Good afternoon, and Welcome to Arthur J. Gallagher & Co.'s third quarter 2025 earnings conference call. Participants have been placed in a listen-only mode. Your lines will be open for questions following the presentation. Today's call is being recorded. If you have any objections, you may disconnect at this time. Some of the comments made during this conference call, including answers given in response to questions, may constitute forward-looking statements within the meanings of the securities laws. The company does not assume any obligation to update information or forward-looking statements provided on this call. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the information concerning forward-looking statements and risk factor sections contained in the company's most recent 10-K, 10-Q, and 8-K filings for more details on such risks and uncertainties. In addition, for reconciliations of non-GAAP measures discussed on this call, as well as other information regarding these measures, please refer to the earnings release and other materials in the investor relations section of the company's website. It is now my pleasure to introduce J. Patrick Gallagher, Jr., Chairman and CEO of Arthur J. Gallagher & Co. Mr. Gallagher, you may begin. Thank you. Good afternoon, everyone, and thank you for joining us for our third quarter 2025 earnings call. On the call with me today is Doug Howell, our CFO, as well as members of the management team. Before I start, I'd like to acknowledge the damage caused by Hurricane Melissa in the Caribbean. Our thoughts are with all those impacted, including our own Gallagher colleagues. Our team of experts have been mobilized and are on the ground helping our clients and colleagues. Moving to our financial performance, we had a terrific and obviously very active third quarter. Our two-pronged revenue growth strategy, that's organic and M&A, delivered revenue growth of 20%. In fact, over the last 30 quarters, we've delivered double-digit top-line growth 26x. This is now our 19th straight quarter of double-digit growth. Clearly, our relentless client-centric, team-driven, and welcoming culture is thriving. Underlying that headline revenue growth, we posted 4.8% organic, grew adjusted EBITDA at 22%, and expanded adjusted EBITDA margins by 26 basis points, demonstrating we are getting substantial benefits of scale and the value delivered by our strategy of constantly focusing on improving our productivity while delivering our high-quality services. EPS for our combined brokerage and risk management segments, we posted GAAP EPS of $1.76 and adjusted EPS of $2.87. That would have been $0.22 higher had we levelized for the intra-quarter revenue seasonality related to AssuredPartners that we closed on August 18th. Doug will unpack this timing aberration in his comments. The punchline is our business continues to shine, and the early days of the AssuredPartners folks coming together with the Gallagher team is off to a terrific start. Already, we're selling together. We're showing that we are better by being together. Moving to the results on a segment basis, starting with the brokerage segment, reported revenue growth was 22%. Organic growth was 4.5%. Relative to our September IR Day commentary, we did see a little pressure on contingents and a few large life insurance cases shifted out of the third quarter. Adjusted EBITDA margin headline shows flat year-over-year at 33.5%. When we exclude merger and acquisition interest income, it shows underlying margin expansion of 60 basis points. Doug will give you a bridge from last year. That's terrific work by the team to stay vigilant in our relentless pursuit of being more productive every single day. Let me provide you with some highlights behind our brokerage segment organic. Within our retail operations, we delivered 5% organic overall within property and casualty, with U.S. up more than 7%. International flat, driven by less renewal premium increases and lower contingents. Employee benefits posted around 1% organic, driven by lower-than-expected large life cases. Shifting to our wholesale and specialty businesses, in total, we delivered organic of 5%, with the U.S. outperforming our international businesses slightly. As for reinsurance, it's a relatively small quarter, and organic here was in the high single digits. While not in our organic growth numbers, AssuredPartners' third quarter organic was 5%. That really shows you that a terrific sales-driven culture is joining our team. We continue to deliver organic growth across retail, wholesale, and reinsurance. Let me provide some thoughts on the property and casualty insurance pricing environment. Overall, global insurance renewal premium changes remain in positive territory, and we continue to see more carrier competition across property classes, particularly shared and layered programs and cat-exposed risks, resulting in renewal premium decreases. With that said, carriers continue to push for increases across most casualty classes, which are more than offsetting the property decreases. Let me provide a further breakdown on our third quarter global insurance renewal premium changes, which includes both rate and exposure by line of business. Property down 5%. Casualty lines up 6% overall, including general liability up 4%, commercial auto up 5%, and umbrella up 8%. U.S. casualty lines are up 8%, and that increase has been consistent over the past 12 quarters, suggesting domestic carriers are recognizing continued pressure. Package up 5%, D&O down 2%. We think perhaps close to bottoming out. Workers' Comp up a point, and personal lines up 6%. While property's down 5%, many lines are still seeing increases. In fact, global renewal premium change excluding property remains around 4%, with good accounts getting some premium relief and accounts with poor loss experience seeing greater increases. Looking at differences in renewal premium changes by client size, we continue to see some bifurcation. For middle market and smaller clients generating less than $250,000 of revenue, renewal premiums were up about 3%. For larger clients generating more than $250,000 of revenue, renewal premiums were down 1%. Many of the market trends we have been highlighting for the past three quarters persist today. As for the reinsurance market, a very small quarter for us. Looking towards January 1 renewals, the industry remains healthy. There's adequate capacity to meet expected demand. Property coverages continue to favor reinsurance buyers, while casualty reinsurance dynamics are more stable with continued caution for U.S. risks. Moving to employee benefits, we continue to see solid demand for talent retention strategies given the resilient U.S. labor market. Further, managing rising health insurance costs is becoming increasingly important for our clients as they deal with continued medical cost inflation. We are engaging with employers to help them alleviate the pressure from rising medical and pharmaceutical costs. Moving to some comments on our customers' business activity. While the U.S. government shutdown has halted economic data releases, our proprietary data, which has been an excellent indicator of the economy, continues to show solid client business activity. Third quarter revenue indications from audits, endorsements, and cancellations remain nicely positive. Interestingly, through the first three weeks of October, our revenue indications are showing even more positive endorsements and lower cancellations than in September. While we are watching our customers' business activity carefully, we are just not seeing signs of an economic downturn. Regardless of market and economic conditions, I believe we are very well positioned to grow. From