NU Online News Service, April 19, 1:24 p.m. EDT
Daytona Beach, Fla.-based insurance broker Brown & Brown says first quarter net income rose 7 percent over last year as the firm reported increases in commissions and fees and benefited from a one-time court settlement.
Brown & Brown reports first quarter 2012 net income rose close to 7 percent, or $3 million, to $49 million. That translates into earnings per share of 34 cents, up 2 cents from the same period last year. Revenues increased 15 percent, or $40 million, to $302 million.
J. Hyatt Brown, chairman, acting president and chief executive officer calls the results “better than anticipated” in a statement.
One positive sign of improvement was the rise in organic growth rate in commissions and fee revenue by close to 1 percent.
Except for the broker’s retail segment, all other segments showed growth ranging from more than 5 percent in wholesale brokerage and services to less than 1 percent in its retail business.
During a conference call with investment analysts on Tuesday, Brown described a marketplace of overall increase in premium prices throughout the country, with only a few geographic locations showing rates flat or going down in specific markets.
Property is moving up 5-25 percent in the wholesale side of the business for coastal property exposures as the RMS Version 11 model continues to influence probably maximum loss estimates upward.
Workers compensation is also on the increase throughout much of the country with little exception, he says.
He notes that on the personal insurance side, which accounts for a substantial amount of the firm’s business, the market is seeing increases. Homeowners is moving up 2-5 percent depending on the region of the country, says Brown. Auto, however, is flat to down, again depending on the region of the country.
Making a general observation, he says that “for the first time there is consistent and constant pressure in many areas of the U.S. to increase property rates and, consistently, workers compensation is going up."
He says the firm is becoming more confident about an upturn in the market as insurers appear to be sticking to increasing rates slowly and the economy shows signs of improvement.
Brown also says that J. Powell Brown, president and CEO will be returning to the office this week after stepping down temporarily for health reasons in January.
Hyatt Brown says he expects Powell Brown to resume his duties soon.