NU Online News Service, April 21, 3:33 p.m.EDT

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Despite a premium price increase push by insurers, rates remaincompetitive, especially for new accounts with good risk profiles,the chief executive of Brown & Brown said as the firm reporteda 7 percent first-quarter decrease in net income.

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During a financial analyst's conference call today, J. HyattBrown, chief executive officer of the insurance brokerage firm,said, "Everyone talks about how things are going to change nextweek or next month, but we think it probably won't be until 2010before that happens."

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He said there is a second part to rate increases in this currenteconomic environment and that is what buyers' reaction will be inresponse to a premium increase. Mr. Brown said he expects they willbuy less insurance.

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"There's only a certain amount of dollars that they can affordto spend," he said. "Rate increase does not mean there will be arobust increase in the brokerage revenues."

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J. Powell Brown, president of Brown & Brown described aninsurance environment nationally that continued to see premiumrates that are flat to down. He described very few lines thatexhibited any signs of premium increases anywhere throughout thecountry.

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Jim W. Henderson, vice chairman and chief operating officer,discussing the wholesale market said that coastal risks or thoserisks that have experienced losses are witnessing some increases,but for most other accounts rates remain competitive.

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In response to a question about Citizens, Florida'sstate-sponsored insurer of last resort, Hyatt Brown said there areseveral bills working their way through the state legislature todeal with funding the insurance program.

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Ultimately, he said, legislators are coming to the reality thatrates will have to be allowed to rise in order to deal with theprogram's exposure to catastrophe. They could allow for thoseincreases sometime in 2010, he estimated.

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Regarding the broker's financial performance so far this year,the Daytona Beach, Fla.-based insurance broker reported net incomedropped 7 percent, or $3.7 million, from the same period lastyear.

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Net income dropped from $52 million, or 37 cents a share, to $48million, or 34 cents a share. Revenues during the period increased3 percent, or $7 million, from $257 million to $264 million.

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Much of the revenue increase was helped by acquisition, asorganic growth came in at negative 2.2 percent. Commission and feesfor the quarter rose 4 percent, or $10 million, to $264million.

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