Property-and-casualty insurance brokers were given a continued“stable” outlook from Fitch Ratings, as revenue and earnings growthin 2012 is forecast to match or exceed levels recorded during thefirst nine months of 2011.

In a five-page report reviewing five publicly traded nationalinsurance-brokerage firms, Fitch says that despite premium gainsaiding top-line growth, brokers’ revenues are expected to be“modest due to a flat rate environment” in the commercial-insurancemarket.

In the rating service’s review of insurance brokers Aon, ArthurJ. Gallagher (AJG), Brown & Brown, Marsh & McLennan (MMC)and Willis, average operating income increased for the group tojust over $600 million in the first nine months of 2011—fromslightly less than $600 million during the same period in 2010.

The increase, Fitch says, was primarily on the strength ofhigher earnings at MMC and at Aon from its acquisition of HewittAssociates.

Willis’ results were negatively affected by debt-repurchaseexpenses and its 2011 operational review, which led to a $130million charge.

For AJG and Brown & Brown, operating income was essentiallyunchanged.

Acquisition activity increased, Fitch says, with the number oftransactions through October 2011 equaling all of 2010 andsurpassing all of 2009.

“Fitch expects overall revenue growth to continue to be drivenby mergers and acquisitions, as a ready supply of smaller firms canprovide a source of new revenue for larger firms,” says Fitch.

A pending change in the capital-gains tax rate for 2013 couldcompel agencies to do more deals next year, Fitch adds.