our leading niche experts, vast proprietary data, award-winning analytics platform, extensive product offerings, outstanding service, and global resources, this puts us in an enviable spot competitively. As we sit today, we are seeing brokerage segment fourth quarter organic of around 5%, which would bring our full-year organic to more than 6%. Moving on to our risk management segment, Gallagher Bassett. Third quarter revenue growth was 8%, including organic of 6.7%. We saw strong new business revenue and excellent client retention in the third quarter and believe these favorable dynamics will continue through the end of the year. Accordingly, we expect about 7% organic growth in the fourth quarter. Third quarter adjusted EBITDA margin is 21.8%, a bit better than our September expectations. Looking ahead, we see fourth quarter and full-year margins around 21%, and that would be another great year for Gallagher Bassett. Let me shift to mergers and acquisitions, starting with some comments on AssuredPartners. Since the mid-August close, dozens of Gallagher leaders and hundreds of others have been traveling to AP offices and hosting gatherings. We've been sharing our stories with thousands of our new colleagues and highlighting all the tools and expertise that is now at their fingertips. I, too, have attended many of these meetings and events. I have to tell you, the level of excitement all of us have witnessed during these visits is literally palpable. We have shared a view that we will be better together. One plus one will be greater than two, and there is immense value creation for our clients, carrier partners, and shareholders. Equally important, they know they are now home, and they are getting the resources they have desperately needed for years. For those that are ready to join the amazing Gallagher culture, I welcome you. Outside of AP, we completed five new mergers representing around $40 million of estimated annualized revenue. This brings our year-to-date estimated annualized acquired revenue to more than $3.4 billion, or 30% of full-year 2024 revenue. That is fantastic. For those new partners joining us, I'd like to extend a very warm welcome. Looking at our pipeline, we have about 35 term sheets signed or being prepared, representing around $400 million of annualized revenue. Good firms always have a choice, and it would be terrific if they chose to partner with Gallagher. I'll conclude my prepared remarks with some comments about our bedrock Gallagher culture. As I am meeting with colleagues, both new and old, across our global network, it's always impressive to me how quickly new employees and acquisition partners come together as part of the Gallagher family of professionals, how we embrace the Gallagher Way and enhance our offerings and services to clients. As tenet number 24 of the Gallagher Way reminds us, we must continue to build a professional company together as a team. I believe this spirit of teamwork and shared purpose is precisely what is driving our success today. That is the Gallagher Way. Okay, I'll stop now and turn it over to Doug. Doug? Thanks, Pat. Hello, everyone. Today, let me first address the third quarter impact from rolling in revenues from AssuredPartners. Let's go to page seven of the CFO commentary document that we provide on our website. Over the last 30 days, we finally got usable AP data down to the customer-level detail. That gave us the policy inception date data necessary to implement our 606 accounting and harmonize revenue accounting methods. First, it's important to note that the new detail did not change our annual view of revenue or EBITDA. Second, however, it did reveal that AP's business is much more seasonally skewed than we could previously estimate. Two tables here on page seven help unpack this. The top table shows you the interquarter seasonality. It's easy to see first and fourth quarters have considerable seasonality, which you should consider when building your models. What this table doesn't show is the intraquarter seasonality. We've added the lower table. What this shows, while we owned AP for half the quarter, only about 40% of the policy inception dates were between August 18th and September 3rd. That produces an $80 million revenue difference to our September IR Day estimate, where we used a 50% assumption because we owned it for half of the third quarter. That causes a 22% shortfall to our indicated September IR Day estimate. You'll see that in the yellow column in that table. It does impact some of my other commentary, but I'll highlight those throughout my remarks. All right. With that said, let's go back to the earnings release, and let's go to page three. Brokerage segment organic growth of 4.5%. That's about $11 million of less revenues than our September IR Day thinking. Half of that relates to those lumpy live sales that didn't get closed. We've talked about that and how that can impact organic a little bit from time to time. That costs us about 30 basis points of growth. The other half or so relates to contingents. While there is some geography with supplementals, we did have an unfavorable estimate change related to one of our international programs. That costs us about 20 basis points of growth relative to our expectations. Looking forward to the fourth quarter, we see organic around 5%. A couple of items that influence our thinking when we make that estimate. First, as we discussed in our IR Day, we are in the midst of our annual update on 606 estimates. When all that settles, that could move that growth estimate a half a point either way. We know that's just accounting, but it can cause some noise. Second, always a little sensitive to the timing of those large live sales. If buyers believe rates may come down even more, they might push those into 2026. That said, if we were to deliver fourth quarter organic around 5%, we would finish the year with organic above 6%. That would be a terrific year. Flipping to page five of the earnings release to the brokerage segment adjusted EBITDA table. Third quarter adjusted EBITDA margin was 33.5%. That's flat year- over- year on the headline. As I do each quarter, let me walk you through a bridge from last year. First, if you pull out last year's 2023 third quarter earnings release, you'd see we reported back then adjusted EBITDA margin of 33.6%. Now, adjusting that using current FX rate, this quarter is about 10 basis points. FX adjusted EBITDA margin for third quarter 2023 is about 33.5%. From that starting point, the rolling impact of M&A used about 200 basis points, with more than two-thirds of that impact coming from the seasonality of AssuredPartners. Interest income, including the cash we are holding for the AP closing through mid-August, added about 140 basis points of margin. Most important, organic growth of 4.5% gave us about 60 basis points of margin expansion this quarter. This bridge helps you quickly see we're continuing to deliver terrific underlying margin expansion. As for fourth quarter, we don't see anything that causes us to change how we view underlying margin expansion potential. We still see terrific opportunities. Sticking at page five, the risk management segment organic growth was 6.7%. That was in line with our expectations, and that resulted due to strong new business revenues and excellent retention. We expect favorable new business and retention again in the fourth quarter, so it's looking like another quarter of organic growth in the 6.5% - 7% range. Adjusted EBITDA margin of 21.8% was better than our September IR day expectations. Looking forward, we still see full-year margins closer to 21%. Let's turn now to page seven of the earnings release and the corporate segment shortcut table. Each of