Profits grow for local insurer
Apr 20, 2011
The following article was published in the Daytona Beach News Journal on April 20, 2011:
Profits Grow for Local Insurer
By Tom Knox
Brown & Brown Inc. has gotten off to a good start in 2011.
In the first quarter, the Daytona Beach-based insurance agency, which has offices throughout the country, generated increases in both net profits and revenues compared with the same quarter last year.
For the three month period that ended March 31, the company recorded a net profit of more than $46 million, or 32 cents per share, a nearly 5 percent increase over the $44 million in net profits, or 31 cents per share, it made in the first quarter of 2010.
Brown & Brown produced $262 million in revenues for the quarter, up from $252 million in the same period a year ago. Company officials credited much of the increase in revenues to a 4.3 percent year-over-year increase in commissions and fees.
Wall Street analysts had expected revenues of $267.4 million for the quarter that ended March 31, according to business wire service RTTNews.
Brown & Brown’s common stock shares are publicly traded on the New York Stock Exchange under the symbol BRO.
The company in the first quarter continued its push to grow in part through acquisitions of smaller insurance and employee-benefit agencies.
It has completed acquisitions worth $21.7 million in annualized revenue so far this year.
That number should rise by $14.8 million at the end of the month when its acquisition of First Horizon Insurance Group, a Tennessee-based insurer, is expected to close, said J. Powell Brown, Brown & Brown CEO, in a Tuesday conference call with stock analysts.
“We continue to see lots of activity in the acquisition space and are pleased with the new acquisitions and teammates that have joined us year-to-date,” Brown said.
Brown acknowledged that the company’s ability to organically grow its revenues through its ongoing operations, as opposed to acquiring other agencies, continues to be hampered by the shaky economy. “I was in California last week, and regular unleaded gas is $4.40 a gallon,” Brown said. “I think (the specter of) $5-a-gallon gas puts enormous pressure on the U.S. recovery.”
Brown, in the conference call, addressed the recent lawsuit his company filed against two former top executives, Tom Riley and Jim Henderson, whom it accuses of using confidential information to start their own rival business, Assured Agencies, in Lake Mary. That business lauinched with $250 million in private equity backing.