangible amortization and acquisition earnout payable adjustments,amortization, with a corresponding adjustment to the provision for income taxes of $259.2$375 million relating to these items. For the year ended December 31, 2024,2025, the pretax impact of the risk management segment adjustments totals $25.0$45 million, with a corresponding adjustment to the provision for income taxes of $7.0$11 million relating to these items. For the year ended December 31, 2024,2025, the pretax impact of the corporate segment adjustments totals $29.9$200 million, with a corresponding adjustment to the benefit for income taxes of $1.8$51 million relating to these items and other tax items noted on page 56. For the corporate segment, the clean energy related adjustments are described on page 56.

Acquisition of AssuredPartners and Woodruff Sawyer

On DecemberAugust 7,18, 2024,2025, we signed a definitive agreement to acquireacquired all of the issued and outstanding stock of Dolphin Topco,TopCo, Inc., the holding company of AssuredPartners, Inc., a Delaware corporation (which we refer to, together with its subsidiaries, as “AssuredPartners”) for gross consideration of $13.45$13.8 billion. The transaction is subject to customary regulatory approval, standard closing conditions and is expected to close during first quarter 2025. AssuredPartners is a leading U.S. insurance broker with client capabilities across commercial property/casualty, specialty, employee benefits and personal lines with operations in the U.K. and Ireland. We expect to fund the transaction usingraised $8.5 billion of cash raised in our December 11, 2024 follow-on common stock offering and borrowed $5.0 billion of cash borrowed in our December 19, 2024 senior notes issuance (which we refer to, together with the follow-on common stock offering, as the AssuredPartners Financing). to fund the transaction. On January 7, 2025, we received an additional $1.28$1.3 billion of cash due to the exercise by the underwriters of the overallotment provision related to the follow-on common stock offering. AssuredPartners had over 10,900 employees serving through offices located across the U.S., U.K. and Ireland.

We use the Council of Insurance Agents & Brokers (which we refer to as the CIAB) insurance pricing quarterly survey as an indicator of the insurance rate environment. The CIAB represents the leading domestic and international insurance brokers, who write approximately 85% of the commercial property/casualty premiums in the U.S. The fourth quarter 20242025 survey had not been published as of the filing date of this report. The first three 20242025 quarterly surveys indicated that U.S. commercial property/casualty rates increased by 7.7%,4.2%, 5.2%,3.7%, and 5.1%1.6% on average, for the first, second and third quarters of 2024,2025, respectively.respectively, We expect a similar trend to be noted when the CIAB fourth quarter 2024 survey report is issued, which would indicateindicating overall continued price firming and hardening in most lines of business.firming.

In the discussion and analysis of our results of operations that follows, in addition to reporting financial results in accordance with GAAP, we provide information regarding EBITDAC, EBITDAC margin, adjusted EBITDAC, adjusted EBITDAC margin, diluted net earnings per share, as adjusted (adjusted EPS), adjusted revenue, adjusted compensation and operating expenses, adjusted compensation expense ratio, adjusted operating expense ratio and organic revenue. These measures are not in accordance with, or an alternative to, the GAAP information provided in this report. We believe that these presentations provide useful information to management, analysts and investors regarding financial and business trends relating to our results of operations and financial condition or because they provide investors with measures that our chief operating decision maker uses when reviewing the Company’s performance. See further below for definitions and additional reasons each of these measures is useful to investors. Our industry peers may provide similar supplemental non-GAAP information with respect to one or more of these measures, although they may not use the same or comparable terminology and may not make identical adjustments. For example, our organic revenue is calculated differently than some of our industry peers. The non-GAAP information we provide should be used in addition to, but not as a substitute for, the GAAP information provided. WeAs disclosed in our most recent Proxy Statement, we make determinations regarding certain elements of executive officer incentive compensation, performance share awards and annual cash incentive awards, partly on the basis of measures related to adjusted EBITDAC.

•Adjusted measures - We define these measures as revenuesRevenues (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 primarily net proceeds received related to sales of books of business and other divestiture transactions, such as the disposal of a business through sale or closure.

◦Acquisition integration costs, which include costs related to certain large acquisitions (including the acquisitions of the Willis Towers Watson plc treaty reinsurance brokerage operations (which we refer to as Willis Re), Buck, Cadence Insurance, Eastern Insurance andInsurance, My Plan ManagerManager, Woodruff Sawyer and AssuredPartners), outside the scope of our usual tuck-in strategy, not expected to occur on an ongoing basis in the future once we fully assimilate the applicable acquisition. These costs are typically associated with redundant workforce, compensation expense related to amortization of certain retention bonus arrangements, extra lease space, duplicate services and external costs incurred to assimilate the acquisition into our IT related systems.

