Brown & Brown Inc. posted fourth-quarter revenue of $738.5 million, a 15% increase annually, and organic revenue growth of 9.0%, the broker reported late Monday after the markets closed.
For all 2022, the broker topped $3 billion in annual revenue for the first time.
Fourth-quarter net income rose 4.5% to $101.7 million, and commissions and fees rose 15.3% to $737.9 million,
Admitted market rate increases averaged 3% to 8% across most lines, while excess and surplus markets saw increases of 10% to 20% on average, J. Powell Brown, president and CEO, said during the broker's Tuesday morning earnings call.
A mixture of start up business, good retention and rate increases drove growth across the broker's business units, Mr. Brown said. The retail segment had organic development of 9.5%; national programs saw organic growth of 10.4%; and also the wholesale unit had organic development of 8.3%.
Retail segment revenue rose 19.1% to $420.5 million; the national program unit saw revenue growth of 12.6% to $179.6 million; and revenue rose 12.4% in the wholesale brokerage unit to $95.5 million.
The broker also continued to grow through acquisition, completing eight deals within the fourth quarter, adding combined annual revenue of $67 million.
Business confidence is constantly on the improve, Mr. Brown said, however the omicron variant of COVID 19 presents “another hurdle in the overall growth of the economy.” He also cited inflation, logistics constraints and the “availability of employees” as problems that could dent business confidence and hamper recovery.
Placements for cyber liability continue to be difficult, and rates and deductibles have raised “dramatically” in many cases, Mr. Brown said. Customers with high losses also faced some challenges, he said.
“Customers continue to modify risk management programs to best control premium increases,” Mr. Brown said.
Looking forward, he suggested pricing pressures might abate soon. “We anticipate premium increases to remain relatively constant or moderate downward slightly within the first 1 / 2 of 2022,” he explained around the call.
For the entire year, Brown & Brown reported record revenue of $3.051 billion, up 16.6% from 2022. Organic growth for 2022 was 10.4%, the brokerage's highest “since the early 2000s,” Mr. Brown said.
Commissions and costs rose 17% this past year to $3.0475 billion.
The retail segment had organic development of 11.0%; national programs grew 12.4% organically; and wholesale brokerage saw 8.1% organic growth.
Brown & Brown completed 19 acquisitions in 2022, representing combined annual revenue of $132 million.
Mr. Brown forecast the mergers and acquisitions market will stay competitive until rates of interest climb. “Until rates of interest increase materially and capital becomes constrained, we expect competition and valuation to remain at peak levels,” he explained.
