NU Online News Service, April 19, 2:28 p.m. EDT

Daytona Beach, Fla.-based insurance broker Brown & Brown reports first-quarter net income increased 5 percent, thanks in part to more than $30 million in acquired revenue for the quarter.  

The firm says net income rose $2.1 million over the previous year to more than $46 million. Earnings per share rose 1 cent to 32 cents a share. Revenues increased 4 percent, or close to $10 million, to $262 million.

While investment and other income saw declines, commission and fees rose 4 percent, or $11 million, to $261 million.

According to J. Powell Brown, president and CEO of Brown & Brown: “The market continues to be interesting. Some carriers are continuing to try to get rates on renewal. However, they are typically not holding. No carrier wants to lose an account. New business continues to be priced aggressively, therefore there is a gap between new-business pricing and renewal-business pricing.”

The firm has completed acquisitions worth $36.5 million in revenue, he notes.

Powell describes a marketplace where, generally, rates are flat or down slightly and not displaying wild decreases that brokers have experienced in the recent past. In some sections of the country—particularly the West—workers' compensation “continues to be volatile,” showing signs of rate increases.

In answer to a question by a financial analyst during a conference call, Powell says catastrophe property is beginning to see some rate pressure, but increases are not sticking. The pressure on rates, he points out, has more to do with the new Risk Management Services (RMS) catastrophe model than loss events in Japan, Australia and New Zealand.

Turning to the regional lines of business, Western retail had the largest increase in core commissions and fees at 12 percent, while Florida and national increased by single digits. However, organic growth was still on the negative side for retail business, coming in at negative-3 percent.

Wholesale brokerage was one bright spot, growing by 1 percent organic. Powell attributes the growth there to the writing of new business and a strong retention rate.

Overall, organic growth for the firm stood at negative-2 percent.

Regarding the economy, Powell says clients are generally predicting that their business will be flat to slightly down, belying a conservative outlook. He called the current middle-market economy “fragile,” adding that people “are feeling a little better” but still remain cautious about the future.