BRO - Earnings call transcript Q4 2024

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Brown & Brown Fourth Quarter Earnings Conference Call. Today's call is being recorded.

Please note that certain information discussed during this call, including information contained in the slide presentation posted in connection with this call and including answers given in response to your questions, may relate to future results and events or otherwise be forward-looking in nature.

Such statements reflect our current views with respect to future events, including those relating to the company's anticipated financial results for the fourth quarter and are intended to fall within the safe harbor provisions of the securities laws.

or in and are materially result uncertainties currently or events number to from of or forward-looking anticipated risks any factors. of and desired a results number the as subject future a those statements of Actual made in a referenced may differ

issued as the factors the company risks identified unaudited differ uncertainties time the financial other from Exchange or quantified, current finalizes filed identified preliminary results press its to for Commission. Such factors it currently yesterday, that results include the set financial in forth not numbers have release company's and reports that may time the company's determination and and its fourth in Securities with quarter those the the from

-- posted factors is Additional this connection and information of company's business as other Commission. Exchange presentation as statements call regarding the in forward-looking company's these slide the in and prospects the filings affecting well with additional the Securities with and and in discussion contained on

any intention or as revise whether statements, new disclaim result update to of otherwise. forward-looking future a any information, or events obligation or We

are measures this call. financial the presentation www.bbinsurance.com this company's used at by reconciliation or the then non-GAAP addition, release conference in financial non-GAAP certain Calendar call most investor Relations Events. website and measures for of be in any comparable clicking of the found company's in In A to on GAAP there can financial on measures Investor earnings the press

Chief I President call Executive that over will said, to and the turn Brown, With Officer. now Powell

begin. may You

J. Powell Brown

quarter everyone, morning, Michelle. fourth you, Good welcome and to call. Thank earnings our

magnitude by wildfires. to assisting deepest caused to the fires. condolences like events many those is The individuals express committed the impacted the to by impacted terrible We're these by First, these devastation horrific. our California of we'd

our to results. transitioning Now

margin which of nearly performance and where quarter included Our possible capped was delivered billion delivering only customers day. incredible growth team another are per of dedication as every double-digit These and the fourth $X earnings double-digit as XX,XXX-plus results our revenue, our share year our expansion. strong outstanding teammates through for organic just off well

we've generates diversified financial to a results. highly the The best-in-class culture. build years, to can operating consistently results deliver is that reason business diligently worked we Over our unique due these

fourth Now #X. on the let's into for quarter. get Slide results the I'm

the organically fourth XX% delivered XXXX. For of we of over in $X.X quarter, growing total billion, revenues QX XX% and

improved XXX share XX%, points margin EBITDAC earnings adjusted almost per $X.XX. grew XX.X% basis to by to Our our adjusted and

revenues acquisitions front, the completed XX the strong quarter. of very M&A On estimated Across with board, we was annual $XXX it million. a

I'm on X. Slide

total year we XXXX, full revenues over growing XX% billion, of and the of XX% $X.X For delivered in organically.

basis, per On generated nearly billion adjusted adjusted Our basis increasing more our from over was share operations. margin EBITDAC points. XX% than $X.X over $X.XX, of diluted to an net grew income XXX XX%, and we cash

all $XXX new another capabilities. being year the the and had We'd to to with new with warm a with completing annual revenue, the XXXX, extend and acquisitions the M&A, organization that We during the like Netherlands. million approximately we're largest Quintes of of quality us teammates joined of our pleased welcome in good

business major to cautiously cautious the I'm standpoint, compared changes an being few from to have on were in as last operate economic there leaders which Slide X. no optimistic. Many the From we shifted for markets quarters.

view we similar stable, XXXX generally operate at our materially we growing we in levels backdrop their opportunities are which their did not good in to of hiring In as and levels growth and addition, see the third still relatively quarters economies second XXXX. a revenues the for change of beyond. they're investment, Overall, and as companies which

increases rate standpoint, pricing insurance an most From continued. for lines

last compared to had and last quarter compared on as moderating for quarter largest the year discuss line auto the The year, they're that for upward downward except to which and change last more detail. as pressure with casualty. ongoing However, property, in we'll CAT

