NU Online News Service, Feb. 17, 10:26 a.m.EST

Citing the effects of the recession and continued soft marketconditions, Daytona Beach, Fla.-based insurance broker Brown &Brown Inc. reported net income in the fourth quarter dropped 29percent.

During a conference call yesterday with financial analysts, J.Powell Brown, president and chief executive officer of Brown &Brown, said this was the first time in the history of the firm thatit did not grow its top and bottom line.

He described an insurance market that remains extremelycompetitive where premium prices are primarily down and at bestflat, affecting commissions.

Generally, while insurers are posting positive gains, premiumprices are down between 4- and 8 percent compared to the fourthquarter of 2008, Mr. Brown said.

Insurers, as well as the broker, he noted, are also beingimpacted by the shrinkage in insured risks primarily caused by theeconomic downturn.

Mr. Brown said in 2009 "there was a downdraft, as you cantell."

Fourth-quarter net income dropped $9.7 million to close to $24million. Net income per share dropped from 24 cents a share in 2008to 17 cents a share. Revenues dropped 8 percent, or $18 million, to$214 million.

For the year, net income was down 8 percent, or $13 million, to$153 million. Net income per share stood at $1.08, down from $1.17from the same period in 2008. Revenues dropped 1 percent, or closeto $10 million, to $968 million.

Organic growth overall in the quarter came in at negative 8.3percent. The sharpest drops were in Florida retail (negative 10percent), Western retail (negative 14 percent) and specialprograms, which stood at negative 11 percent.

When asked where he saw future performance for the firm in lightof current economic conditions, Mr. Brown said, "If you believewhat you read and hear about the economic outlook, it appearsflattish. How that translates into our business, we don'tknow."

Cory Walker, chief financial officer, noted that one of themajor hits the broker took in the fourth quarter was in commissionsand fees, which reduced contingent commissions by more than $4.4million. The company also took hits to its investment income andother income.

Brown & Brown Vice Chairman and Chief Operating Officer JimW. Henderson noted that one of the company's major revenue drivers,acquisitions, may see a boost in 2010 as more acquisition targetshave begun discussions with the firm in light of improved prospectsand stability in revenues and future tax changes.

Brown & Brown's shares closed for the day down $1.14, or6.44 percent, to $16.56 a share.