◦Transaction-related costs, which are associated with completed, future and terminated acquisitions. Costs primarily relate to the acquisitions of Willis Re, Buck, Cadence Insurance, Eastern InsuranceInsurance, all of which closed in 2023, as well as Woodruff Sawyer and MyAssuredPartners, Planwhich Managerclosed in April 2025 and theAugust pending2025, acquisition of AssuredPartners.respectively. These include costs related to regulatory filings, legal and accounting services, insurance and incentive compensation.

◦Workforce related charges, which primarily include severance costs (either accrued or paid) related to employee terminations and other costs associated with redundant workforce.

◦Lease termination related charges, which primarily include costs related to terminations of real estate leases and abandonment of leased space.

◦Acquisition related adjustments principally relate to changes in estimated acquisition earnout payables adjustments and acquisition related compensation charges. In addition, from time to time may include changes in balance sheet estimates arising from conforming accounting principles, purchase-related true-ups and other balance sheet adjustments made after the closing date; the net impact on the results for first quarter 2024 was approximately $26 million of revenues and approximately $28 million of compensation expense.

◦Amortization of intangible assets which reflects the amortization of customer/expiration lists, non-compete agreements, trade names and other intangible assets acquired through our merger and acquisition strategy, the impact to amortization expense of acquisition valuation adjustments to these assets as well as non-cash impairment charges.

◦The impact of foreign currency translation, as applicable. The amounts excluded with respect to foreign currency translation are calculated by applying current year foreign exchange rates to the same period in the prior year.

◦Effective income tax rate impact, which levelizes the prior year for the change in current year tax rates.

•Adjusted ratios - Adjusted compensation expense and adjusted operating expense, respectively, each divided by adjusted revenues.

•EBITDAC and EBITDAC Margin - EBITDAC is net earnings before interest, income taxes, depreciation, amortization and the change in estimated acquisition earnout payables and EBITDAC margin is EBITDAC divided by total revenues (for the brokerage segment) and revenues before reimbursements (for the risk management segment). These measures for the brokerage and risk management segments provide a meaningful representation of our operating performance for the overall business and provide a meaningful way to measure our financial performance on an ongoing basis.

•EBITDAC, as Adjusted and EBITDAC andMargin, as Adjusted EBITDAC Margin - Adjusted EBITDAC is EBITDAC adjusted to exclude net gains on divestitures, acquisition integration costs, workforce related charges, lease termination related charges, acquisition related adjustments, transaction related costs, legal and tax related costs, and the period-over-period impact of foreign currency translation, as applicable and Adjusted EBITDAC margin is Adjusted EBITDAC divided by total adjusted revenues (defined above). These measures for the brokerage and risk management segments provide a meaningful representation of our operating performance, and are also presented to improve the comparability of our results between periods by eliminating the impact of the items that have a high degree of variability.

•EPS, as Adjusted EPS and Adjusted Net EarningsEarnings, as Adjusted - Adjusted net earnings have been adjusted to exclude the after-tax impact of net gains on divestitures, acquisition integration costs, the impact of foreign currency translation, workforce related charges, lease termination related charges, acquisition related adjustments, transaction related costs, amortization of intangible assets, legal and tax related costs and effective income tax rate impact, as applicable. Adjusted EPS is Adjusted Net Earnings divided by diluted weighted average shares outstanding. This measure provides a meaningful representation of our operating performance (and as such should not be used as a measure of our liquidity), and for the overall business is also presented to improve the comparability of our results between periods by eliminating the impact of the items that have a high degree of variability.

Organic Revenues (a non-GAAP measure) - Organic revenue change measures the year-over-year percentage change in organic revenue. For the brokerage segment, organic changerevenue inconsists of base commission and fee revenues, supplemental revenues and contingent revenues excludes the first twelve months of such revenues generated from acquisitions and such revenues related to divested operations which include disposals of a business through sale or closure, estimate changes, run-off of a business and the restructuring and/or repricing of programs and products in each year presented. TheseSuch revenues are excluded from organic revenues in order to help interested persons analyze the revenue growth associated with the operations that were a part of our business in both the current and prior year. In addition, organic change in base commission and fee revenues, supplemental revenues and contingent revenues exclude the period-over-period impact of foreign currency translationorder to improve the comparability of our results between periods.periods, we further exclude the period-over-period impact of foreign currency translation; revenue from certain large life product sales within Gallagher’s Executive Life and Benefits practice group (which are typically large, singular transactions with a high degree of variability in amount and timing); and revenue attributable to changes in assumptions used to calculate estimated deferred revenues, which impact the quarterly timing of revenues during the annual contract period. For the risk management segment, organic changerevenues inconsists of fee revenues excludes the first twelve months of such revenues generated from acquisitions and such revenues related to divested operations in each year presented. In addition, change in organic growth in fee revenues excludes the period-over-period impact of foreign currency translationorder to improve the comparability of our results between periods.periods, we further exclude the period-over-period impact of foreign currency translation These revenue items are excluded from organic revenues in order to determine a comparable, but non-GAAP, measurement of revenue growth that is associated with the revenue sources that are expected to continue in the current year and beyond as well as eliminating the impact of the items that have a high degree of variability. We have historically viewed organic revenue growth as an important indicator when assessing and evaluating the performance of our brokerage and risk management segments. We also believe that using this non-GAAP measure allows readers of our financial statements to measure, analyze and compare the growth from our brokerage and risk management segments in a meaningful and consistent manner.