these adjusted lines came in close to the midpoint or just a bit better than our September IR day expectations. All right. Let's leave the earnings release and go back to the CFO commentary document. Starting on page three with our modeling helpers. Most of the third quarter 2023 actual numbers, which were given excluding AP, were close to what we provided back in September. Looking forward, we are including AssuredPartners in our fourth quarter figures for depreciation, amortization, and earn-out payable. Also, please always take a few minutes to look at the impact of FX as you refine your models. Turning to page four and the corporate segment outlook for the fourth quarter 2025, not much change here from our IR day six weeks ago. Flipping now to page five to our tax credit carryforwards. Again, not much change from our IR day, but as a reminder, it's a nice cash flow sweetener to fund future M&A that doesn't show up in our P&L but rather via our cash flow statement. Turning to page six, the investment income table, we've updated our forecast to reflect current FX rates and changes in fiduciary cash balances. These numbers assume one future 25 basis point rate cut in December. Shifting down to page six to the rollover revenue table, the third quarter 2025 column subtotal is around $137 million before divestitures. That's pretty close to our September estimate. Looking forward, the pinkish columns to the right include estimated 2025 and 2026 revenues for brokerage M&A closed through yesterday, excluding AssuredPartners. Just a reminder, you always need to make a pick for future M&A. Moving down the page, you'll see that we expect fourth quarter 2025 risk management segment rollover revenues of about $16 million. All right. Flipping next to page seven, I hit on the major takeaways up front in my comments, but heads up on a couple of items as you use this page to build your models. First, take a hard read through the footnotes. This table shows our midpoint estimates. It uses a placeholder assumption for growth and also does not include synergies. We still see annualized run-rate synergies of $160 million by the end of 2026 and $260 million- $280 million by early 2028. The second point, the non-cash items that we show here, mostly depreciation and earn-out payable, are also reflected in the brokerage segment fourth quarter estimates on page three. Please don't double count those. Moving to cash, capital management, and M&A funding. When I look at available cash on hand plus future free cash flows plus investment-grade borrowings, over the next couple of years, it's looking like we might have $10 billion to fund M&A before using any stock, still at multiples with a terrific arbitrage. Before we go to Q&A, a few soundbites on our nine-month combined brokerage and risk management adjusted results. Revenue up 17%. Net earnings up 27%. EBITDA up 25%. Our organic year-to-date at 6.6% and EBITDA margin over 36%. Those are stellar results, and I see us finishing 2025 strong, and 2026 is looking like another terrific year. Okay, back to you, Pat. Thank you, Doug. Operator, if we could go to questions, please. Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Elyse Greenspan with Wells Fargo. Please proceed. Hi, thanks. Good evening. My first question, I want to start on AssuredPartners. When we're thinking about new business by AP, I'm assuming that that's in the M&A line, but then what about synergies? Does that fall on the M&A line, or is that something when they start coming online that will be included within organic revenue growth? The revenue synergies that we get out from that goes into the AssuredPartners P&Ls will be given credit to them, not to us. If there is something that we would book, for instance, a broader base contingent commission or supplemental, that if that impacts our books, that would go into the legacy Gallagher organic growth. To a certain extent, if we pick up some more on the AssuredPartners book of business, that would understate organic revenues. Does that help? Yeah, that does help. I think in the past, you guys have said that next year feels a lot like this year. You just said the full year is going to be, I think, just more than 6%. Based on how you guys are seeing everything today, is there more precise guidance just in terms of the organic outlook that you're looking at for 2026? Yeah, we're in the middle of our budget and planning process, but I still think we feel comfortable that next year, 2026 could look a lot like 2025. We still believe that early indications that we're having terrific success in our reinsurance business. We're having terrific success in our P&C businesses, too. As a matter of fact, when you really pull back the organic growth in the P&C business, it's been pretty consistent over the last five to seven quarters when you strip out property. Basically, our business is still running very similar today as what we were seeing throughout the year. That's what makes us feel comfortable that next year could be a lot like this year. My last one is on M&A. When you guys talk about the pipeline, I'm assuming that's now like a combined Gallagher and AP pipeline. How has, now that you guys have closed on the AssuredPartners acquisition, the M&A from their side of the house added to the pipeline, as well as just when you think about your bolt-on M&A over the course of the next year or two? Just give us a couple of weeks on that. We just really got closed, and we're kind of getting around that. As I said, we've been doing a lot of visits. We're going to have most of their folks in the field come to the home office over the next month and a half or so. That pipeline has not been yet put into our pipeline report. They did have a good pipeline. Things were working along. Of course, we're going to bring them together with our M&A people. I don't have a real good handle on that yet. We're hopeful that that business and those opportunities will roll right over to us, but I haven't seen that yet. One thing qualitatively on that is that what's happened is, as I sit down and talk to some of the branch managers or agency presidents that have come over that have been merger partners and AssuredPartners, I think a lot of them are, frankly, kind of surprised that we'd be so interested in them. They're in smaller communities necessarily. Their books, they're not quite as large. I think it's opened up the eyes to those 30,000 agents or brokers out there that, of all sizes, we have an interest. If you want to sell, you want to take care of your customers, you want to get better together, our doors are open for that M&A. I think there's an awakening. We want good producers that want to produce and good agency leaders that want to stay on and be a part of their business. I think that's going to lead to us getting more looks and more swings at the plate. It'll also take a little while to re-coke, if that's the right word. People are naturally cautious. We're going down a discussion track with AP. You've now gone a different direction with Gallagher. How are you feeling about that? Are you still wanting to put the recruiting press on me, or are you feeling a little bit hesitant? I think people want to naturally watch that. I'm very hopeful that when it starts to cook, it should cook well for us. That's what I'm hoping. Thank you. Thanks, Elyse. Our next question is from Andrew Kligerman with TD Securities. Please proceed. Hey, good evening. I just actually want to build on Elyse's questions. The first one on the organic growth. I recently spoke with two competitors in the small to middle market brokerage area, and both of them kind of said in this shallow pricing environment, 4% - 6% is a good organic run rate, that it's very doable