What is their sg and a as percentage of revenue ?
For insurance brokers, "SG&A" isn't typically reported as a single line item. Instead, it is broken down into Employee Compensation & Benefits and Other Operating Expenses. Together, these represent the total operating overhead (the equivalent of SG&A).
Because GAAP figures can be distorted by heavy acquisition amortization, the industry standard way to compare overhead efficiency is by looking at Adjusted EBITDAC (Earnings Before Interest, Taxes, Depreciation, Amortization, and Change in earn-outs).
Based on their full-year 2025 financial results, here is how their operating expenses stack up as a percentage of revenue:
Brown & Brown (BRO) FY 2025
BRO operates with exceptional efficiency. For the full year 2025, they generated $5.90 billion in revenue with the following expense breakdown:
- Employee Compensation & Benefits: $2.94 billion (~49.8% of revenue)
- Other Operating Expenses: $0.96 billion (~16.2% of revenue)
- Total GAAP Operating Expenses (SG&A equivalent): ~66.0% of revenue
When adjusting for one-time acquisition and integration costs, BRO's Adjusted EBITDAC margin was 35.9%. This means their normalized operating expenses consumed only 64.1% of their revenue.
Arthur J. Gallagher (AJG) FY 2025
AJG requires a larger corporate infrastructure to support its massive global footprint and third-party claims business (Gallagher Bassett).
- **Adjusted EBITDAC Margin:**30.8%
- This implies AJG's normalized operating expenses consume roughly 69.2% of their revenue.
(Note: While some financial data aggregators may list AJG's raw SG&A lower—around 56%—this is often due to how automated scrapers misclassify the heavy labor costs associated with Gallagher Bassett's claims administration. The EBITDAC margin provides the true apples-to-apples comparison).
The Efficiency Gap
| Metric (FY 2025) | Brown & Brown (BRO) | Arthur J. Gallagher (AJG) |
|---|---|---|
| Adjusted EBITDAC Margin | 35.9% | 30.8% |
| Implied Operating Expenses | ~64.1% | ~69.2% |
| Efficiency Advantage | +510 basis points | — |
That ~500 basis point advantage is exactly why BRO converts more of every revenue dollar into free cash flow. BRO's lean, decentralized model and focus on high-margin Wholesale/MGA business fundamentally requires less overhead than AJG's massive retail and claims operation.