Despite positive premium growth and a handful of acquisitions, BB&T Insurance Services Inc. lost some ground in 2011, slipping to No. 8 in Business Insurance's annual rankings of the nation's largest insurance brokers from the No. 7 spot it held last year.

Gross revenues increased by 0.4% for the Raleigh, N.C.-based bank-owned insurance broker to $1.17 billion in 2011.

Still, Daytona Beach, Fla.-based Brown & Brown Inc.'s 2011 brokerage buying spree, along with increases in coastal property insurance rates, pushed it ahead of BB&T in the BI rankings for the first time.

Brown & Brown made 17 acquisitions during 2011 vs. BB&T's three: Atlantic Risk Management Corp., a commercial property/casualty and employee benefits broker with expertise in construction surety and telecommunications based in Columbia, Md.; The Precept Group Inc., an employee benefits consultant and actuarial firm based in San Ramon, Calif.; and Liberty Benefits Inc., a San Jose, Calif.-based employee benefits broker.

But BB&T's $570 million acquisition of The Crump Group, which closed in April, could turn things around for next year, especially if predictions of market firming come to fruition, according to industry sources.

“Margins are tougher in the wholesale business,” said Timothy J. Cunningham, a partner at Chicago-based OPTIS Partners L.L.C., a financial and management consulting firm serving the insurance distribution industry. “They have been affected more than retail,” he said. As a result, “BB&T was able to buy Crump at a very reasonable price. It was private equity-owned and purchased for a big premium. It had a seller looking for an exit.”

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BB&T also has the infrastructure in place to handle the acquisition, he said. “They were able to bolt it onto CRC Insurance Services Inc.,” BB&T's wholesale unit, Mr. Cunningham said, who predicted it could give BB&T a financial boost if the property/casualty insurance market hardens.

“That is a segment of the business that will be rewarded when the market turns to a greater degree than on the retail side,” he said.

Perhaps helping to smooth the integration, CRC resolved its dispute over the defection of 120 employees who left to join Chicago-based Ryan Specialty Group Inc. in May 2010. Both wholesale brokerages had filed lawsuits against each other over departing workers' employment contracts. As a result of the settlement announced this year, the pending lawsuits will be dismissed with prejudice, the firms said in a statement.

H. Wade Reece, chairman and CEO of BB&T, said he already is seeing “accounts written in the standard market moving back to the (excess and surplus lines) world that historically had been written in that market.”

Moreover, organic growth is up 6.5% in the first quarter of 2012 vs. 0.8% for the same period in 2011, he said.

“About half is price and half from new business,” Mr. Reece said.

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While Mr. Reece said he wouldn't go so far as to say the property/casualty insurance market is definitely firming, “I would call it transitional. I don't think it's a traditional hard market that we've had in the past. Prices are clearly going up with certain risks and in certain segments. There are a lot of things that are forcing rate changes: weather losses, investment income down, early spring storms with ice and hail, various earthquakes, tsunamis. It's clearly moving toward more underwriting discipline, more stabilization in prices, but it's not where everything's going up by 20%.”

Further growth could come from the benefit side of BB&T's business with the acquisition of The Precept Group, which provides health risk management consulting services to self-funded midsize and large employers, according to Mr. Reece. “They were a competitor of ours in California, so we knew them and knew they were very progressive. They have a large third-party administrator, ERISA attorneys, doctors and medical staff and a large actuarial group that goes in and studies risk. Doctors work with the actuarial folks to pinpoint problem areas, such as diabetes, to improve employee health. It's a very targeted approach to health risk management,” Mr. Reece said. “We're looking to expand that platform across the country” to help middle-market and large employers drive health benefits costs down, he said.

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“When you think about all the changes that have come about in the landscape with health care reform, what they do is progressively compatible with the future landscape,” Mr. Reece said.

“It's not that we're ignoring or moving away from the smaller employer groups. But from a resource standpoint, we're beefing up our consultative services for middle-market and large employers,” he said.

BB&T also is banking on its new online personal lines sales tool to grow its business, especially among younger insurance buyers who are more comfortable with the use of technology, according to Mr. Reece. This month, BB&T added flood insurance to its menu of offerings available via its Internet portal.