NU Online News Service, Feb. 8, 1:45 p.m.EST

Brown & Brown, Inc. said its fourth quarter net incomeincreased 36 percent over the prior year despite organic growth incommission and fees dropping 3 percent during the same period.

The Daytona Beach, Fla.-based company reported fourth quarternet income rose $8.5 million to more than $32 million. Net incomeper share increased 5 cents to 22 cents a share. Revenues grew 7percent, or $16 million to $230 million.

For the year, net income rose 6 percent, or $8.5 million to $162million. Earnings per share was up 4 cents to $1.12. Revenues forthe year rose less than 1 percent, or $5 million, to $973million.

“Rates continue to be under pressure, but several areas of ourbusiness seem to be hitting bottom on exposure units and we arevery pleased with our acquisitions in Q4, closing $19.1 million inrevenue,” said J. Powell Brown, president and chief executiveofficer for the firm, during a conference call with financialanalysts.

The company said total commissions and fees increased 4.8percent, aided by acquisition activity. However, organically, thefirm is still suffering the ramifications of the soft market.

Mr. Brown described an overall landscape where rates continue tobe flat or down 5 percent. In some cases, prices are down as muchas 10 percent depending on the business.

In only a few areas he said rates showed signs of increase.Rates for employee benefits, small group accounts, are up 5 to 15percent and large group rates are up 5 to 20 percent.

Another area of upward pressure in pricing is financialinstitutions—directors and officers liability and errors andomissions—up 5-plus percent on accounts, except for accounts thathave experienced losses, which are seeing higher increases, Mr.Brown said.

Mr. Brown said on some accounts throughout the country, insurersare changing compensation from commission to per head per month.Certain national carriers, he noted, are changing their large groupcommissions to fees on a state by state basis.

Surplus lines remains challenging, as retail lines continue tocompete for business.

On the naming of Scott Penny as the firm's new chief acquisition officer, Mr. Brownsaid the company is pleased with him assuming the new post. Henoted that for the year, the firm completed more than $70 millionin acquisitions in 2010. So far, in 2011, Brown & Brown hascompleted close to $13 million in acquisition revenue.