US broker Gallagher has recorded higher earnings, as hardening rates cushioned the business from the economic disruption of COVID-19.

The business says net income in the fourth quarter rose to $US153.1 million ($200.7 million) from $US105.6 million ($138.4 million) a year earlier and overall net income for last year increased to $US858.1 million ($1.12 billion) from $US715.8 million ($938.3 million).

“We delivered another excellent quarter, and a fantastic full year during which we generated record profits,” President and CEO Patrick Gallagher said.

“Despite the pandemic and the resulting economic fall out, we executed on our long-term operating priorities: growing both organically and through acquisitions, improving both our productivity and quality, and still investing in our bedrock culture.

“We are operating in a property casualty environment where rates are up around 8% globally, terms and conditions are tightening, and capacity in certain lines is increasingly constrained.”

He sees no changes in the market conditions this year and says the broker is “seeing increased business activity, a recovering labour market, and a rebound in new arising risk management claims”.

“An environment of rising rates and growing exposure units provides a near-perfect opportunity for us to demonstrate that we provide the very best insurance, consulting and risk management advice for our clients,” Mr Gallagher said.

The brokerage division recorded net earnings of $US157.7 million ($206.7 million) in the fourth quarter, up from $US118.7 million ($155.6 million) a year earlier. For the risk management business, net earnings grew to $US19.1 million ($25 million) from $US18.3 million ($24 million).