Arthur J. Gallagher & Co. announced that a contract for the administration of workers’ compensation claims between its subsidiary, Gallagher Bassett Services, and the New South Wales Workers Compensation Scheme in Australia will move to run-off status on December 31, 2014.
Gallagher Bassett has been one of seven vendors providing claims services for employers in New South Wales. As a result of a recent tender process, the two non-insurers, including Gallagher Bassett, were moved into run-off status. Gallagher Bassett’s other workers’ compensation business in Australia is unaffected by this announcement.
Gallagher expects to take a charge in its Risk Management segment in fourth quarter 2014 of approximately $8.0 million after taxes (approximately $.05 per share), substantially all of which relates to a non-cash impairment of capitalized software dedicated to the New South Wales contract.
Gallagher estimates that it will break even on this contract in 2015 during the run-off period.
Source: Arthur J. Gallagher & Co.
Was this article valuable?
Here are more articles you may enjoy.