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Brown & Brown Inc. posted revenue of $575.2 million for the second quarter of 2019, up 21.6% over the same period last year, as the brokerage completed more acquisitions and reported 3.9% organic growth across all operations.
Organic growth in the broker’s retail segment was “strong” at 5.6%, said J. Powell Brown, president and CEO of the Daytona Beach-based brokerage on a conference call with analysts Tuesday.
In addition, Brown & Brown completed four acquisitions during the quarter.
Most lines of business in the retail segment grew through a combination of new business activity, retention of business, increases in insured values and rate increases in certain lines of business, Mr. Brown said.
Brown & Brown’s national programs segment saw 2% organic growth as earthquake and all-risk programs performed well, Mr. Brown said. Challenges remain, however, in the brokerage’s commercial and personal auto programs “as our carrier partners are evaluating returns and their appetite,” Mr. Brown said.
The wholesale brokerage segment had another “great” quarter, Mr. Brown said, with 7% organic growth primarily driven by new business, good retention and some rate increases in certain lines, Mr. Brown said.
Organic growth at Brown & Brown’s services sector slipped 4.1%, hit by lower claims, Mr. Brown said.
Second-quarter net income rose 25.3% to $92.6 million, the brokerage reported in its earnings statement .
Revenue for the six months ended June 30 rose 22.6% to $ 1.194 billion as commissions and fees grew 22.4%. Six-month net income was up 25.4%, to $206.5 million, the statement said.
Mr. Brown said the brokerage remains “very optimistic” about the economy and expects the market to continue to rise.
“Based upon what we’re seeing right now, we would expect most rates to continue to increase slightly, but competition will remain strong for accounts with low losses,” he said.
Brown & Brown also remains bullish on acquisitions, and the firm’s acquisition pipeline remains “full” after closing 12 deals in the first half of 2019 with annualized revenues of $50 million, Mr. Brown said.
The challenge, he said, is competition from private equity buyers, which are “willing to pay materially more than we are” in some instances. He said Brown & Brown will “maintain our disciplined M&A approach.”