Hilb Rogal Reports Quarterly Net Up 65%
By Mark E. Ruquet
NU Online News Service, Feb. 14, 3:15 p.m.?Hilb, Rogal and Hamilton management said today they are aiming for 15 percent annual growth for 2002 and that reported net income rose 65 percent over last year for the fourth quarter.
In a financial analyst’s conference call today, executives with the middle market insurance brokerage firm said they are continuing to look at growing the business through sales and acquisition, but not at the expense of their clients.
The firm reported for the fourth quarter ending Dec. 31, 2001, that net income rose $2.85 million from $4.3 million in 2000 to $7.1 million for 2001. Fourth-quarter earnings per share rose 53 percent, going from 15 cents per share in 2000 to 23 cents per share for 2001.
On Feb. 12, the firm announced a quarterly cash dividend of 8.75 cents per share to be paid on March 29 to shareholders of record as of March 15.
Fourth-quarter revenues rose 30 percent from $67.1 million in 2000 to $87 million in 2001.
Andrew L. Rogal, HRH’s chairman and chief executive officer said the firm plans to spend $5 million on internal growth that would include the creation of new positions for specialty markets, insurance company negotiations, claims and loss control professionals.
He said the firm is getting some good business out of its year-old insurance relationship with PNC Bank that is limited to Pennsylvania and New Jersey. Mr. Rogal said he remains optimistic about the future relationship, but it would take three to four years before the business matures. He said the firm is not looking at pursuing any similar business relationships at this time.
Martin L. Vaughn, III, HRH’s president and chief operating officer, said while insurers have increased rates, the firm has worked with clients to minimize increases. He said the firm has worked to find reductions in unnecessary coverage that was affordable during the soft-market.
“Clients need us more now than they needed us a year ago,” Mr. Rogal added.
Mr. Vaughn said he has “not seen a broad trend” by the carriers to reduce commission, though the bigger insurance brokers might because they negotiate commissions on a risk by risk basis. He said one property-casualty insurer has announced it would reduce commissions, but he declined to name the company.
Mr. Rogal said the percentage of commissions would not drive the firm’s decisions on insurance placement, but “would move our business where the customer is best served.”