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Brown & Brown revenue up 2.5% in third quarter

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Brokerage Brown & Brown Inc. saw a bump in revenue for the third quarter of 2015, though net income slipped as expenses increased for the quarter.

Third-quarter revenue rose 2.6% over the prior-year quarter to $432.2 million, while net income slipped 1.0% to $67.5 million, the Daytona Beach, Florida-based company said in its earnings statement released after markets Monday.

Expenses for the quarter were up 3.4% over the third quarter of 2014 to $319.3 million, including a 4.0% increase in employee compensation and benefits to $211.3 million.

The company saw organic growth of 2.4% in the quarter, according to the statement.

Speaking on a Tuesday morning earnings call, CEO J. Powell Brown said that each of the company’s four divisions delivered organic growth during the third quarter.

The retail segment saw 1.2% organic growth; national programs, 1.6%; wholesale brokerage, 5.9%; and services, 8.6%.

During the third quarter, a lack of weather-related events continued to pressure rates downward, said Mr. Brown, with admitted market rates generally flat to down 5%, except for commercial auto, which was flat to up 5%, he said.

For the nine months ended Sept. 30, revenue rose 6.2% to $1.26 billion, and net income rose 1.7% to $185.5 million.

Nine-month expenses rose 7.6% to $948.3 million including a 7.6% increase in employee benefits and compensation to $628.1 million.

Acquisitions will continue to play a part in the brokerage’s growth, Mr. Brown said.

“The pipeline continues to be good” for acquisitions, said Mr. Brown on the call, but the company would exercise discipline in order to not overpay, he said.