Brown & Brown sees property rates under pressure, reports growth

Property catastrophe insurance rates, which fell 15% to 30% in the third quarter, will likely continue to fall for the rest of the year, and the declines could accelerate toward year-end if there are no significant catastrophe losses, Brown & Brown’s top executive said Tuesday.

Insurers with underutilized capacity in December may become more aggressive, J. Powell Brown, president and CEO of the brokerage, said during its third-quarter results call with analysts.

“I’m not aware of any markets teeing up the blue-light special yet, but I’m just telling you that that’s a possibility,” Mr. Brown said.

Overall, admitted property/casualty rates in the fourth quarter will likely be similar to the third quarter, with casualty and auto rates continuing to increase, and admitted property “will continue to be very competitively priced,” he said.

In excess and surplus lines, casualty risks will face further increases and constricted limits, he said.

Brown & Brown reported $1.61 billion in revenue for the third quarter, a 35.4% increase over the same period last year. On an organic basis, excluding the effects of acquisitions and foreign currency fluctuations, revenue rose 3.5%, the company said.

The brokerage completed its $9.83 billion purchase of Accession Risk Management Group on Aug. 1.

In Brown & Brown’s retail sector, organic growth was 2.7%. In specialty, which includes its wholesale and program business, it was 4.6%.

Net income fell 4.3% to $227 million. Adjusted earnings before interest, taxes, depreciation, amortization and coronavirus increased 41.8% to $587 million.

Steve Hearn has taken a broader leadership role, following the announcement last week that Barrett Brown, Mr. Brown’s brother, has taken a leave of absence.

“I ask that everyone respect his privacy. When he is ready to return to the company, I look forward to welcoming him back,” Mr. Brown said.