Brown & Brown Reports Strong Q1 2024 Results, Fueled by Organic Growth and Acquisitions

Brown & Brown, Inc., a leading insurance brokerage firm, announced impressive financial results for the first quarter of 2024 during its earnings call on Tuesday.

J. Powell Brown, the company's CEO, highlighted key metrics that contributed to the strong performance, including double-digit revenue growth, robust organic growth across all segments, and a significant increase in adjusted earnings per share.

The company reported a 12.7% year-over-year revenue growth, reaching $1.25 billion in the first quarter. Organic revenue growth, a vital indicator of the company's core business strength, stood at an impressive 8.6%. Brown & Brown's adjusted earnings per share also saw a substantial 18.8% increase, reaching $1.14 for the quarter.

Brown attributed the company's success to strong performances across its three main segments: Retail, Programs, and Wholesale Brokerage. The Retail segment experienced a 7.2% organic growth, while the Programs and Wholesale Brokerage segments saw even higher organic growth rates of 11.8% and 10.8%, respectively. The company also completed six acquisitions during the quarter, with an estimated annual revenue of $16 million.

Why this matters: Brown & Brown's strong financial results demonstrate the resilience and growth potential of the insurance brokerage industry, even amidst a competitive market landscape. The company's ability to deliver consistent organic growth and strategic acquisitions positions it as a leader in the sector, setting a positive tone for the industry's outlook in 2024.

During the conference call, Brown discussed the competitive insurance market landscape, noting pricing changes across various lines of business. Employee benefits saw 7-9% increases in medical and pharmacy costs, while admitted P&C markets were up 5-10%, with workers' compensation down 5-10%. Excess casualty lines experienced continued increases due to inflation and legal judgments, and professional liability rates slightly improved but remained flat to down 10%. CAT property rates moderated, with some downward pressure.

Despite the challenges posed by the competitive market, Brown expressed confidence in the company's ability to navigate the landscape and capitalize on ongoing M&A opportunities. "The names of participants potentially changing but not the overall competitiveness," he stated, emphasizing Brown & Brown's focus on cultural fit and financial viability when evaluating potential acquisitions.

Brown & Brown ended the quarter with approximately $580 million in operating cash and an improved adjusted EBITDAC margin of 37%, up 130 basis points from the previous year. The company's strong financial position and consistent performance have positioned it well for future growth and success in the industry.

Key Takeaways

• Brown & Brown reported 12.7% revenue growth, reaching $1.25B in Q1 2024.
• Organic revenue growth was 8.6%, with strong performance across all segments.
• Adjusted EPS increased 18.8% to $1.14, driven by acquisitions and organic growth.
• Competitive market landscape with pricing changes across various insurance lines.
• Brown & Brown's strong financial position and performance position it for future growth.