Employee and to X% strong medical pharmacy the prior Benefits to care as ongoing are be of pressure up businesses. similar continue was for consulting costs This upward employee our complexity health quarters to Pricing for demand and driving X%. benefits

make, market With and we've investments positioned challenges. navigate any these made to help well the to size continue we of companies are

flat quarter X% were the in The last remained, states. in year. most market rates to X% slightly for down most Rates workers' they compared P&C the up prior X% as lines compensation and admitted moderated downward and versus to to were for trend

fourth were property For range up in the flat non-CAT the quarter, X. rate still increases of to for

increases casualty, we ongoing the continue to layers, of in legal primary see for size rate the U.S. due to mainly For judgments

Consistent XX%. last excess the for rates range quarters, to with in increased the of few casualty X%

saw we rates year. liability, to compared flat professional For as to up X% last

Now shifting E&S markets. to the

the the on that speculation flooding of Helene of CAT trend of quarter, Milton property continue fourth decline at rates property to rates insured that versus the both slow beginning recent decrease throughout events or fact First, losses there reference CAT and in storms fourth the wind, entirely. Based and property, reverse impact the would the even the quarter. CAT Hurricane to was were heavy

in to were customers the decreases third quarter, with end XX% seeing XX%. to of more rates or to closer similar On of excess average, down XX%, the

From to while or the deductibles, a rates realize increase buyer's savings. limits modify lower others leverage perspective, some their to

individual of a not rate for for our impact results of materially business diversification result As company. the total will changes generally broad lines our

to economy and growth business. organic The win major drivers of our ability the our new net are

and good lines another while We delivering some lines were example. down, still up had results. strong some were that that was quarter This

good about million was On and the revenue, very ability the quarter. had our years. over Quintes. to We of acquisition we a position XX and great front, Dutch M&A $XXX We're annual market excited acquired our coming our grow largest companies of

businesses, smaller midsized for as deals, high-quality fierce and are competition rates decrease. for interest remains we're to beginning from sponsors activity From more an starting and overall the to see market financial perspective,

now I'm X. Slide on

performance to few growth, the organic driven as business transition new the of the by consistent our delivered lines level X net with quarters. Retail it performance X.X% segments strong business. the over quarter. with good in last pleased Let's of was performance most We're of our for fourth

growth was partially impacted our Organic nonrecurring by of business and the certain timing revenue. new

year, good the full our XXXX. well, as and prospects we growth is for about For we delivered of performing X.X%, organic strong feel team our

exposure organic the as XX.X%. with quarter claims outstanding revenue our hurricanes. expansion as driven a another was with and and delivered number QX programs of This performance business by growth strong unit well new with QX associated of Programs

captives business property well, even our very rates and property CAT continue to lender-placed performed and grow, Our decreasing. business with CAT

year, For amazing we organically, result. an the full grew XX.X%

global the not we've thoughtful one and the and As if the operator made of marketplace. strategic investments, creating of in MGUs, resiliency largest, MGAs and meaningful largest, differentiation

another performance was organic unit X.X%. and the all pressure of This revenue a muted somewhat net downward driven through Wholesale new lines quarter Brokerage property. of with increases business growth growth by delivered was across that by exposure good combination of CAT

organic heading the have For growth year, strong full good Wholesale momentum of X.X% into XXXX. we and delivered

to financial results. it get turn our into details regarding I'll Andy over more Now to

R. Watts

either EBITDAC, financial Powell. Great. refer income to or financial before non-GAAP everyone. results to on net the When taxes EBITDAC income of this we're our per referring Thank press I'll margin, detail. measures reconciliations found the appendix an GAAP in our issued you, presentation to diluted basis. adjusted measures in in review be release income yesterday. Good those can The we of share, morning, we additional or

XXXX. total Income revenues increased We to #X. delivered over EBITDAC XX.X% by of Slide XX.X%, XX.X%. income We're before on taxes compared as billion, quarter growing fourth by of and $X.XXX grew the

the the margin by expanding XX.X%, year. basis Our of quarter prior points EBITDAC was over XXX fourth

quarter in for the the rate XX.X% quarter increased tax fourth to the XX.X% prior effective year. slightly Our of versus

