HRH Brokerage Plans New Business Push For ?04

By Mark E. Ruquet

NU Online News Service, Feb. 12, 12:10 a.m. EST?Hilb Rogal & Hobbs brokerage reported net income increased 19 percent in the fourth quarter, primarily on an 11 percent increase in commissions and fees.[@@]

For the fourth quarter ending Dec. 31, 2003, net income increase $3.2 million, going from $16.2 million, or 48 cents a share, to $19.4 million, or 53 cents a share. Revenues increased 11 percent, or $14 million, going from $129 million to $143 million.

Revenue from commission and fees in the fourth quarter increased $14 million, from $127 million to $140 million.

Martin L. "Mell" Vaughan, chairman and chief executive officer for the Richmond, Va.-based insurance brokerage, said the firm experienced some capping of commission by a few carriers to keep that side of their expenses flat. In order to keep growing, the firm relied on selling more fee services and consulting to keep revenues on the upswing, he said.

For the future, the firm said its plans for growth will rely on new business and selling more products rather than premium rate increases.

"Our view of the market is a little fuzzy," said Mr. Vaughan. "We are just not sure what underwriters are doing or where they are going."

He said the integration of Hobbs, which involved 495 people, would be completed in the first quarter of this year. Hobbs, which dramatically expanded the firm's geographic spread and brought it more high-end clients, was announced in May of 2002. The deal was reported to be worth more than $240 million.

In September, the firm changed its name from Hilb, Rogal, and Hamilton to Hilb Rogal & Hobbs, reflecting changes in the business.

For the year of 2003, HRH saw net income rise 15 percent, or $9.8 million, going from $65 million, or $2.01 a share, to $75 million, or $2.06 a share. Revenues rose 25 percent, or $111 million, going from $453 million to $564 million.

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HRH Brokerage Plans New Business Push For ?04

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