and likely. How does that strike you? I mean, does that feel like the strike zone as opposed to in the past, you were looking more at upper single digit just given the pricing environment? Yeah. I think if we start on January 1, remember, we thought that we would be somewhere between 6% and 8%, and that's where we're going to fold out. The difference on some of that is our reinsurance business, our international business. I think that you've got a good nose into what might be Main Street U.S. retail. I think where we top up on that is because of our wholesale business that performs well, our programs. We've got that business, and then we've got our reinsurance business. Those are the things that make me feel being more on the upper end of that spectrum or that range than within that range. Got it. Thanks for that. Going back to M&A. I get it's kind of too early to talk about AssuredPartners pipeline and so forth, but just in terms of AJ Gallagher appetite, if a deal were to present, a large deal were to come across your desks, or if a deal outside of the U.S. that were large to come across your desks, would that be something you could do at this stage, just given the sheer size of AssuredPartners? Absolutely, yes. We can do that. Thank you. Thank you. Our next question is from Gregory Peters with Raymond James. Please proceed. Good afternoon. I guess first of all, I appreciate the disclosure on page seven of your CFO commentary. Doug, I think you mentioned or just reiterated the $160 million of synergies. That's not in these estimates. You can confirm that. Can you talk about the geography of that? Is that going to be in the operating expense, or is that going to be revenue and operating expense? I'm not asking to pinpoint by quarter, just. Ballpark where you think those synergies, how those are going to show up when we get to the year-end 2026. Yeah. I think by the time you get into 2026, it's easy for me to always say a third, a third, a third. We're going to get a third for revenue uplifts. We're going to get a third because coming together, we'll have some efficiencies in our workforce. I think a third of that will come from our operating expenses. The more exciting number really comes when you get to that as you start to push $300 million of synergies out over the next year, really over the next year and a half after the end of 2026. I think you're going to see terrific opportunities for us to deploy our technologies, the AI that we're working at right now. Greg, you've been around the story a long time. We have spent 20 years transforming our business. We have capitalized on labor arbitrage. We've deployed technologies. It's just part of our DNA. You put that over our tracks, and you put that $3 billion over our proven places where we've been able to deliver efficiencies, productivity, and raise quality. I think it's ripe for a tremendous, tremendous amount of better together, maybe even better than what we're saying right now. I think the better together stuff too, Greg, dispatch is the whole revenue side of things. I think there's a lot more closeness in terms of what we're producing, and there's a lot more opportunity to trade together. They are clients of RPS, but not to the same extent nearly that our present platform does contribute to RPS. They've got a host of business. Although they're a spread middle market broker, they do have a ton of business in the U.K.. We've identified literally millions of dollars of business opportunities to trade with ourselves there. Just across the board, we've already produced $1 million of new accounts with them in six weeks that are accounts we both mutually had in our prospect system. When we went out together with our tools, their connections, our connections, it made it easy for that buyer to join us. There's literally thousands of those opportunities. I think the trading better together is a real opportunity. Thanks for that. In your answer, you mentioned that you're going to have the AP gets credit in their book for their revenue synergies. It seems like you're keeping two books for the purposes of getting through the earnout period. Am I to infer from your comment that you're going to be taking or trying to encourage the AP retail reps to use RPS as opposed to other sources? Is that going to help drive your wholesale organic? If something like that happens, does that go on to AP book, and we don't see that manifest itself in terms of organic results for AJG? Does that make sense? I'll let Doug comment on how we'll account for it. He's got that down. Let me tell you about the opportunity. As you know, probably about five or six years ago, we went through the arduous task of going out to our retailers and cutting back from probably 500 separate wholesalers being used across the entire platform in absolutely no coordinated way. We moved that across to four specific strategic relationships, one of which was RPS, our owned wholesaler, recognizing that we needed others besides just ourself. I call it arduous because it was trench warfare, and we got it done. By the way, we did that to benefit our clients and improved it over and over again. AP is just Gallagher 15 years ago. We are going to have to go through that process. We are not mandating they use RPS, but we will start the process in the new year of saying, "Look, there's basically five." We will add one to that, and that will be it. We are going to just keep pushing and pushing and pushing. That, of course, does include what we would hope to be an outsized opportunity for RPS. Doug can talk about the accounting. Yeah. Greg, in that example, if we move it from wholesaler XYZ to RPS, that would be considered organic growth in our legacy numbers. We are talking about another 10 months of this, right? That would be legacy Gallagher organic growth. If they come on to a base commission schedule where we were getting 16% commission and they were getting 14%, that extra 2% of that base commission would be credited to that AssuredPartners historical branch. Does that keep us from having to consolidate these businesses for purposes of that solely? No. There's a self-adjusting mechanism because it's going to go to the producer. That extra compensation will go to the producer. For us to track the producer, whether they move from branch A to branch B, it's not going to produce any more difficulty. We are not keeping them separate from us. There is no earnout on AssuredPartners other than those that they bought that were still on an earnout. We will have. Their earnouts, but those will go away in another year and a half too. It's not going to put a burden, and we're not doing anything to keep. We're trying to put everybody on the same system and get everybody in the same playbook as fast as possible. Thanks for all that detail. For the final sort of cleanup question, just back to market conditions, there's a lot of rhetoric in the marketplace about where we are in the pricing cycle. I noted your comments that you're seeing some continuing stability and especially your middle and small market exposures. Maybe you can. Pat, you've been around, I don't know what number cycle you're on at this point in time, but there's a number of them. I'm just curious how you think this is going to play out over the next two or three years because certainly it seems like large account properties are under a lot of pressure, and there's some other areas where there's pressure points. Yeah. I'd be glad to talk about that. I've done this in the past, Greg, so it's consistent with my previous comments. Surprising to me, a couple of years ago when I was in London, we'd just gotten done putting forward and selling 300% renewal increases on our public company D&O book. I was with