Diluted net increased to $X.XX. XX.X% income share per

year compared as floating outstanding down shares prioritize continue debt. average we paying slightly rate weighted our increased to Our last to

Lastly, our strong of quarter. was as share by XX.X% Overall, fourth it a XXXX. per to dividends very compared quarter paid the increased

#X. and The was organic activity by commissions. X.X%. segment between past We're Retail substantially revenues revenue of difference with driven X.X% over grew total contingent on higher and total The revenues organic Slide year growth the by acquisition

contingent to leveraging our higher growth noncash full of of by stock-based higher by EBITDAC offset margin compensation. finalization partially expanded by driven This was XXX performance and XX.X%, incentives basis base. expense year points commissions,

revenues We're million in to of prior in than growth one net this the captives. on Slide XX.X% contingent Growth and year. excellent revenues higher in reinsurance total our growth was #XX. in organic of lower increasing XXXX $XX commissions, benefited change mind the disposition of Programs Keep XX.X%. with with quarter had activity but the to organic from total charge recorded due portion related an a was that associated for in

certain the driven primarily XX.X%, a to points expense businesses basis fourth XXX and, extent, of leveraging by quarter expanded of base in lesser XXXX. to margin EBITDAC the Our by our sale

our call, quarter with earnings As we the third million recording processing we Hurricanes quarter fourth in anticipated flood $XX and of in Helene to million associated revenue claims Milton. discussed $XX

we of $XX million. severity, As a average adjudication recorded and approximately increased result faster-than-anticipated

adjudicating half into quarter we to majority of severity, the of recognizing this and with recorded the With of in $XX being increased the visibility of XXXX, the claims revenues anticipate approximately first timing first million now million $XX year. in

on over We're #XX. Slide

by in The Wholesale with excess increasing of total organic XX.X% in and had driven total incremental substantially organic quarter revenues higher contingent Brokerage commissions. X.X%. segment another good revenues growth was of Our expansion

EBITDAC onetime to Our full costs. margin along by performance basis with points of year incentives, XX.X% due certain finalization the XXX decreased to

#XX. results Slide our years. on presents slides over for This We're both

with XX.X%. before These share are income growing results the with XXXX. by of XX.X%, for XX.X%. by $X.XX, EBITDAC to Overall, revenue total compare Our income grew increasing XX%, net income points XX.X%. taxes net we was pleased growth extremely the XXX basis to growing margin with per And

over we billion cash a prior cash our have comments capital growing $X.XXX few outlook. regarding structure, cash from operations, perspective, generation year. generated flow We From other the XX.X% a and of

as year of from ratio percentage flow operations full of strong total at Our remained a revenues XX.X%. cash

also million of tax to As the income paid XXXX we related deferred associated for be of due the $XX hurricanes. are with These taxes federal relief the the XXXX. quarters approximately taxes IRS a third of fourth XXXX quarter payment the have of to reminder, second and in

Quintes also credit with revolving we in million the $XXX During on down our the drew the facility quarter, closing of acquisition. connection

XXXX finished gross continue our For in and to in line delever a the average. to we as is our XX-year debt year, position EBITDA with conservative ratio full

for regarding We have a XXXX. few outlook comments

we As XXXX. hurricane year commissions season. we on potential it anticipate be will outcome what to of Atlantic the contingent and now, the full unknown the compared slightly The of based for are variables down the wildfires contingents impact relates XXXX California XXXX know to the of

division, X For the have Retail we items.

business, new the The the phasing to revenue between quarters. is first revenues growth XXX organic quarters. growth quarter of lower on net for the relates approximately other anticipated X for the forecasted be basis of organic Based points to than timing the first

our acquisition of revenues The In a its in second quarter relates the the substantial phasing placed are of of year. to Quintes the and item of number first and Netherlands, the recent profit. policies

of first record revenues revenues will quarters. we recognized evenly X the following result, with in a approximately the As remaining quarter, XX% Quintes' over the annual fairly

impact during EBITDAC margin unfavorably call. margins full our to perspective, the will within a anticipate will revenue this From From year ranges a quarters. the perspective, outlined XXXX and we in improve other margins and August QX the be

