Brown & Brown revenue up 7.8% in first quarter

Brown & Brown Inc. reported first-quarter 2018 revenue of $501.5 million, up 7.8% from the first quarter of 2017, the broker said in a statement Monday night.

Net income increased 29.5% to $90.8 million in part because the Daytona Beach, Florida-based brokerage benefited from a lower effective tax rate due to tax reform, J. Powell Brown, president and CEO, said in a statement.

Brown & Brown’s organic revenue increased 5.7%.

During a conference call Tuesday with analysts, Mr. Brown discussed the current economy and rates.

“From an economic standpoint, we continue to see expansion across most geographies and industries,” he said. “Customers feel better about their prospects going forward and are investing in their businesses. Construction projects big and small are popping up in most communities around the country and companies are hiring.”

Regarding rates, Mr. Brown said, “they’re generally flat to up slightly, excluding automobile and some coastal properties.”

Commercial and personal auto continue to increase the most, with rates up 5% to 10%. Mr. Brown said “many of the carriers’ auto books are running hot, and they’ve been trying to close the gap with rate increases.”

Rate increases for employee benefits continue to rise, Mr. Brown said, with small groups of under 50 typically seeing the highest rate increases, 5% to 15%.

“At the end of the day, there’s still a tremendous amount of capital in the market chasing a finite number of risks,” he said. “We would not be surprised to see rates moderate down a bit further in the second quarter and into storm season this summer.”