AJG said its management services revenue grew by 11 percent. Financial services, which in the 2003 first quarter was hurt by the exit from investments and related financial write-offs sustaining a loss of $16 million, returned to profitability reporting net earnings of $2 million.

"We are excited about the quarter and believe we can have an outstanding year," said J. Patrick Gallagher Jr., president and chief executive officer, during an investor analyst's conference call held today. "But we realize one quarter doesn't make a year and we are working very, very hard."

Doug Howell, AJG's chief financial officer, cautioned that related to financial services, the firm expects to break even by the end of the year.

In answer to several questions about the New York State Attorney General's Office investigation of broker contingency fees, Mr. Gallagher said the firm is not among those that have received a subpoena. He said that in March the New York State Department of Insurance asked the firm about contingency fees, and information was supplied to the department.

He added that the acquisition pipeline is very strong, the firm's margins improved in the quarter, new business activity is very strong. He said he was pleased with the first quarter and "looking forward to building on for a really great year."