Not a lot to learn. Our reinsurance team has added a tremendous amount of value and helped us add cover for the pools and revenue for our retailers and revenue for our reinsurance people. So, it’s been an incredible two-year journey, and we’re just getting started in terms of the opportunity to play together in the sandbox. What was the other question, Andrew?
Andrew Kligerman: Facultative…
J. Patrick Gallagher: Facultative, but of course, now coming along with treaty clients and having our retailers — here is an example of what you’re talking about, where retailers are trying to get things done and oftentimes it’s hard to place areas like property, et cetera. We are seeing our facultative opportunities grow. No, it’s not brand new. But we are organizing ourselves better in the fac world. And I think we’re getting — we’re in a better position today than six months ago to go out to our insurance carrier customers and our trading partners and say, “We want to participate in this. We want to help you.” So, we are seeing an uptick in opportunities.
Andrew Kligerman: Lot of tailwinds there. Shifting over to Risk Management and the organic change in fees. I mean, just it seems terrific. And I’m just wondering on the claims management side, what kind of carriers are you growing with? Are they the large ones? Or are they the small ones? Like where are you seeing the most growth in claims management?
J. Patrick Gallagher: Well, you’re seeing two things. One, our historical play in the Risk Management accounts, where you’ve got large accounts, you name it, whatever the large hotel chains or what have you, that are procuring our business on their accounts. And there’s — we’ve got a great, great year in that regard, and that includes public sector clients as well. And then as you know, we have over the last decade or so really focused on outsourcing of claims from insurance companies. And I don’t have liberty on this call to name some of those because some of those carriers are pretty well-known carriers and not one that I necessarily have the approval to be touting. But from inside the organization, you look at some of these carriers you go, it’s fantastic.
And then, of course, the regional small companies that would like to expand that don’t want to add infrastructure, they think they’ve got an opportunity in a given stage or geography. They don’t want to be putting a lot of boots on the ground. We’re picking those up as well. So, the team at GB is, in my opinion, just outperformed expectations every single year.
Andrew Kligerman: It just seems like in the carriers, I mean, there’s just a lot of runway there.
J. Patrick Gallagher: Well, let me put it this way, Andrew. I really believe this. I believe that it will not be unusual, and I believe that people will ask. “Did insurance companies pay their own claims? Why would they do that?” When I sit with some of our insurance company partners and explain to them that Gallagher Bassett pays substantially more claims in numeric numbers and substantially more dollars than they do in claims by line of cover, by geography, not just in the U.S., the first reaction is oftentimes shock. And again, I won’t mention any names of carriers. They go no, no. Look, if you put a capital structure around GB and called it an insurance company, it’d be one of the five top insurance companies probably in the world.
Think about that in terms of the amount of claim work that’s coming through. And our focus, and this is, I think, really key, and what we’re selling and we believe proving day in and day out is if you outsource your claim work to us, whether you are a large risk management account through self-insuring or whether you’re a carrier, your outcomes will be superior. And if I look at an insurance company CEO and saying, “I think I’m worth or could help you find 2 points of ROE,” it could be pretty dramatic.
Andrew Kligerman: Maybe if I could just squeak one last one in on the contingent revenues. They were up 30% in the quarter. Just given it was such a great year for underwriting, do you see that kind of being flattish as we go into ’24, when you provided your 7% to 9% guidance, maybe that impact becomes flattish in the scope of it all?
Douglas Howell: No, I said it — I would say it would be in that same 7% to 9% range. I’m not going to see it outperforming that. And yes, we were pleasantly surprised by a few extra million bucks than we thought we were going to get there.
Douglas Howell: By the way, look through that number and see what it’s telling you as a potential owner. Our book of business is superior to the competition. That’s interesting, isn’t it?
Andrew Kligerman: Yes. Hey, thanks a lot. That was great insights.
J. Patrick Gallagher: Thanks, Andrew.
Operator: Thank you. And your next question comes from the line of Yaron Kinar with Jefferies. Please proceed with your question.
Yaron Kinar: Thank you, all. Good afternoon or good evening.
J. Patrick Gallagher: Hi, Yaron.
Yaron Kinar: First question I have, and forgive me it’s a bit nitpicky here, but in Brokerage organic, I know the organic came in-line with December guide. But I think contingents were a bit better than you were expecting. You were already accounting for the life case timing and the 606 accounting. So, it seems like there may have been something there that came in a little bit lighter than expectations? Or am I thinking about it incorrectly?
Douglas Howell: Maybe there’s $5 million less than we had hoped on a few of them. But it’s — I mean, when you’re looking at a $2 billion quarter, $5 million, it does move the percentage a little bit, but it doesn’t — it’s not a meaningful that we are a sales organization, I look back last year, we had 11% one quarter, we had 7% in another quarter. We had 9%, 7%, 8%. So, it bounces around a little bit. So the fact that we brought it in within a 0.5 point or what we’re looking at here, you do get some bounce around for a few million bucks here or there.