XX%. taxes, to to It should to of tax be As effective in the range our with relatively XXXX. it pertains be consistent XX% rate we expect

$XX in certain the $XX for be to be to rate current million, range on we In to $XXX million the we in outlook reductions regard anticipate million of anticipate the this year. rate $XXX cuts million to full the income, Based in interest the interest interest regarding in of in to XXXX, recent given range territories. expense benchmark

in consideration contingents our margins income be will expecting XXXX for down than to Finally, more net likely relatively taking flat. adjusted into EBITDAC that we're be and XXXX,

for turn With to back comments. closing that, let me over it Powell

J. Powell Brown

Thanks, Andy. Great report.

this backdrop continue operate From moderate of levels for is grow and be an believe a stable 'XX. grow economic to half standpoint, at at the to and invest which second we to good similar in the to economies we levels. expect companies We

business administration, U.S. inflation each, finally, it the business the leaders a pace intensity the of matters. of Depending influence that of in include the outcome of interest From on are policy and main changes potential trajectory watching rates, perspective, and tariffs, will the from geopolitical new Presidential and, topics outcomes timing most investments the growth.

For change on the insurance many our half year. XXXX, as too thoughts first we'll provide of during things pricing, for rates the can

be be and Specifically, are timely the will will will extinguishment other estimated -- hopeful losses significant. not not there there wildfires be large wildfires of another the California critical, large we're as

California and relatively the on maybe losses, pricing non-admitted depending impacts in Subject for could this versus for admitted anticipate to their admitted slightly be on downwards we Then XXXX property. similar pricing of country. rates of outcome, both lines or be there second across insured half magnitude to the the moderate

that similar outliers will be talked we earlier. There about

will For discussion property the E&S CAT really the and all lines. between be markets, split other

the loss down seeing, rates similar would indications the that XX% half more than to experience. 'XX. expect as lead could early should in of be second quality be casualty professional liability compared expect We were they we to believe in CAT on on for property QX pricing fourth in and us are additional in we be downward quarter. Based pressure what rates construction and property, based rates there will what to

both we with we as companies. feel internationally, front, domestically of good pipeline, and building good M&A the lots have and robust are a On relationships

As see in we're in businesses. larger of the larger the year, starting moderation last PE-backed a some of transactions a result multiples to

we From a the culturally sense perspective, and and sheet balance to that our have finished access capital companies position make to year for fit strong deploy and cash financially. in

another forward successful year in looking XXXX. We're to

as performing better and to leveraging achieve well collective capabilities Our our customers business win existing new businesses our we're are results. more help

solution, as X retain leverage is segments. selling Our great, our across market to we and to win continue more will position customers our model

it that, to open Michelle With for I'll back over turn to Q&A.

Operator

Raymond our Gregory Instructions] with question [Operator from And first is Peters James.

Charles Peters

you new had it In seeing and and year. I you in success business the you're net programs. about comments, could wondering spoke -- was last and you if certainly, your retail

maybe affect wondering you I new and if and was next compares what year. 'XX us it some there for California -- And give or the map some how with on how do outlook is If of business sort you net us drivers to that, for new could might for industry. of perspective your how might on the inside out business that in

J. Powell Brown

a would business all divisions. just of of new wrote things that in the in more have Greg, couple broadly business X I we than across We say 'XX. our ever

pleased we're one. with So number that, really

Number the both we together, the customers. to have company collaborative purchased. because as in, to that that to anticipate we've two, do continue ability of a all are of really and well as to capabilities and leverage the capabilities And built we know, working our our we invested you benefit of

As kettle lot of and variables I whole itself, I to there's onto a it think California, relates think fish that's of a there.

fair in monies And in are so number one, the losses the do a impact to and the of all That's And work? question. assessments surplus accessible, big plan. how the excess the both event reinsurance,

go-forward the state of number the a non-admitted carriers Number will the in carriers actions on doing two, impacted of admitted today number and the by probably be basis. business

product. And provide of Insurance that so a the to are pricing of there with product the Governor with trying and they're dealing scenario an Commissioner market, so availability where acceptable competitive difficult

a would would you us in we so it seem tell E&S massive to the be high very in And expansion that that there that is market believe would it -- at area. that level, a I

is in people respond don't things, drives independent many that, understand impact the to the of quality fully stress regulatory importance said pricing to rebuild, surge actions. industry the any and that for not of that permitting X I ability those demand and the and can't or Having because contractors need our of

Operator

Cox Robert Goldman with from comes question next Our Sachs.

