NU Online News Service, April 19, 2:28 p.m.EDT

Daytona Beach, Fla.-basedinsurance broker Brown & Brown reports first-quarter net incomeincreased 5 percent, thanks in part to more than $30 million inacquired revenue for the quarter.

The firm says net income rose $2.1 million over the previousyear to more than $46 million. Earnings per share rose 1 cent to 32cents a share. Revenues increased 4 percent, or close to $10million, to $262 million.

While investment and other income saw declines, commission andfees rose 4 percent, or $11 million, to $261 million.

According to J. Powell Brown, president and CEO of Brown &Brown: “The market continues to be interesting. Some carriers arecontinuing to try to get rates on renewal. However, they aretypically not holding. No carrier wants to lose an account. Newbusiness continues to be priced aggressively, therefore there is agap between new-business pricing and renewal-business pricing.”

The firm has completed acquisitions worth $36.5 million inrevenue, he notes.

Powell describes a marketplace where, generally, rates are flator down slightly and not displaying wild decreases that brokershave experienced in the recent past. In some sections of thecountry—particularly the West—workers' compensation “continues tobe volatile,” showing signs of rate increases.

In answer to a question by a financial analyst during aconference call, Powell says catastrophe property is beginning tosee some rate pressure, but increases are not sticking. Thepressure on rates, he points out, has more to do with the new RiskManagement Services (RMS) catastrophe model than loss events inJapan, Australia and New Zealand.

Turning to the regional lines of business, Western retail hadthe largest increase in core commissions and fees at 12 percent,while Florida and national increased by single digits. However,organic growth was still on the negative side for retail business,coming in at negative-3 percent.

Wholesale brokerage was one bright spot, growing by 1 percentorganic. Powell attributes the growth there to the writing of newbusiness and a strong retention rate.

Overall, organic growth for the firm stood at negative-2percent.

Regarding the economy, Powell says clients are generallypredicting that their business will be flat to slightly down,belying a conservative outlook. He called the current middle-marketeconomy “fragile,” adding that people “are feeling a little better”but still remain cautious about the future.