Gallagher says it is planning to contract or furlough portions of its workforce as part of cost-cutting measures to limit the impact of the coronavirus pandemic as economic conditions deteriorate.

The firm is already eliminating discretionary spending, limiting use of temporary help and consultants and increasingly using “centres of excellence” as part of its response. Cost-cutting actions will likely affect less than 4% of its global workforce, it says.

Chairman and CEO Patrick Gallagher told a results briefing last week he was encouraged by the resiliency of the business through April, but deteriorating conditions will likely impact future financial performance.

“Accordingly, we are taking appropriate measures to make expense-based adjustments in a staged, contemplative manner over the coming months,” he said.

Mr Gallagher says the current situation is different to the 2008 and 2009 financial crisis when premiums were dropping at nearly double-digits.

“Rather, today rates continue to increase mid-to-high single digits and loss conditions could deteriorate over the next year or so leading to a difficult rate and conditions environment in certain lines,” he said.

Net profit for the first quarter was $US355.4 million ($553.6 million) compared with $US351.7 million ($547.8 million) a year earlier.

The company says there was an estimated $US42.2 million ($65.7 million) impact on revenues from COVID-19 in the period.

The firm says its brokerage operations have not seen meaningful changes to new business, lost business or renewal businesses, while risk management operations have seen a decline in new claims from retail, hospitality, restaurant and transportation clients.