Brown & Brown reports higher revenue in flat market

Brown & Brown Inc.’s revenue increased to $473.1 million in the second quarter of 2018, up 1.5% compared with the same period last year, but excluding the effect of new revenue reporting rules affecting brokers this year, revenue increased 7.3%, the Daytona Beach, Florida-based brokerage reported Monday.

The acquisitive broker bought six brokerage firms representing $39 million in annual revenue in the second quarter, said J. Powell Brown, president and CEO on a conference call with analysts Tuesday, but still reported organic growth of 5.2%.

Across its four business segments, Brown & Brown’s retail business reported 4.3% organic growth, national programs reported 6.4%, wholesale reported 5.3%, and services reported 7.1%, although that segment saw declines in claims processing revenue as there were fewer spring weather-related events this year than in 2017, Mr. Brown said.

The revenue increases were achieved despite flat rates in most sectors, including catastrophe-exposed property insurance, he said.

“Cat property rates are flattish with some downward pressure on the best accounts and upward pressure on those with bad loss experience. Carriers don’t want to lose renewals but are willing to walk away from them,” said Mr. Brown.

Brown & Brown reported net income of $73.9 million for the second quarter, up 11.8% compared with the same period last year.