Arthur J. Gallagher SWOT Analysis [Update 2022] ❤️

Arthur J. Gallagher SWOT Analysis 2022

Arthur J. Gallagher & Co. is an international insurance brokerage company and risk management services, provider. 

The company’s strengths include its business performance, cash position, and cost-efficiency. However, the company’s investment income is still a concern. 

The company will be able to grow through strategic acquisitions and the growth of the general insurance segment in the US, UK, and other countries. 

The company’s performance could be affected by changes in regulations, fierce competition, the coronavirus epidemic, and currency risks.

Arthur J. Gallagher SWOT Analysis

What are the most important elements of SWOT analysis/ SWOT matrix?

The SWOT analysis is a method to evaluate the strengths & weak points Arthur J Gallagher possesses and the opportunities & Threats they face. company is confronted by macroeconomic and competitive factors that are prevalent in the United States.

SWOT analysis offers valuable insight into both external and internal elements that affect the efficiency of an organization. 

It is a great tool for the leadership of the company to improve performance, search for opportunities that are not being explored and manage competition, increase the return on investment and minimize the risk of various risks to policy and business.

Strengths In The SWOT Analysis Of Arthur J. Gallagher  

❤️ Consistency and Performance: Revenue could be increased for the 2016-2019 period, excluding the FY 2020. Between 2016 and 2020, the company’s total assets grew to $22 331.4 million. The company has seen an increase in employees over the same time period. By FY 2020, 32,401 employees were employed ( AJG).

❤️ BBB rating from S&P: S&P gave AJG a BBB rating in 2020. This means that the outlook of the company has been stable. This is based on a company’s business risk profile. AJG is deemed satisfactory. This does not mean that the company’s business growth or competitive position will be affected by the change. This assessment also includes the pro forma adjusted EBITDA margin for the company, which is between 26-28% ( S&P global, 202).

❤️ Acquisition as a growth strategy: The company actively pursues acquisition. In 2021, the company purchased Agribusiness LLC, and Lloyd Bedford Cox, Inc. In the last 5 years, 429 companies have been acquired by the company (Mergr and 2021). The much-awaited Willis Tower Watson Plc was not yet available. The company and Aon Plc ended the acquisition agreement. They could not agree on common ground with their acquisition by AJG ( PR Newswire), 2021.

❤️ Investments in Technology: The company actively funds its competitive advantage development. One such tool is the Gallagher Drive analytics, which aids in data mining and related decision-making. These data visualizations can provide valuable insights that support risk management decision-making. Core 360 program can be used to enhance analytics-based decision-making by consultants ( AJG and 2021 C).

❤️ Higher Indian market investment: AJG has accepted to assume full ownership in 2021 of Edelweiss Gallagher, the Indian broker in which Gallagher held a minority share since 2019 ( The Insurer 2021).

Weaknesses In The SWOT Analysis Of Arthur J. Gallagher  

❤️ Drop-in Revenue: The company is concerned about the decline in revenue, even though commissions were up. This is in addition to the expected decline in PE ratios for 2021, 2020, and 2023 (, NASDAQ, 2023).

❤️ Data Breach A proposed class action is being brought against the company for a data breach that took place in June 2021. The data breach exposed personally identifiable information (PII), both of the customers and employees, to third parties who are not authorized to acquire or manage such data. AJG is charged with negligence and failure to take reasonable security precautions to prevent data breaches. The company is also accused of delaying notification to affected persons ( Shaak 2021).

❤️ had to settle for 8 million: To end a class-action suit alleging that it misclassified its managerial employees’ work and forced them to work overtime, the company had to agree to an $8 million settlement ( Adriano 2021).

Opportunities In The SWOT Analysis Of Arthur J. Gallagher  

❤️ Indian insurance markets are poised for growth. Between 2019 and 2023, the life insurance industry is expected to grow at 5.3%. Given that only 3.6% of the market is covered, there is potential for substantial growth in company years ( Indian Brand Equity Foundation 2021). AJG’s presence in India is a benefit, provided that it remains competitive in its market.

❤️ Renegotiation of the acquisition deal with Willis Towers Watson and subsequent successful acquisition can make it the third-largest global reinsurance company after Aon Guy Carpenter ( The Insurer 2021). This also allows for the leveraging of the combined resources between the companies, resulting in an enhanced competitive advantage in the market.

Threats In The SWOT Analysis Of Arthur J. Gallagher  

❤️ The slowdown in economies: The insurance sector is one of the most important industries in any economy. It collects premiums and invests large amounts. However, it also plays a vital role in managing personal and business risks. Premiums fell in both the non-life and life sectors in 2020 ( OECD; 2021).

❤️ Transformational change: PWC (2021), observes that in 2020, insurance companies will face more changes than in any previous year. Consumers expect seamless service and higher value. The industry is finding it more difficult to build a brand ( PWC 2021).

Limitations of SWOT Analysis: Arthur J. Gallagher

The SWOT analysis is a popular tool for strategic planning, but it does have some limitations.

  • Some capabilities or factors can be both a strength or a weakness of an organization. This is one of the main limitations of SWOT analysis. If the company is able to develop products faster than its competitors, changing environmental regulations could be a threat or a benefit.
  • SWOT is not a way to gain a competitive advantage. It should not be a goal in and of itself.
  • This matrix is not intended to be a guideline for how strategies might be implemented. It was intended to be used as an evaluation tool, but not as a plan for implementation.
  • SWOT is a static analysis – an analysis of the status quo that includes a few potential changes. The dynamics of a competitive landscape may change as circumstances, capabilities, threats, and strategies change.
  • The SWOT analysis could lead a firm to focus too much on one external or internal factor when formulating its strategies. SWOT analysis may not show the interrelationships between key internal and external factors. This could be an important factor in formulating strategies.

Arthur J. Gallagher’s Weighted SWOT Analysis

Due to the limitations of the SWOT matrix/SWOT analysis, corporate managers decided that each firm’s internal strengths and weaknesses should be given weightage. Organizations assess the impact of future events on company performance and the likelihood that they will occur.

This is a Weighted SWOT analysis. This is better than a simple SWOT analysis. Managers can concentrate on the most important factors and ignore the rest. This solves the problem of organizations making too many lists, but not enough critical factors.

References Books on Arthur J Gallagher SWOT Analysis

Arthur J Gallagher (2018), “Arthur J Gallagher Annual Report”, Published in 2018.

Euromonitor (2018), “Financial Sector Analysis “, Published in 2018.

A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)

L. Wrigley, Divisional Autonomy and Diversification (Ph.D., Harvard Business School, 1970)

M. E. Porter, Competitive Strategy(New York: Free Press, 1980)

O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975)

R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)


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“The report draws on a broad variety of secondary and primary sources, which are then analyzed before being presented in a uniform and easy-to-read format. 

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