the FI team in London, and they said, "Pat, this thing is going to soften fast." I'm like, "How can that wait? How can that happen?" D&O is going to start to drop down, and so is cyber. I go, "Guys, you got to be kidding me." That started about two and a half, three years ago and continues. At the same time, during that period, other lines were continuing to firm. What I think we're seeing this time, which is different from the cycle in the late 1980s into the 1990s and different from the cycle in 2005, is that there's less of all lines down, all lines up, which is why we try to give it in our prepared comments. The property market clearly is in a good spot for clients. It's been a hard place for clients the last number of years. They're getting some relief. That's a positive thing. When you take a look at the casualty market, isn't it interesting that we're still seeing rate increases there as they look to the pale on that stuff and realize they've got to adjust to it? I do believe that you have cycles within the cycle, which is different than the past, and this is my fourth. It's different than I've seen in the past, and I think kind of makes sense. I think. We're always one storm or one disaster away from a firming property market. Casualty takes a long time to sort of figure out. You don't know your cost of goods sold, and it bleeds in. Then you've got ancillary lines like package or what have you. The interesting thing to me is that this is also bifurcated in a different way than it was in the past. Our large accounts are demanding discounts, and they're getting bigger ones. Makes some sense. They wield more premium. Smaller accounts, which were in the last cycles down as well, not so strong. We'll see how this all shakes out, but I think the dominant theme here is it's going to be cyclical. It is cyclical, but I think it will be by line and by results by line. Cycles within the cycle. Great answers. Thank you. Our next question is from Meyer Shields with KBW. Please proceed. Good evening. This is [Jing Hong] for Meyers. Thank you for taking my question. My first question is a follow-up on the pricing dynamics. We do see some deceleration in casualty, so 6% this quarter. Do you think the trend will continue to decelerate or stabilize from here? Just wondering what is your expectation going forward? What you're saying, let me make sure I understand the question. You're seeing a deceleration in the casualty pricing increases, not a decrease in casualty pricing. We're not seeing that. We disagree with that. I think that on a quarter-by-quarter basis, you could get a little bit of mixed difference that might cause us to look at. Let's face it, this thing's marching up at 6%- 8% a year, has been for three or four years. I don't think things are getting less risky out there. I think that the carriers are being smart by staying ahead of this and continuing to march forward on the casualty pricing. The other thing too is remember, I know you're asking questions about late. There's also exposure unit change underneath there. Also, our customers, remember this, when rates are coming down, they opt in for more insurance. They buy more insurance. When rates are going up, they opt out of it. We're actually seeing revenue increases in lines that are higher than what rate declines that we're seeing in it. The fact is people are buying more insurance within that line, i.e., more exposure. They drop their deductibles. They raise their limits, so they're buying more insurance. The brokers will never track 100% the rate because of this opt-in and opt-out. We used to speak about that a lot 10 years ago. It's not just rate. It's just what are our customers' budgets going to afford? As our customers grow, we'll sell more insurance too. A person has 100 trucks, and they go to 105 trucks, they got to buy 5% more truck insurance. Got it. Thank you. My second question is kind of on the industry. We noticed one broker continuously expand its wholesale operation in London and recently entered the U.S. retail market. Just wondering what's your take on this and how does this impact Gallagher? I'm not going to comment on our competitor strategy. Things are perfect for us. Thank you. Thank you. Our next question is from Mark Hughes with Truist Securities. Please proceed. Yeah. Thank you. The employee benefits, you had some slippage in a couple of large life cases, but as a general line of business, how do you see that shaping up for fourth quarter of 2026? The fourth quarter is a time where we do a lot of our helping customers' enrollment. We see that as pretty strong right now. I think that there's a lot of help as people are trying to change their dynamics, so we're helping folks out with that. I think that it gets into the executive comp lines where people are looking for their strategies coming into proxy season. The base medical sales right now too, I think that human resource leaders are waking up to the spiraling and the increasing cost of medical inflation, both on the utilization and then cost on the utilization. You're having a frequency that pops up. I think this is going to be a time where if you go back, I don't know, X years ago, I think there's always a war for talent, but right now, I think human resource folks are really working hard on this escalating cost of medical inflation. That will put some opportunities into our books here in the fourth quarter, and I think it'll keep us really busy next year. Yeah. How about new business, Pat? In your experience, at this time in the cycle, things are a little—understanding that casualty is still up and still is a tough market. Is it a little easier or harder or about the same to go out and get new business? No, look, I think you raised a good question. It's kind of an interesting time. First of all, it's nice in a time like this you can deliver for your clients. We're not constrained by capacity in just about any way. At the very same time, you have our littler competitors, and you'll recall that we compete 90% of the time against smaller players. They can surprise us with a quote we didn't expect. You can end up sitting there saying, "This is a great deal," and someone will come in with something crazy. Quite honestly, our clients are not happy. They've gone through five years of listening and listening to increases and what have you. We've been able to show them with our data and analytics why it's happening, where it's happening, what to expect. Sometimes that local guy will get a shot at something and deliver a price we've got to match or what have you. I think that it's both a very good time for new business because our people that are aggressive on the phone, out talking to people, can really deliver. At the same time, we have to reemphasize and resell the existing book we have. I think we're good at that. Overall, I think it's probably a positive for new logos, and it's probably less of a positive for top-line revenue growth. Very good. Thank you. Thanks, Mark. Our next question is from David Motemaden from Evercore ISI. Please proceed. Hey, thanks. Good evening. I had a question just on the property market. It was encouraging that RPC held in at down 5%. I think it was down 7% in the second quarter. Given the light storm season, I'm just wondering how you're thinking about the property market overall going forward, not only for the fourth quarter, but then also for next year. I think the property market is going in a direction that makes some sense given the fact that they've got good results. The cap bond industry is doing well. Record ILS activity, reinsurers are making a good return on what they put at risk. I think there is more capacity available. I think there's continued pressure on the downside. That