Robert Cox

you quarter maybe X%. the mentioned Retail. Yes. rate Curious run quarter, start was that about just I going fourth with into to the Last off think all

could organic next quarter rate this 'XX? that to into into as item? or from nonrecurring And the think year of Retail impact about sort you run the size the XQ still we Is the heading

R. Watts

Andy Rob, it's here.

remarks in those. well kind comparables as businesses timing as know, that our comment some have we come businesses prepared number the things of On a bonds that of got timing made is, as businesses as our regarding by benefits can kind of of when such you we've in, employee quarters, we

basis Those probably by It the there. any quarters, quarter. in us of back see quarters, that underlying nothing but come points business. around net to organic just move -- the then that We kind over coming always impacted that pause can that timing gave will move just new of there's by quarters. the around XX XX We'll by think and can in

into well really about winning how just business feel we about But the as good momentum is and XXXX collaborating Powell and heading net talked new business the earlier.

Robert Cox

on Okay. my And just follow-up.

talk year normal of For XXXX. And hoping seems sustainability of look moving that just was rate the pieces. also the run segment you segment, like a commissions sort Programs? Program of growth of like in a underlying could lot what the into does it organic about in contingent I

J. Powell Brown

to Do want answer the contingent? you

R. Watts

Yes. Rob, on in really segments. fourth all year contingents on -- is a as take Programs business first we've as, contingents the it as across let had quarter well well had our me as we good obviously, of

the year I pressure think during lines. that was one in had Retail, personal primarily in the downward

to XXXX, of had But related the as calculations we this head XXXX. finalization I we know we some on into year adjustments to think contingents

think, some we we'll next downward on pressure least that have at year, that probably going contingents space. So in into

And just may California losses play programs. of how area right how our kind now. I of It's out tell hard the impact in a think other to that exactly couple and is the

J. Powell Brown

of the increase your question, flood the on total and the think had you million you component. $XX Robert, you So in components well, quarter, other the revenue about Programs this had -- if reinsurance of X you growth the had

particular those pressure. to driven rate in more And space, last has about you other programs. if areas today, and and a been wind growth think quake several of Program some our so see starting years our in larger And in we're lot the from of

you I'm but we moderating I can only across think seeing you're we don't of of grow. not in rates. that a Programs, give think trying of industry to that impression, so that kind but not not And the kind mean does growth

as easy, growth know, we've for adjusting our is the organic of that is Part It's business. for delivered in that would area. in competitive the feel and But results we Programs really good by and feel our remain willingness with I partners don't 'XX we in we their And to beyond us not driven say so about prices on marketplace. good really downward give carrier you guidance, what Programs. work about to but

R. Watts

mind keep of a And then, of rate we're that, in that we Rob, also premium run amount and call now. kind there, captive, hitting write of inside And specific our right? we'll it

won't we So see 'XX. the we've well, as seen same It's performing 'XX but of that the going in order to of very lift we capitate that amount limit exposure. and to over 'XX kind

Operator

question Greenspan with our will And from come Elyse Fargo. next Wells

Elyse Greenspan

My is first on Retail. question

sounds Andy, of gets the the than better you some it you X, adjusted stuff number to like right well, timing I So closer the X was X% that other the out, QX, right, with year. pointed the which know QX as of quarters

XXXX? want And that triangulating forward I that this on the segment. to help we X guidance to Is in to know saw given less you even that back guys you're of But just to? about think the X, just typically can noise given maybe way just give us don't it's right X, you QX, that the think X% pointing headwind half the

J. Powell Brown

I'd like that, to answer Elyse.