•Identifying, negotiating and placing all forms of insurance (or insurance-like) coverage, as well as providing data analytics, risk-shifting, risk-sharing and risk-mitigation consulting services, principally related to property/casualty, life, health, welfare and disability insurance. We also provide these services through, or in conjunction with, other unrelated agents and brokers, consultants and management advisors;

•Identifying, negotiating and placing all forms of reinsurance coverage, as well as providing capital markets services, including acting as underwriter, with respect to insurance linked securities, weather derivatives, capital raising and selected merger and acquisition advisory activities;

•Acting as an agent or broker for multiple underwriting enterprises by providing services such as sales, marketing, selecting, negotiating, underwriting, servicing and placing insurance coverage on their behalf;

•Providing consulting services related to health and welfare benefits, voluntary benefits, executive benefits, compensation, retirement planning, institutional investment and fiduciary, actuarial, compliance, private insurance exchange, human resources technology, communications and benefits administration; and (v) Providing management and administrative services to captives, pools, risk-retention groups, healthcare exchanges, small underwriting enterprises, such as accounting, claims and loss processing assistance, feasibility studies, actuarial studies, data analytics and other administrative services.

*2025 and 2024 adjusted EBITDAC margin would be 35.0% excludingincludes approximately $20.0$363 million and $20 million, respectively, of interest income revenues earned on the proceeds received in December 2024 related to the AssuredPartners Financing.

Commissions and fees - The aggregate increase in base commissions and fees for 20242025 was due to revenues associated with acquisitionsacquisitions, divested operations and other that were made during 20242025 and 20232024 ($618.2$1,598 million) and organic revenue growth. Commission revenues increased 14%20% and fee revenues increased 16%21% in 20242025 compared to 2023.2024. The organic change in base commission and fee revenues was 6% in 2025 and 7% in 2024 and 9% in 2023.2024.

In our property/casualty brokerage operations, during the twelve-month period ended December 31, 2024,2025, we saw continued strong customer retention,retention higherand, new business generationgeneration, andin increasingaddition to continued renewal premiums increases (premium rates and exposures). We believe these favorable trends should continue in 20252026; however, if economic conditions worsen or renewal premium rate increases slow, we could see our revenue growth moderate.be lower than growth in 2025.

On December 19, 2024, we closed and funded an offering of $5,000.0$5,000 million of unsecured senior notes in five tranches. The $750.0$750 million aggregate principal amount of 4.60% Senior Notes is due in 2027, $750.0$750 million aggregate principal amount of 4.85% Senior Notes is due in 2029, $500.0$500 million aggregate principal amount of 5.00% Senior Notes is due in 2032, $1,500.0$1,500 million aggregate principal amount of 5.15% Senior Notes is due in 2035, $1,500.0$1,500 million aggregate principal amount 5.55% Senior Notes is due in 2055. The weighted average interest rate is 5.25% per annum after giving effect to underwriting costs and a net hedge gain. During 2024, we entered into a pre-issuance interest rate hedging transaction related to these notes. We realized a net cash gain of approximately $4.1$4 million on the hedging transactions that will be recognized on a pro rata basis as a decrease to our reported interest expense over ten years. We expect to useused the net proceeds of this offering to fund a portion of the cash consideration payable in connection with the AssuredPartners transaction and, to the extent that any proceeds remain thereafter, or if the AssuredPartners transaction is not completed,and for general corporate purposes, including other acquisitions.

Interest income, premium finance revenues and other income in 20242025 increased compared to 20232024 primarily due to increases in interest income earned on our own and fiduciary funds, including the $20.0$363 million interest income earned in December 20242025 related to the proceeds from the AssuredPartners Financing.

The $732.3$1,158 million increase in compensation expense in 20242025 compared to 20232024 was primarily due to compensation associated with the acquisitions completed in the twelve monthtwelve-month period ended December 31, 20242025 - $350.8$875 million, increases in base compensation related to the hiring of producers and other roles to service and support organic growth and higheremployee benefit costscosts, partially offset by decreased incentive compensation - $291.7$165 million in the aggregate, increasesworkforce inand lease termination related charges - $63 million, acquisition integration costs ‑ $28 million, and acquisition earnout related adjustments - $77.9 million and workforce related charges - $52.1 million, partially offset by reduced acquisition integration costs ‑ $40.2$27 million.