influences our pick. If it was down 5% to 7% this year and what we post this year, next year, if it's down 5% to 7%, that's baked into our outlook for next year. I will say this too. I do not sense a dramatic decrease coming in the fashion of past cycles where all of a sudden you turn around and it's off 15%. I'm not sensing that at this point. Got it. That's helpful. The sort of like a down 5% to 7% is embedded, Doug, in your early thoughts on next year looking similar to this year. That's right. Okay. Great. Thanks for confirming that. And then also. It seemed like the RPC was fairly stable with what you guys had said in some of the other lines versus September. Just if I think holistically about the book, could you just talk about what RPC is trending at or what it was in the third quarter compared to the second quarter and maybe where it was in the first quarter? Yeah. I think overall that we're seeing basically a 4% increase across the book. I think Pat said that in the early part of his comments, probably got lost in there a little bit, that overall we're still seeing a business where the rate and exposure are moving north 4%, 5%, something like that. Got it. Thanks. Maybe if I could just sneak one more in. I noticed that you guys generated about $500,000 on AssuredPartners' fiduciary balances in the third quarter. I would have thought that that would be a decent-sized opportunity for you guys. Is that something—it doesn't look like much of a change in your fiduciary expectations for the fourth quarter. I know the interest rate environment has changed a little bit, but how are you thinking about the fiduciary cash at AssuredPartners and how much revenue you think you can generate off of that next year? I think it's a great opportunity over the long term. If you go back, and I think one of you, it might have been Adam Klauber, was asking a lot of questions about what we're doing in order to channel working capital. We would talk about consolidating bank accounts over and over and over 10 years ago, and we really did a great job of bringing more efficiency to our free cash flow management, our pooling across divisions, and then also just the ability to quickly harness the fiduciary monies and put them into interest-bearing accounts. I see it as a terrific opportunity. I got to go back and take a look at our assumptions going forward, and we'll probably update those in December a little bit. By and large, I think over the next few years—and we haven't baked that into our synergy assumptions when I've been talking to you—but there will be an opportunity for us to consolidate those accounts and harvest those cash flows faster. At an interest rate that's a little bit higher than it was 10 years ago, there's a pretty good payback on that. Yep. Understood. Thanks, guys. Our next question is from Ryan Tunis with Cantor Fitzgerald. Please proceed. Hey, thanks. Good evening, guys. Definitely one of my favorite leadership teams between Pat, Doug, Ray, but I got a couple of kind of tough questions. First one for Pat, second for Doug. Shoot. We're ready. All right, Pat. First one, I was going through some old transcripts. I think it was 2013, maybe 2014, but it was when the last hard market was kind of in this situation. You guys were doing one organic. What I'd say, Pat, is you sounded on those transcripts the same way you do now. We're killing it. We're doing everything. Positive, bullish, and really excited. Exactly. You were doing one organic, and that was execution. Now you're talking about six. My question for you is, what is actually different? I think you appreciate this time in the market, and I'm curious what you're thinking about why you'd be able to do six now, and back then one was good. It's really simple. First of all, the market's not falling off the lowest as fast across all same lines. Right now, we're dealing with still, across all of the lines, a positive 4%. If you go back to 2013, 2012, and 2014 and look at what was actually happening, it wasn't until about 2015, 2016 that any price increases anywhere were coming into positive territory. Now our renewal book is still producing 3%- 4% organic. Yes, property's down. At the time when we were talking in 2012 and 2013, I think we had a pretty clear vision of what we were trying to accomplish. Even though the pricing environment was down, we saw opportunities to do good acquisitions, to become more efficient. At that time, people—we're over 20+ years now of working with our colleagues in the GCOE, both in India, in the Philippines, in Scotland, in Las Vegas. We're up about 16,000 people providing over 500 services to us around the world. Yes, there's an arbitrage in cost there from employment, but there's really a huge increase in productivity and quality as well. What we do is better. I think we saw that. We were very excited about it. I look back at those times, and at that very time, what you'll recall we were telling you is that the two-pronged approach—people look at acquisition activity and go, "Oh, you bought that growth. That doesn't count." Last I looked, when you buy something at an arbitrage, in many instances, as much as 50%, someone's giving me a dollar for $0.50. I think that's a pretty good deal. I see the same dynamics now. In fact, if anything, the dynamics are stronger in our presence now because we're bigger, our brand is stronger, our data and analytic capabilities. Just take 2012. We did not have any real capacity to take structured data and tell you the things we told you tonight. What happened to [Work Comp last month in Oregon]? I can tell you. In fact, I can tell you what happened yesterday. Our data lake, OneSource, now actually comprises three years of the AP data. We've gotten that done in less than two months. When we go to Gallagher Drive to the field and we talk about people like you buy this, and this is what's happening to rates in our book, that's real Gallagher/AP data as of today, by zip code, by line, by geography. Customers want that stuff. Do we weather up and down rates? Yes. Ryan, just pull up the chart and look at our TSR. Seems like it worked. Before you get to your top question for me, let me throw in one thing. 2013, no international presence to speak of. We hadn't done any acquisitions and built the business we have in the U.K., Australia, New Zealand. We didn't have reinsurance. RPS was, "Yeah, use them if you want." We didn't have the programs that we have now. Back then, Gallagher Bassett was a pretty good grower and still is a pretty good grower in the claims business as people saw the value that they create. We're a different business today by far. The excitement hasn't changed about our opportunity because we still see opportunity. Still see opportunities to trade better with ourselves, to take more market share, to outsell our smaller competitors. It's a different franchise today than it was in 2012. That should bring you some optimism that if we were opposed to 1% then, makes 6% look pretty easy now. Oh, it's easy. Go ahead, Ryan. Next up. Give me my hard one. All right. I'll speed up, man. All right. So your hard one, Doug. Yeah. It's not easy, but you're known on the street definitely for throwing a real fastball. One-on-one, you always nail everything. I go back to 2020. It's like you had a bug in everyone's living room. You knew exactly what you were going to do. This was in the most uncertain environment in the history of the world. We've had a couple of quarters here where we've had an investor preview, and then you've fallen a little bit light. I'm a little worried you're overworked, but I'm wondering where's the fastball a little bit in terms of being able to forecast. Adequately or accurately exactly what's going to