Retail low- a that mid-single-digit growth of at this business. the you, our said end day, know business we've but to frustrates I is the So organic

impact that but that the is are headwind give that to QX you So relative you number the bps our for overall articulated whatever said, year. does we're to that we've guidance foresee the you XXX think, We in not outlook as not giving we you just number, QX. going

R. Watts

think to to it keep your way it's year whatever so that easiest line full where correct it, if a X, want you on have the Elyse, number keep your X, number is, X, you with number whatever So in you are. or

and first the up okay? to push the quarter second, adjust Just down and then fourth, third

Elyse Greenspan

revenue margin obviously, some the headwind, Programs, right, expect obviously right, from guide, than in there's in And 'XX. right, flood-related you had greater then -- with 'XX you

segment, depending margin So a in could upon I'm assuming headwind that that organic. be

thinking the the other And what one, expectations? guess, feel million wasn't segments, random then quarter. segment to just negative relative I just there. about I $XX the in organic clean was had Do EBITDA flowing one, margin through sure corporate just from of

R. Watts

Okay.

by full X will and So I that don't And we I company. guidance, think on be areas that investment We right, we segments. think it the on individual the Elyse, you're gave income think represent total year headwinds color break will down was contingents.

storm second the with the quarter do claim quarter year, Depending over for revenues first and for claim first upon year. storm what the primarily some last we in quarter into this happens activity have

always contingents think, should Again, EBITDAC total that back the that least parts We income, we get flat the business know margins. relatively investment next on headwinds at of the with moving on and pretty company that should year. the well remainder and there forth about adjusted perform is

Elyse Greenspan

the QX. And then just the in corporate

R. Watts

We costs one-off really Nothing had in fourth nature. some in quarter. just unusual there in the

can quarters of move always around kind those by unusual. nothing and years, So by but

Operator

Barclays. the Alex Scott with come next from And will question

Taylor Scott

I just one commentary of for could some on M&A you provided First expand the if environment. to you had see the is on

what maybe the these Just private too more some your is done, looking that seems of ripe markets. big companies have like some equity-backed scale the have gotten for private at environment M&A larger maybe of it for of peers

you any in your terms of go? think opportunities? we how And could Are way seeing those more of you about could of appetite big types

J. Powell Brown

make foremost but as sense and what mostly last not in know, financially. what come Alex, we about talk market year, you is we this we What's first anticipate then years it some exactly so the fit, and would time. and thought in for occurring to cultural only year,

consolidation out our all acquired buy other in about next seeing looking there X thinking private the There -- private-equity great that. started, were were right X-plus internally years. firm. And were to potential of that that what X strategics the seen years parts private buy And firms in you're that to equity-backed X industry ones equity-backed are large you've to ago, are talking is are to the started or there we larger The year firms. the backed. firms about last for I other are seeking other and

individual What look is opportunity we its every we on would merits. at own tell you

And when an done any paid we financially pretty make larger we us and to of conservative we're size much business might proud we been make is investment so what our that buy. down acquisitions want have prepare very of have and that very debt we to to

It one. anything we're buy -- we the do going we it right ability find doesn't mean big to the but or if want to

so feel the positioning came And that sense not we a good our financially, really and about we standalone and good And made acquisitions only it. from from acquisition larger look the that a at have absolutely do we'll basis. core very to business fit if along opportunity culturally

But about invest, want want we we we and is we're invest, which the business how want we business. to when feel to really most our to the in do, have, important going. And where invest to good ability the thing we

Taylor Scott

really helpful. That's

sort the of wanted lender -- a for business that we lender cycle have Florida? is of placed. may that on had sense of California? get to I in sort to I placed. more one to I'm nonrenewals are and how exposure you is Southeast in trying where just the just understand operate Next impact do Or

understand of in I the and like of closer we're trying tougher one, I'm So comps a of and into going think were Florida hopefully it to tailwinds thing. end environment But nonrenewals. were a just where sort maybe seems lot that getting there to probably California, challenging right?

J. Powell Brown

United it the entire Alex, make simple, States. We'll

Taylor Scott

right. All clear. That's

J. Powell Brown

I'm to trying funny. telling we be everywhere. just I'm have you, not exposure

Taylor Scott

what to at. is I That get Understood. wanted

Operator

come And question Mark our from Hughes next with Truist Securities. will

Mark Hughes

that reinsurance on item to growth impact is to just make the Andy, million $XX year? this way didn't that's I'm we $XX calculate good organic Are change it? that and a have the I sure to about to want organic items. thinking the fact think the the to guide million Is you

R. Watts

Yes.

