Hilb, Rogal & Hobbs Company reported second-quarter net income for the insurance brokerage increased 31 percent over the same period last year, helped by production from new acquisitions.
For the second quarter, the Richmond, Va.-based firm reported net income increased $4.8 million, from $15.8 million or 11.5 cents a share, to $20.6 million or 12 cents a share. Revenues were up 10 percent or $16.4 million, from $162 million to $178 million.
For the six months, revenues increased 7 percent or $3 million compared to last year, from $44 million or 22 cents a share, to $47 million or 23.5 cents a share. Revenues increased 5 percent or $17 million, from $345 million to $362 million.
The firm saw a 9 percent increase in commissions and fees of $13 million, going from $151 million to $164 million. Of that figure, $1.6 million was new commissions from newly acquired agencies, which translates into organic growth of 7.8 percent.
Martin L. Vaughan III, chairman and chief executive officer of the firm, during an analyst's conference call today, credited the increase in organic growth with new business from the firm's producers and strong retention rates. He noted the firm wrote some very large new accounts, but would not go into specifics.
He added that the firm has not seen an increase in commissions from insurers despite the continued softening market place.
The company has pursued an aggressive policy since last year of weeding out nonproductive producers, and management credited that policy with its current results.
F. Michael Crowley, president of the firm, said the firm's hiring of new people has slowed, and Mr. Vaughan added that the company has hired fewer people than it expected.
The brokerage said its producer count has dropped from 560 last quarter to 544.
Mr. Crowley noted that catastrophe risks are witnessing tightening terms and conditions, while other lines remain consistent with past results. Generally, Mr. Vaughan said, rates continue their downward trends.
HRH announced last week that it would pay a quarterly dividend of 12 cents a share on Sept. 29 to shareholders of record as of Sept. 15.
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