NU Online News Service, July 20, 3:13 p.m. EDT
Brown & Brown's 2010 second-quarter net income increased 1 percent, or $517,000, over the prior year's second quarter to $41.2 million, the insurance broker said.
The numbers were an improvement over the first quarter of this year when the Daytona Beach, Fla.-based firm reported net income down 8 percent, or $3.9 million, to $44 million.
For the first six months of the year, Brown & Brown said net income is down 4 percent, or about $3.4 million, to $85 million. Earnings per share is off 4 cents to 59 cents a share. Revenues are down 3 percent, or $14 million, to $496 million.
In the 2010 second quarter, earnings per share remained flat at 29 cents. Revenues declined 1 percent, or $2.7 million, to $244 million.
Organic growth showed some improvement over the prior quarter at negative 4 percent, compared to negative 8.6 percent for the first quarter of this year.
"No carrier wants to lose a renewal; they are very aggressive on new business pricing and there still exists a gap between new business and renewal business pricing," said J. Powell Brown, president and chief executive officer of Brown & Brown, during a call with investment analysts. "Regional carriers are very aggressive."
Mr. Brown said that, nationally, insurance rates are down on average 4-to-7 percent across the country with prices ranging from flat to 10- or 20 percent down depending on region and line of business.
He said some excess and surplus business is gravitating to standard lines, while other business, such as property accounts with Citizens Property Insurance Corp. in Florida, is moving back into the E&S arena as the state's residual property carrier increases rates.
Mr. Brown indicated that until the overall property and casualty environment improves, the company will continue to struggle to grow organically.
"We need to write more new business and retain our current business," he said. "We are pulling every lever we have left to pull."
He said there is growing optimism among middle-market businessmen and clients that the economy will be picking up, but that has yet to occur.
When asked about the impact of the oil spill in the Gulf of Mexico on the insurance industry, Mr. Powell said that for the insurance industry there would be no broad market impact on rates.
He noted that Florida is dependent on tourist dollars and visitors are going to beaches on the eastern shores of the state and spending their money there instead of the Gulf side.
The greatest impact from the spill, he ventured to say, would be political for anyone running for office who supported off-shore oil drilling and now has to defend that position.
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