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Brown & Brown Inc. reported its first-quarter revenue rose 23.4% to $1.116 billion, driven in part by continued rate increases.
Organic growth was 12.6%, as commissions and fees increased 22.5% to $1.108 billion, the Daytona Beach, Florida-based broker said in its earnings statement released Monday after markets closed.
Net income grew 6.9% to $235.5 million, as employee compensation and benefits rose 24.4% to $571.1 million.
The retail segment had 8.8% organic growth, as organic revenue rose to $618.2 million, Brown & Brown President and CEO J. Powell Brown said Tuesday on an earnings call with analysts. Organic revenue figures exclude the effect of foreign currency fluctuations and acquisitions.
The national programs segment had organic revenue growth of 33.8% to $200.5 million, while in the wholesale brokerage segment, organic growth was 7.0% to $104.3 million.
The segment growth was driven by new business, strong retention and continued rate increases, Mr. Brown said on the call.
“The insurance marketplace was very challenging for customers in the first quarter across most lines of business,” Mr. Brown said. Rate increases were similar to prior quarters, with admitted markets up 5% to 7% and the excess and surplus market up 10% to 20%, he said.
There were some exceptions to the trend, such as workers compensation, which continued to decline.
In many cases, customers are purchasing increased deductibles and decreasing overall limits, Mr. Brown said.
The areas that remain most challenging are excess and surplus property and excess liability, due to losses and increased insured values, Mr. Brown said. “Carriers continue to evaluate their coastal property portfolios,” he said.
The broker completed seven acquisitions during the first quarter, with estimated combined annual revenue of $11 million, according to Mr. Brown. He said the pace of M&A deals, especially those involving financial backers, had slowed.
The macroeconomic environment continues to pressure businesses, Mr. Brown said.
"Overall, business leaders are generally cautious about the future while managing the impacts of inflation and higher interest rates,” he said. “There has not been a material change in what we heard from our customers in the fourth quarter of 2022.”