The $91.1$313 million increase in operating expense in 20242025 compared to 2023,2024, was primarily due to expenses associated with the acquisitions completed in the twelve-month period ended December 31, 20242025 - $78.9$233 million, underlying inflation of travel and entertainment costs and additional investments in technology - $22.1 million, increases in workforce related charges - $3.4 million,technology, partially offset by reducedlesser real estate costs - $39 million in the aggregate, acquisition integration costs - $13.3$38 million, and workforce and lease termination related charges - $3 million.

Amortization - The increase in amortization in 20242025 compared to 20232024 was primarily due to the impact of amortization expense of intangible assets associated with acquisitions completed in 20242025 and 2023,2024, partially offset by the impact of acquisition valuation true-ups recorded in 20242025 relating to acquisitions made in 2023.2025 and 2024. Expiration lists, non‑compete agreements and trade names are amortized using the straight-line method over their estimated useful lives (two to fifteen years for expiration lists, two to six years for non-compete agreements and two to fifteen years for trade names). Based on the results of impairment reviews performed on amortizable intangible assets in 20242025 and 2023,2024, we wrote off $19.4$66 million and $3.5$19 million, respectively, of amortizable intangible assets related to the brokerage segment. We review all of our intangible assets for impairment periodically (at least annually for goodwill) and whenever events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. We perform such impairment reviews at the division (i.e., reporting unit) level with respect to goodwill and at the business unit level for amortizable intangible assets. In reviewing intangible assets, if the undiscounted future cash flows were less than the carrying amount of the respective (or underlying) asset, an indicator of impairment would exist and further analysis would be required to determine whether or not a loss would need to be charged against current period earnings as a component of amortization expense. In October 2024,2025, we performed a qualitative impairment review on carrying value of our goodwill for all of our reporting units and no indicators of impairment were noted as of December 31, 2024.2025.

Change in estimated acquisition earnout payables - The change in the expense from the change in estimated acquisition earnout payables in 20242025 compared to 20232024 was due primarily to adjustments made to the estimated fair value of earnout obligations related to revised assumptions due to rising interest rates and increased market volatility and projections of future performance. During 20242025 and 2023,2024, we recognized $61.3$48 million and $76.1$61 million, respectively, of expense related to the accretion of the discount recorded for earnout obligations in connection with our acquisitions made from 20212022 to 2024.2025. During 20242025 and 2023,2024, we recognized $35.7$4 million and $36 million of income and $300.7 million of expense,income, respectively, related to net adjustments in the estimated fair market values of earnout obligations in connection with revised projections of future performance for 91126 and 8091 acquisitions, respectively. The net adjustments in 2024 include changes made to the estimated fair value of the Willis Re acquisition earnout and reflect updated assumptions as of December 31, 2024 and are based on actual 2024 recognized revenues. The net adjustments in 2023, primarily included changes made to the estimated fair value of the Willis Re acquisition earnout and reflected updated assumptions as of December 31, 2023, including forecasted 2024 revenue projections based on January 1, 2024 reinsurance renewals.

Provision for income taxes - The brokerage segment’s effective tax rate in 20242025 and 20232024 was 25.4%25.6% and 25.6%,25.4%, respectively. As of April 1, 2023, a U.K. corporate tax rate of 25% went into effect making the 2023 full year effective rate in the U.K. 23.5%. We anticipate reporting an effective tax rate of approximately 24.5% to 26.5% in our brokerage segment based on known changes in tax rates in future periods.

Fees - In 2024, our risk management operations,2025, new corebusiness workers’production compensationwas andstrong, generalwhile liabilityclient claimsretention arisingremained improvedexcellent fromrelative newto clients coming on board in 2024 and 2023.2024. We believe these favorable net new business trends should continue for 2025,2026, however, worsening economic conditions or a reversal in the number of workers employed, could cause fewer new liability and core workers’ compensation claims to arise in future quarters. Organic change in fee revenues was 6% in 2025 and 8% in 2024 and 16% in 2023.2024.

Reimbursements - Reimbursements represent amounts received from clients reimbursing us for certain third-party costs associated with providing our claims management services. In certain service partner relationships, we are considered a principal because we direct the third party, control the specified service and combine the services provided into an integrated solution. Given this principal relationship, we are required to recognize revenue on a gross basis and service partner vendor fees in the operating expense line in our consolidated statement of earnings. The increase in reimbursements in 2024 compared to 2023 was primarily due to a change in business mix that is processed internally versus using outside service partners.

Interest income and other income - Interest income and other income primarily represents interest income earned on cash, cash equivalents and fiduciary cash. Interest income and other income in 20242025 increasedremained relatively flat compared to 20232024 primarily due to increases in interest income from increases in interest rates earned on fiduciary cash and increased levels of fiduciary cash.

