Arthur J. Gallagher Adds Hogan Insurance To Its Portfolio

Arthur J. Gallagher & Co. (NYSE:AJG) announced the acquisition of Hogan Insurance Services, Inc. for an undisclosed amount to boost its Western Region brokerage operations.

Westlake Village, CA based Hogan Insurance Services (Hogan) was set up in 1994. The company operates as a retail insurance broker providing property/casualty, employee benefits, risk management and specialty wholesale insurance services for commercial clients throughout Southern California. The company specializes in workers compensation insurance mainly in transportation, automotive, manufacturing and trucking industries.

Hogan, with its client centric outlook, focuses on developing healthy client relationships, strong carrier partners, high-quality sales and services capabilities. This acquisition will be a strategic fit for the company as its global reach and specialization will complement its Western Region brokerage operations. Post acquisition, Hogan will continue to operate from its current location.

The Hogan deal marks the sixth takeover by Arthur J. in the second quarter of this year. The company recently acquired Hagan Newkirk Financial Services which provides insurance brokerage services and employees benefits consultation. Arthur J. Gallagher completed 11 acquisitions in the second quarter of last year with annualized revenues of over $82 million.

Arthur J. Gallagher, which currently carries a Zacks Rank #3 (Hold), is well known for strengthening its profile through frequent acquisitions in the brokerage space. The company's first-quarter earnings beat the Zacks Consensus Estimate by 17.2%. Brokerage segment revenues increased 12% year over year.

Companies in the insurance sector have been actively pursuing acquisitions for inorganic growth. Recently, Brown & Brown Inc. (NYSE:BRO) announced that the company had entered into a purchase agreement to acquire all operating assets of Morstan General Agency. Some better-ranked stocks to consider in the insurance sector are Alleghany Corp (NYSE:Y) with a Zacks Rank #1 (Strong Buy) and Hannover Rueckversicherung AG (OTC:HVRRY) with a Zacks Rank #2 (Buy).