Brown & Brown posts higher revenue, profit as rate increases moderate

Brown & Brown Inc.’s third-quarter revenue rose 11% to $1.186 billion, as organic revenue grew 9.5%, as rate increases continued to moderate in many lines.

Net income rose 31% year-over-year to $317 million as investment income rose 82.3% to $31 million, according to the broker’s earnings statement released Monday after markets closed.

Revenue in the broker’s retail segment increased 6.5% to $641 million, with 3.9% organic growth, J. Powell Brown, president and CEO, said during a Tuesday morning earnings call.

The programs segment saw a 15.7% increase in revenue to $353 million, with 22.8% organic growth; revenue in the wholesale segment rose 14% to $171 million, with 8.4% organic growth, Mr. Brown said.

The broker completed four acquisitions in the third quarter with estimated combined annual revenue of $8 million, he said.

From a pricing standpoint, “rates for many lines continue to increase, but at a slightly slower pace versus what we experienced in the first half of this year and the third quarter of last year,” Mr. Brown said on the call.

Rates in admitted property/casualty markets were up 2% to 7% in most lines, he said, adding, “We expect this range to continue over the coming quarters.”

In casualty markets, he said, “We continue to see rate increases for primary layers due to the ongoing size of legal judgments in the U.S. and, to a lesser extent, higher levels of inflation, consistent with the last few quarters.”