happen? Sorry, guys. Again, thank you. Yep. The 5% that we talked about in September, I did give you a heads-up that there could be some slippage because of the large live sales. That's $11 million on a $3 billion quarter. Yep, that one, I told you it was coming. The adjustment in the contingent commission line that they have to true up for an international program that sometimes has some three-year rating on it, I just didn't have insight to it, but across about on a contingent contract where we've probably got about 600 different contingent contracts, that cost us $4 million too. You're right. Of the $11 million out of $3 billion, I was off my game on those two. Half of it got past me. No, no. I love you guys. Thank you, though. I appreciate it. You're right. I missed $4 million out of $3 billion. Sorry. Our next question is from Andrew Andersen with Jefferies. Please proceed. Hey, good afternoon. Just as we're thinking about kind of the building blocks to organic here, I think you've talked about international a bit as maybe being additive or incremental. I guess if I look at some of the international retail, U.K., Canada, Australia, New Zealand, it's kind of been low single-digit year to date. Are you expecting some uplift in 2026 or kind of steady in that market? Listen, I think right now our businesses are performing about where they're going to perform next year. I got to say, I'm always pleasantly surprised about our specialty business in the U.K.. They are creative. They use our tools. They have great market insight. I'm really excited about the niche experts that we have in our business. When we pick up the AP business, it makes our niches stronger. Also, we're picking up some terrific new niches out of the AP where they've got some really smart people. Wherever we have our smart people, they hit it out of the park all the time. We have the steady, smart people that are in kind of tough markets. I don't see a lot of difference between what we just talked about here this year, next year. Our guys and gals are doing a terrific job out there of servicing their clients. I don't see a lot of difference. If that was the essence of the question, I'm just not seeing us any places where we've got any weakness right now. Got it. In the past, we've talked about maybe 6% organic underlying expansion of 60 bps or so. How should we think of maybe the sensitivity there if that growth is being led by specialty, which I would think is a little bit higher margin versus retail, which is maybe a little bit below? Any sensitivity we could be thinking about there? Listen, our specialty business is pretty complex. The professionals that we have on staff to service that. It's not just somebody—it's a generalist that goes out and talks about how you sell insurance on an oil well or on a SpaceX cargo or on a marine placement. Those tend to actually have some heavier support costs that go along with it. Our benefits business, the actuarial services that we provide in particular that are coming out of the Buck acquisition. I think our niche retail business, where we're really strong in a particular niche across the—it doesn't matter whether it's the U.S., Australia, New Zealand—so that runs pretty good margins. I wouldn't say that specialty is necessarily a laggard that retail is a laggard to specialty when it comes to margins. Thank you. Thanks, Andrew. Our next question is from Katie Sakys with Autonomous Research. Please proceed. Hi. Thanks. Just a quick one from me. I realize it might be a little bit too soon to tell, but thinking about the 200 bps headwind from Roland on this quarter's brokerage adjusted EBITDA margin, how might we think about impact from Roland of M&A going forward? Good question. I think that, first of all, you have to think about the seasonality that we show on page seven of only getting a half a quarter, not even a half a quarter, 40% of a quarter, and how that causes—because you got more of a steady fixed cost structure on a lower one-and-a-half-month period. How do I see it going forward? Let's just take the fourth quarter in particular. I think that AssuredPartners, because of the seasonality, their business might hurt margin by about a point. I think the Roland businesses that we bought that naturally run lower margins would probably be about 40 basis points of a headwind. I think that lesser interest income, etc., might be somewhere around a half a point. The underlying margin we're seeing in the fourth quarter is still in that 40 basis point- 60 basis point, 60 basis point expansion. If you're thinking ranges like that, we're going to get a half a point increase from organic, we're going to give back a point because of the seasonality of that and of Assured. Then the natural roll-in of M&A targets that have not yet reached our margin levels is another half a point on it. That's how I'm thinking about it. Thank you. Our next question is from Rob Cox with Goldman Sachs. Please proceed. Hey, thanks. Yeah, just a question on reinsurance brokerage. Just wanted you guys to help me out here. You've been growing in excess of your two larger peers in this business for a while. It sounds like you're still confident here. If pricing takes another leg downward, I'm just trying to gauge your confidence level in still being able to achieve high single-digit organic here. Is that due to growth in adding new accounts, or is that growth in accounts that you already have? Oh, I think it's both. I'll tell you one of the things that has worked out, Rob, at a level that I'm very, very proud of. When we did the Willis transaction, one of the things we told the investor community and our people is that we thought there was an advantage of making sure that our retail operations, our wholesale operations, and our reinsurance operations were seen together on the same page, helping each other, producing service clients. Frankly, that's a bit of a different model than some of our competitors, and that has worked to a level that I think is better than any of us expected. Our team is talking all the time. We are connected at the hip. You can see that the CIAB, that's the Council of Insurance Agents and Brokers, just had their rendezvous, if you will, out at the Broadmoor a month ago. The meetings are comprised of all the parties that are trading with those companies. The discussion on strategies are together, and I think that's a big part of it. I think that when I look at where we are, we've had good growth with our existing clients. We've been able to help them, and we're very appreciative of that. We have added new accounts. The thing that I'm kind of excited about with AP, quite honestly, is that they're trading with a lot of smaller markets that we've never traded with. I won't get into a bunch of names, but you know them all, and yet, we didn't really transact. AP has very good relations with those companies. Coming out of the Broadmoor, we're kind of excited to say. This doesn't diminish our continued commitment to our large trading partners that we've had at Gallagher forever, but adding some new people to the list that AP already has a real positive relationship with, I think, once again, we'll be tied together at the hip. It'll be good for production on all sides. I think new account opportunities benefit from that, as well as penetration from our existing business. I continue to be very, very bullish on reinsurance. I'm very impressed with our team there. We've got a very smart group of people. Two other adds on that. Every time we open up a new carrier relationship on the retail side and have it, it opens up the opportunity to not only do reinsurance but also to do claims management for them. Our Gallagher Bassett unit has a terrific carrier outsource