Arthur J. Gallagher & Co. (AJG) is one of the largest global insurance brokerage, risk management, and consulting firms, with operations in more than 130 countries and annual revenue of roughly $10.1B. Its business model is primarily fee- and commission-based, helping commercial clients place insurance coverage with carriers while also providing employee benefits brokerage, claims support, and risk advisory services. AJG has built scale through a mix of organic growth and acquisitions, competing against large global brokers such as Marsh McLennan, Aon, and WTW, while also facing thousands of regional and specialty brokers.
You are interviewing for a strategy role at AJG. The interviewer wants to test whether you understand the insurance brokerage industry and can think beyond a generic “I want to work here” answer. Assume AJG is evaluating how to accelerate growth in the U.S. middle-market commercial brokerage segment over the next 3 years. Leadership must decide whether to prioritize: (A) deeper penetration of existing middle-market clients through cross-sell and specialty products, (B) acquisition of regional brokers, or (C) a digital go-to-market motion for smaller middle-market accounts. The decision matters now because pricing in several commercial lines is stabilizing after a hard market cycle, acquisition valuations remain elevated, and clients increasingly expect data-driven advisory support rather than pure policy placement.
| Metric | Value |
|---|---|
| AJG total annual revenue | $10.1B |
| Estimated brokerage EBITDA margin | 24% |
| U.S. middle-market commercial brokerage market | $32B annual revenue pool |
| AJG estimated share in this segment | 6% |
| Average regional broker acquisition multiple | 11x EBITDA |
| Additional operating assumptions: |