The $105.6$92 million increase in compensation expense in 20242025 compared to 20232024 was primarily due to increases in base and incentive compensation to service and support organic growth andas higherwell as employee benefit costs - $73.2$43 million in the aggregate, compensation associated with the acquisitions completed in the twelve monthtwelve-month period ended December 31, 20242025 - $29.6$39 million, increasesworkforce inand workforcelease termination related charges - $2.4$5 millionmillion, acquisition earnout related adjustments - $4 million, and acquisition integration related costs - $0.6 million, partially offset by reduced acquisition earnout related adjustments - $0.2$1 million.

The $21.3$19 million increase in operating expense in 20242025 compared to 20232024 was primarily due to expenses associated with the acquisitions completed in the twelve monthtwelve-month period ended December 31, 2024 - $10.3$9 million, acquisition integration costs - $5 million, additional investments in technologytechnology, andpartially businessoffset insuranceby lesser client-related expenses - $8.3$5 million, increasesmillion in workforcethe related charges - $1.4 million and acquisition integration costs - $1.3 million.aggregate.

Amortization - Amortization expense increased in 20242025 compared to 2023.2024. The increase in amortization in 20242025 compared to 20232024 was primarily due to the impact of amortization expense of intangible assets associated with the acquisitions completed in 20242025 and the later part of 2023 (My Plan Manager was completed in December 2023).2024. Based on the results of impairment reviews performed on amortizable intangible assets during 20242025 and 2023,2024, there were no impairments of amortizable assets related to the risk management segment.

Change in estimated acquisition earnout payables - The change in estimated acquisition earnout payables in 20242025 and 2023,2024, primarily relates to accretion of discount in 20242025 and 20232024 relates to the estimated fair value of the earnout obligations. During 20242025 and 2023,2024, we recognized $0.4$2 million and $0.5 million,zero, respectively, of expense related to the accretion of the discount recorded for earnout obligations in connection with our 20212022 to 20242025 acquisitions, respectively. During 20242025 and 2023,2024, there were no net adjustments in the estimated fair value of earnout obligations related to projections of future performance for acquisitions.

Provision for income taxes - We allocate the provision for income taxes to the risk management segment using local statutory rates. As of April 1, 2023, a U.K. corporate tax rate of 25% went into effect, making the 2023 full year effective rate 23.5%. The risk management segment’s effective tax rate in 20242025 and 20232024 was 26.6%26.4% and 26.4%,26.6%, respectively. We anticipate reporting an effective tax rate on adjusted results of approximately 25%25.0% to 27%27.0% in our risk management segment based on known changes in tax rates in future periods.

The corporate segment reports the financial information related to our debt, external acquisition-related expenses, other corporate costs andcosts, the impact of foreign currency remeasurement.remeasurement and clean energy investments. See Note 7 to our 20242025 consolidated financial statements for a summary of our debt at December 31, 20242025 and 2023.2024.

The discussion and analysis that follows relates to our financial condition and results of operations for the three-monthsix-month period ended MarchJune 31,30, 2026. Readers should review this information in conjunction with the MarchJune 31,30, 2026 unaudited consolidated financial statements and notes included in Item 1 of Part I of this quarterly report on Form 10‑Q and the audited consolidated financial statements and notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in our annual report on Form 10-K for the year ended December 31, 2025.

For Information on fiscal firstsecond quarter 2025 results and similar comparisons, see “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-Q for the fiscal three-monthsix-month period ended MarchJune 31,30, 2025.

•Acquisition integration costs, which include costs related to certain large acquisitions (including the acquisitions of Willis Towers Watson plc treaty reinsurance brokerage operations (which we refer to as Willis Re),operations, Buck, Cadence Insurance, Inc. (which we refer to as Cadence Insurance),Inc., Eastern Insurance Group, LLC (which we refer to as Eastern Insurance),LLC, My Plan Manager Group Pty LtdLtd, (whichWoodruff we refer to as My Plan Manager), Woodruff-SawyerSawyer and AssuredPartners,AssuredPartners), outside the scope of our usual tuck‑in strategy, are not expected to occur on an ongoing basis in the future once we fully assimilate the applicable acquisition. These costs are typically associated with redundant workforce, compensation expense related to amortization of certain retention bonus arrangements, extra lease space, duplicate services and external costs incurred to assimilate the acquisition into our IT related systems.

•Legal and tax related, which represents the impact of adjustments in firstsecond quarter 2026 and 2025 related to costs associated with legal and tax matters.

•Adjusted ratios - Adjusted compensation expense and adjusted operating expense, respectively, each divided by adjusted revenues.

•EBITDAC, as Adjusted and EBITDAC Margin, as adjusted - Adjusted EBITDAC is EBITDAC adjusted to exclude net gains on divestitures, acquisition integration costs, workforce related charges, lease termination related charges, acquisition related adjustments, transaction relatedtransaction-related costs, and the period-over-period impact of foreign currency translation as applicable, (and for the corporate segment, the clean energy related adjustments described above) and Adjusted EBITDAC margin is Adjusted EBITDAC divided by total adjusted revenues (defined above). These measures for the brokerage and risk management segments provide a meaningful representation of our operating performance, and are also presented to improve the comparability of our results between periods by eliminating the impact of the items that have a high degree of variability.

