Dayton Beach, Fla.-based insurance broker Brown & Brown Inc. reported second-quarter net income fell 22 percent and organic growth dropped 8 percent as declining prices continued to take a toll on earnings.
For the quarter, the broker reported net income decreased by $12 million, to $40 million, compared with the period last year.
That translated into an 8 cent loss in earnings per share to 29 cents a share, missing analyst's consensus estimates by 1 cent.
The company reported across-the-board decreases in earnings in all segments of the business. The only exception, said J. Hyatt Brown, chairman and chief executive officer, was in employee benefits, which increased during the period.
During a question and answer period with analysts Mr. Brown said they were surprised by the drop in organic growth and put the blame squarely on the economic downturn in Florida, where the firm has a significant amount of business. Organic growth in Florida dropped almost 16 percent.
While pricing is expected to continue to remain soft through the rest of this year, next year may prove to be a "more favorable situation" said Mr. Brown.
Trying to compare the current economy of the insurance market against the past, Mr. Brown said it is difficult to make comparisons because these has never been a time when the economy was hit with a triple punch of housing downturn, dramatically rising energy prices and premium pricing drop in property led by the state through its residual insurer Citizens.
"That has never before happened and we are weathering the storm pretty well, but I tell you, it ain't fun," said Mr. Brown.
He said the broker will continue to pursue new business and invest in new people, adding that "we view the current economy as beneficial for us" from a recruiting standpoint.
Revenues in the quarter declined 2 percent, or $5 million, to $242 million. While investment income and other income saw dramatic declines, commissions and fees rose 4 percent, or $8 million, to $239 million.
Excluding the $10 million the company received for the sale of Rock-Tenn, in the second quarter of 2007, earnings per share loss would have only been 4 cents a share, the company said.
For the six months, net income fell close to 18 percent, or $20 million, to $92 million. This translated into a 14 cent drop in earnings per share to 65 cents a share.
Revenues on a year-to-year basis dropped more than 1 percent, or $7 million, to $498 million. Commission and fees for the six months increased more than 3 percent, or $16 million, to $492 million.
Brown & Brown reported it made 13 acquisitions in the second quarter representing $47.5 million in estimated annualized revenues. For the six months, the firm said it has closed 25 transactions with estimated annualized revenues of $79 million.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.