Brown & Brown quarterly revenue up, profit down

Brown & Brown Inc. reported fourth-quarter revenue of $1.18 billion, a 15.4% increase from the year-earlier period, with organic revenue rising 13.8%.

Commissions and fees increased 15.4%, and investment income rose 22% to $22 million. The brokerage’s fourth-quarter profit fell 21.9% to $210 million, due to the impact of prior-year gains on business disposals.

“Across the board, it was a very strong quarter,” J. Powell Brown, chairman, president and CEO of the Daytona Beach, Florida-based brokerage said on an earnings call with analysts Tuesday. The brokerage posted its quarterly results late Monday after markets closed.

Results were driven by acquisition activity, higher contingent commissions and net new business, the brokerage said.

Mr. Brown said estimated losses from the California wildfires are “significant” and that there could be impacts on pricing for both admitted and nonadmitted property in the state. There could be a “massive expansion in the E&S market in that area,” he said.

Rate increases for most lines continue but are moderating downward, except for ongoing upward pressure on auto and casualty, he said.

Going forward, in excess and surplus lines, catastrophe property rates will likely continue to decrease similar to the fourth quarter, Mr. Brown said. Catastrophe property rates were down 10% to 20% on average in the quarter, and more customers saw closer to 20% rate decreases or more, he said.

“Rate changes for individual lines of business generally will not materially impact the total results for our company,” Mr. Brown said.

Across Brown & Brown’s three business segments, retail organic growth for the fourth quarter was 4.4%, national programs grew by 38.6%, and wholesale was up 7.1%.

The brokerage completed 32 acquisitions in 2024, adding total annual revenue of $174 million.

“Competition remains fierce for high-quality businesses and we’re starting to see more activity from financial sponsors for small and mid-size deals as interest rates are beginning to decrease,” Mr. Brown said.

For the full year, Brown & Brown reported revenue of $4.8 billion, a 12.9% increase over 2023, with organic revenue growth of 10.4%. Net income rose 14% to $993 million.

The brokerage expects its contingent commissions for 2025 will be down slightly from 2024. “The unknown variables are the potential impact of the California wildfires and the Atlantic hurricane season,” Chief Financial Officer Andrew Watts said.