•EPS, as Adjusted and Net Earnings, as Adjusted - Adjusted net earnings have been adjusted to exclude the after-tax impact of net gains on divestitures, acquisition integration costs, the impact of foreign currency translation, workforce related charges, lease termination related charges, acquisition related adjustments, transaction relatedtransaction-related costs, amortization of intangible assets, and effective income tax rate impact, as applicable. Adjusted EPS is Adjusted Net Earnings divided by diluted weighted average shares outstanding. This measure provides a meaningful representation of our operating performance (and as such should not be used as a measure of our liquidity), and for the overall business is also presented to improve the comparability of our results between periods by eliminating the impact of the items that have a high degree of variability.

Reconciliation of Non-GAAP Information Presented to GAAP Measures - This quarterly report on Form 10‑Q includes tabular reconciliations to the most comparable GAAP measures, as follows: for EBITDAC (on pages 3441 and 4047) and adjusted EBITDAC margin, (on page 44) , for adjusted revenues, adjusted EBITDAC and adjusted diluted net earnings per share (on page 3135), for organic revenue measures (on pages 3542 and 4047), respectively, for the brokerage and risk management segments, for adjusted compensation and operating expenses and adjusted EBITDAC margin, (on page 37) for the brokerage segment and (on page 4148) for the risk management segment.

Overview and FirstSecond Quarter 2026 Highlights

We are engaged in providing insurance brokerage, reinsurance brokerage, consulting services, and third-party property/casualty claims settlement and administration services to entities and individuals around the world. In the three-monthsix-month period ended MarchJune 31,30, 2026, we generated approximately 70%69% of our revenues for the combined brokerage and risk management segments domestically and 30%31% internationally, primarily in Australia, Canada, New Zealand and the U.K. We have three reportable segments: brokerage, risk management and corporate. The brokerage and risk management segments contributed approximately 90%89% and 10%,11%, respectively, to revenues during the three-monthsix-month period ended MarchJune 31,30, 2026. The corporate segment did not generate any significant revenues in the three-monthsix-month period ended MarchJune 31,30, 2026. Our major sources of operating revenues are commissions, fees and supplemental and contingent revenues from brokerage operations and fees from risk management operations. Interest income is earned on cash, cash equivalents and fiduciary cash and revenues are generated from premium financing.

We use the Council of Insurance Agents and Brokers (which we refer to as CIAB) insurance pricing quarterly survey as an indicator of the insurance rate environment. The CIAB represents the leading domestic and international insurance brokers, who write approximately 85% of the commercial property/casualty premiums in the U.S. The firstsecond quarter 2026 survey had not been published as of the filing date of this report. The first quarter 2026 survey indicated that U.S. commercial property/commercial casualty rates decreased 1.2%. The 2025 quarterly surveys indicated that U.S. commercial property/casualty rates increased by 4.2%, 3.7%, 1.6%, and 0.2% on average for the first, second, third and fourth quarters of 2025.

Summary of Financial Results - Three-Month Periods Ended MarchJune 31,30, 2026 and 2025

The following provides information that management believes is helpful when comparing revenues before reimbursements, net earnings, EBITDAC and diluted net earnings per share for the three-monththree and six-month periods ended MarchJune 31,30, 2026 with the same periodperiods in 2025. In addition, these tables provide reconciliations to the most comparable GAAP measures for adjusted revenues, adjusted EBITDAC and adjusted diluted net earnings per share. Reconciliations of EBITDAC for the brokerage and risk management segments are provided on pages 3441 and 4047 , respectively, of this filing.

For the Three-Month Periods Ended MarchJune 3130 Reported GAAP to Adjusted Non-GAAP Reconciliation:

FirstFor second quarter 20252025, reported and adjusted amounts for the Brokerage Segment include approximately $143$144 million of incremental interest income, or approximately 4142 cents after-tax, earned on the cash proceeds heldassociated to fundwith the AssuredPartners acquisition.Financing in December 2024.

For the three-month period ended MarchJune 31,30, 2025,2026, the pretax impact of adjustments for the brokerage, risk management and corporate segments totals $310$505 million, $12 million and $23$33 million, respectively, and corresponding adjustment to the provision (benefit) for income taxes of $76$130 million, $3 million and $(3$7) million, respectively, relating to these adjustments. A detailed reconciliation of the 20252026 provision (benefit) for income taxes is shown on page 32.37.

AcquisitionAcquisitions in 2026

The brokerage segment accounted for 90%89% of our revenues during the three-monthsix-month period ended MarchJune 31,30, 2026. Our brokerage segment is primarily comprised of retail, wholesale and reinsurance brokerage operations. For further description of our segment operations and revenue sources, see the "Business" section in our Annual Report on Form 10-K for the year ended December 31, 2025.