practice on that. That's not runoff. That's carrier outsource of white labeling their programs. The second thing, too, is on our reinsurance program. We are really strong in casualty. Another step down in property, I think there's going to be lots of appetite. More reinsurance, but we are pretty heavy in casualty, so you can't think about the entire reinsurance book as being a cap property book. Hope that helps. That's super helpful. Thank you. Thanks, Rob. I just wanted to follow up on contingents. Profitability for these insurers seems to be pretty good, and I think there is a little lag there. I'm just curious if your thought process on contingents plays into your thought process on relatively stable organic growth next year. Yeah. I mean, I think, look, when the carriers are doing well and we're on a contingent commission, and that's a very big part of what we're doing as wholesalers, MGAs, and program managers, we do well. I feel good about that. We're pleased to see those carriers that we've been representing and partnering with doing well. We'll get our fair share of contingents on that. Now, the other side of that is that we have supplementals, which are not subject to profitability but are subject to growth. There, again, I think we're seeing very good growth. I do also believe that the arrangements that we have with many of the carriers that AP does trade with, our arrangements are stronger than theirs, and they're going to benefit from that. All in all, I feel good about our supplementals and contingents going into next year. By fact, they are growing at about 1.5x as fast organically as what we're growing in the applicable books of business. They are outpacing slightly on the organic growth. As we think about next year being like this, we're not expecting a spike up in those or a spike down. If the carrier profitability is good as it, that could be a little bit of an upside case in our organic for next year. Great, thank you. Our last question is from Mike Zaremski with BMO Capital Markets. Please proceed. Hey, thanks. On the organic viewpoint next year, what's your estimate of embedded in there on lumpy life sales? I know you guys don't love us asking about it, or maybe I'm wrong, but you do keep bringing it up, so I feel like I have to ask. No, actually, we don't mind you asking about it at all because I think it's informative on some of these small little couple million dollars here, a couple million dollars there. We think we'll have a good year next year as rates drop. Next year, if you believe that to happen, either one of two things are going to happen. Rates are going to drop, and so they're going to have people that want to come in and buy this because it's a cheaper product for them, so that should fuel demand. If rates become stable, we're not going to have people wait around for the next drop. A lot of these are products that you have to buy at a certain point. You can play with timing the market by a quarter or two, but by and large, I see 2026 being a more favorable backdrop for these products than 2025 was. Over the course of the year, they don't vary all that much in total magnitude. It's this noise between quarters that sometimes causes us to talk about it a lot. It's a great product. We're really good at it. It's needed. It's necessary. I think 2026, we could be pretty excited about it. It hasn't influenced our pick in terms of what we see for next year. I could see an upside case on that too. Okay. Not quantifying it, but I guess I ask, and others ask, if we look at the RPC trends in recent quarters, and I think you unpacked some of your thoughts on next year for property to David's question. It kind of would imply that if we assume the current RPC trend sticks, that 6 trend sticks - 8 trend sticks is just a high bar unless there's just other factors, which maybe it's lumpy life, and you just alluded to maybe there's the contingent and subtrend growing faster or it's reinsurance. I know I'm saying a lot, but maybe is there, should we not be focusing on kind of RPC as much as we used to, because there's kind of other levers you have to pull on organic to be able to kind of do so well next year in a decelerating kind of pricing environment? Listen, we've always said that, again, I'll go back to my first comment on one of the first questions today, is that we're in this opt-in era when it comes to coverages. That would be the departure from as people get cuts in their base rate, they're going to buy more insurance. That should fuel next year. I believe there's a lot of underbuying of insurance that's going on. I think that people over the last five years have underbought. I think that we still, there's a big elephant in the room, and that is replacement cost. I think the carriers have paused and tried to get right for that a little bit. I think they got to get back on that because replacement costs are still skyrocketing. I think there's an upside case there as carriers get back on trying to get more rate for the exposures that are underinsured values on that. It's not a direct correlation by any means. That's why we weren't growing our property business 20% when property was up 20%. We were growing half of that. That's the area that we're in right now, is that people are going to opt in to buy more coverages. I think we're going to win more business because we get to use our tools and resources to demonstrate that in a calmer environment that you get more from buying through Gallagher. The value we're bringing, I think clients see that. Our retention's good. Yeah. Like Pat said, there are some angry clients that probably are going to want to get a new fresh face across the table, but I think our team is doing a good job to show you, "Stick with us, and we'll get you through this. Okay. That's helpful. Maybe just lastly, on M&A, to the extent I'm sure you guys will hit your targets on Assured in terms of all the synergies and whatnot, clearly it'll be a great deal for everybody. Curious if there's other Assureds out there. Obviously, there's lots of roll-ups out there, but I recall, Pat, you said that for Assured, you didn't get a look at lots of those properties that Assured had purchased, so you kind of felt more comfortable doing this deal because they didn't say no to Gallagher in the past. Are there other similar ones out there, or maybe you just would be willing to do more of just other roll-ups that might have been looked at Gallagher in the past too? Thanks. Yeah, I think there's a lot of them. I do. I think there's a lot. I also think that they remember, there's 30,000 agents and brokers, that's firms in America, that are independent firms. There's lots of opportunities for us to continue building our pipeline. Should another opportunity like an Assured come along, we'll take a very hard look at it. I think it should be clear, like you say, there are so many terrific family-owned agencies out there that I think that we're going to get our fair share of those along the way too. We love our tuck-in strategy. If there's a big one that comes along and only 5% of them told us no when we were looking at them, I think that would be a terrific opportunity for us. Thank you. Thanks, Mike. Thank you again, everyone, for joining us. We've had a great 2025 thus far, and as you can tell, I remain very excited about the rest of the year and beyond. To our now 71,000+ colleagues, thank you for all that you do for our clients day in and day out. We've got the best team in the industry, and I think it shows. Thank you all for sticking around late in the evening, and have a good rest of the evening. Thank you. This will conclude our conference. You may disconnect your lines at this time, and thank you for your participation.