Financial information relating to our brokerage segment results for the three-monththree periodand six-month periods ended MarchJune 31,30, 2026 compared to the same periodperiods in 2025, is as follows (in millions, except per share, percentages and workforce data).

The following provides information that management believes is helpful when comparing EBITDAC and adjusted EBITDAC for the three-monththree periodand six-month periods ended MarchJune 31,30, 2026 compared to the same periodperiods in 2025 (in millions):

*FirstSecond quarter 2025 adjusted EBITDAC margin includes approximately $143$144 million of interest income revenues earned on the cash proceeds receivedassociated with the AssuredPartners Financing in December 2024 related to the AssuredPartners Financing.2024. The interest income in the prior period, as well as the seasonality of AssuredPartners and the roll-in of tuck-in acquisitions, unfavorably impacted the year over year change in firstsecond quarter adjusted EBITDAC margin by approximately 3.6%.3.9%.

Commissions and fees - Base commissions and fees increased $1,046$793 million or 36%,33%, for the three-month period ended MarchJune 31,30, 2026, compared to the same period in 2025. This increase reflects the contribution of acquisitions that were made in the twelve-month period ended MarchJune 31,30, 2026 and 4% organic growth. Organic growth reflected strong customer retention and new business generation, in addition to continued renewal premiums increases (premium rates and exposures).

Items excluded from organic revenue computations yet impacting revenue comparisons for the three-monththree and six-month periods ended MarchJune 31,30, 2026 and 2025 include the following (in millions):

In the three-monththree and six-month periods ended MarchJune 31,30, 2026 no shares were issued and 76,000 shares, respectively, of our common stock at the request of sellers and/or in connection with tax-free exchange acquisitions. In the three and six-month periods ended June 30, 2025 weno shares were issued 76,000 shares and 49,000 shares, respectively, of our common stock at the request of sellers and/or in connection with tax-free exchange acquisitions.

Interest income, premium finance revenues and other income - Interest income, premium finance revenues and other income in the three-monththree periodand six-month periods ended MarchJune 31,30, 2026 decreased compared to the same periodperiods in 2025, primarily due to decreases in interest income earned on our own and fiduciary funds, including the $143$144 and $287 million respectively, of interest income earned in the three-monththree periodand six-month periods ended MarchJune 31,30, 2025 related to the cash proceeds fromassociated with the AssuredPartners Financing.Financing in December 2024.

Compensation expense - The following provides non-GAAP information that management believes is helpful when comparing compensation expense for the three-monththree periodand six-month periods ended MarchJune 31,30, 2026 with the same periodperiods in 2025 (in millions):

The $594$491 million increase in compensation expense for the three-month period ended MarchJune 31,30, 2026 compared to the same period in 2025, was primarily due to compensation associated with the acquisitions completed in the twelve-month period ended MarchJune 31,30, 2026 ‑ $491$406 million, increases in base compensation to service and support organic growth - $66$39 million, acquisition integration costs - $33 million, increased acquisition earnout related adjustments - $20 million, acquisitionpartially integrationoffset costsby - $9 million andlesser workforce and lease termination related charges - $8$7 million.

The $174$1,085 million increase in operatingcompensation expense for the three-monthsix-month period ended MarchJune 31,30, 2026 compared to the same period in 2025, was primarily due to expensescompensation associated with the acquisitions completed in the twelve-month period ended MarchJune 31,30, 2026 ‑ $115$897 million, increases in base compensation to service and support organic growth - $105 million, acquisition integration costs - $34$42 million, additionalincreased investmentsacquisition inearnout technologyrelated adjustments - $24$40 million,million and workforce and lease termination related charges - $1 million.

Depreciation - Depreciation expense increased in the three-monththree periodand six-month periods ended MarchJune 31,30, 2026 compared to the same periodperiods in 2025 by $16$7 million.million and $23 million, respectively. The increase in depreciation expense in 2026 compared to 2025 was due primarily to the purchases of furniture, equipment and leasehold improvements related to office consolidations and moves, and expenditures related to upgrading computer systems. Also contributing to the increase in depreciation expense was the depreciation expense associated with acquisitions completed in the twelve-month period ended MarchJune 31,30, 2026.

Amortization - The increase in amortization expense in the three-monththree periodand six-month periods ended MarchJune 31,30, 2026 compared to the same periodperiods in 2025 was primarily due to the impact of amortization expense of intangible assets associated with acquisitions completed in the twelve-month period ended MarchJune 31,30, 2026. Based on the results of impairment reviews during the three-monththree and six-month periods ended MarchJune 31,30, 20262026, we wrote off $21 million and $22 million, respectively, of amortizable assets. Based on the results of impairment reviews during the six-month periods ended June 30, 2025, we wrote off $1$41 million and $41 million, respectively, of amortizable assets. We review all of our intangible assets for impairment periodically (at least annually for goodwill) and whenever events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. We perform such impairment reviews at the division (i.e., reporting unit) level with respect to goodwill and at the business unit level for amortizable intangible assets. In reviewing intangible assets, if the undiscounted future cash flows were less than the carrying amount of the respective (or underlying) asset, an indicator of impairment would exist and further analysis would be required to determine whether or not a loss would need to be charged against current period earnings as a component of amortization expense. Expiration lists, non‑compete agreements and trade names are amortized using the straight-line method over their estimated useful lives (two to fifteen years for expiration lists, two to six years for non-compete agreements and two to fifteen years for trade names).

Change in estimated acquisition earnout payables - The change in the expense from the change in estimated acquisition earnout payables in the three-monththree periodand six-month periods ended MarchJune 31,30, 2026 compared to the same periodperiods in 2025, was primarily due to adjustments made to the estimated fair value of earnout obligations related to revised assumptions due to rising interest rates and increased market volatility and projections of future performance. During the three-month periods ended MarchJune 31,30, 2026 and 2025, we recognized $13$9 million and $12$11 million, respectively, of expense related to the accretion of the discount recorded for earnout obligations in connection with our acquisitions made in the period from 2021 to 2026. During the six-month periods ended June 30, 2026 and 2025, we recognized $22 million and $23 million, respectively, of expense related to the accretion of the discount recorded for earnout obligations in connection with our acquisitions made in the period from 2021 to 2026. In addition, during each of the three-month periods ended MarchJune 31,30, 2026 and 2025, we recognized $3$4 million and $17 million of expenseincome related to net adjustments in the estimated fair value of earnout obligations in connection with revised assumptions due to changes in interest rates, volatility and other assumptions and projections of future performance for 5147 and 2835 acquisitions, respectively. In addition, during the six-month periods ended June 30, 2026 and 2025, we recognized $1 million and $14 million of income related to net adjustments in the estimated fair value of earnout obligations in connection with revised assumptions due to changes in interest rates, volatility and other assumptions and projections of future performance for 77 and 55 acquisitions, respectively.

The amounts initially recorded as earnout payables for our 2021 to 2026 acquisitions were measured at fair value as of the acquisition date and are primarily based upon the estimated future operating results of the acquired entities over a two- to-three-yearto three-year period subsequent to the acquisition date. The fair value of these earnout obligations is based on the present value of the expected future payments to be made to the sellers of the acquired entities in accordance with the provisions outlined in the respective purchase agreements. In determining fair value, we estimate the acquired entity’s future performance using financial projections developed by management for the acquired entity and market participant assumptions that were derived for revenue growth and/or profitability. We estimate future earnout payments using the earnout formula and performance targets specified in each purchase agreement and these financial projections. Subsequent changes in the underlying financial projections or assumptions will cause the estimated earnout obligations to change and such adjustments are recorded in our consolidated statement of earnings when incurred. Increases in the earnout payable obligations will result in the recognition of expense and decreases in the earnout payable obligations will result in the recognition of income.

Provision for income taxes - The brokerage segment’s effective income tax rates for the three-month periods ended MarchJune 31,30, 2026 and 2025, were 25.6% and 25.7%, respectively. The brokerage segment’s effective income tax rates for the six-month periods ended June 30, 2026 and 2025, were 25.5% and 25.7%, respectively. We anticipate reporting an effective tax rate of approximately 24.5% to 26.5% in our brokerage segment based on known changes in tax rates in future periods.

Net earnings attributable to noncontrolling interests - The amounts reported in this line for each of the three-month periods ended MarchJune 31,30, 2026 and 2025, include noncontrolling interest earnings of zero. The amounts reported in this line for the six-month periods ended June 30, 2026 and 2025, include noncontrolling interest earnings of $1 million and $5 million, respectively.

The risk management segment accounted for 10%11% of our revenue during the three-monthsix-month period ended MarchJune 31,30, 2026. Our risk management segment operations provide contract claim settlement, claim administration, loss control services and risk management consulting. For further description of segment operations and revenue sources, see the "Business" section in our Annual Report on Form 10-K for the year ended December 31, 2025.

Financial information relating to our risk management segment results for the three-monththree periodand six-month periods ended MarchJune 31,30, 2026 compared to the same periodperiods in 2025, is as follows (in millions, except per share, percentages and workforce data):

The following provides non-GAAP information that management believes is helpful when comparing EBITDAC and adjusted EBITDAC for the three-monththree periodand six-month periods ended MarchJune 31,30, 2026 to the same periodperiods in 2025 (in millions):

Fees - In our risk management operations, during the three-monththree periodand six-month periods ended MarchJune 31,30, 2026, organic change in fee revenue was 10%,12% and 11%, respectively, reflecting continued strong new business production and client retention.

Items excluded from organic fee computations yet impacting revenue comparisons for the three-monththree and six-month periods ended MarchJune 31,30, 2026 and 2025 include the following (in millions):