I Remember, the so in change year Mark. took right, the this be -- quarter that for last treatment. we fourth in that fourth would we quarter, think fine, of adjustment 'XX, the

quarter in to last impact negative fourth of a was that year. our organic So

on now a And we're comparative basis.

there. that's like see year different it's going it's already that not you're So comp to in a next

So QX be we'll 'XX. to 'XX to comparable QX comparable

Mark Hughes

guess, with of you contractors about you've the the quality in you Do rebuild. the experience need Powell, in quality mentioned, got Then Understood. observations have for lot California? Florida, had more I supply contractors -- any to

J. Powell Brown

contractors. this would the losses, answer I'm to enough possible I'm not be but demand massive. based just the on is speculative, Well, will be purely be cannot the But Mark. saying funny, there of trying humanly be so the magnitude

And one told, quote the years. this, up on of is can X.X to things please permit been -- that home but a I've a getting me build that to take don't

of rebuild. Governor the that thoughtful do believe I in officials of need elected and more So terms will rest will the the be the that there to something expediting

them So a expedite would allow much think which larger construction. of something on scale, to

So like the let me lead you down path of something the Marshall Plan.

Operator

Michael Zaremski And our with from question will come BMO. next

Charles Lederer

the expectations. the drivers to provide likely for be since Can on just on flood Charlie ex Mike. margin Maybe lower? expansion, ex margin contingents going you of revenue just flattish some is back color what that will This and

is there on? operating can expense or is Or that? Is driving it more touch operating And more it ben? comp leverage anything you and just

R. Watts

grows around make to like platform, really run also sure so we Again, it's it's exact grow hundreds of them same at the we different invest not the we to try businesses we're so Charlie, looking remember, each across the same delivers percentage in of profitably. times, exact leverage. profit. But and one our operating businesses always

investments that outside as of make year previous to lot more how the in of areas. in investments simple we in There's it years, kind just the And moving so we made some world parts organization, and for parts. to relatively some trying moving make inside a all we're the benefits we'll see the of different current we'll get

Charles Lederer

market then seen Got out of Florida. significant in deep my some showing guess, And I population follow-up, data into private citizens it. the relatively for we've

guidance? is -- based your commission or that structures that having guys -- impact different Or an do impacting you see you Do expecting there? materially just on the

J. Powell Brown

No.

Operator

from And question will Dean Criscitiello next with the KBW. come

Dean Criscitiello

less seeing in property pricing wondering the shopping. wholesale customer implies Or you markets? decelerating was if property are the accounts I other migrate for in less words,

J. Powell Brown

not. Absolutely

real of total you Dean, up extreme one for So substantially. a $XX but in They're one in year example, insured And dynamics let or one owner but for in your you Dean, has premium Jacksonville. more, an X just, me last one Florida. Tampa values. the insurance warehouses and years, years some you the instances you and in an there one. storage And are have explain have cold you Miami, the million last have in gone X in in Naples, got every

good unfortunately. about not And insurance, so so you're feeling

X happens. of X things so And

want to broker bear. make And market downward either market will right what typically will You and case, the will doing your bring pressure you in on this is bear the sure rates. the that thing, we

tell property really manager try light they're upward money, in or a you they any kind they're X of of looking would a to I little -- to worn can are of bit But pressure, a particularly save because years it's with -- way owner it. capture like that that just out

level, people at people I at I don't intellectual understand -- so And believe an that emotional but understand think that it and an level.

that, in a is said is I'm but there. so And different, lot everybody having there just saying

many that business we competition, face lot so instances, we And a way. of in have And to way. write that

the and respect earn to day. customers of every trust our have We

this and can But is Dean, that -- emotion where decision buying market is there that don't angst around imagine. is ultra-competitive than you please, think an more there there

Dean Criscitiello

That Yes. it. makes Got sense.

line the of sort but about kind topic of talk to on just increases of you casualty the into growth casualty, on that's given the there. of wholesale having that staying lines? trajectory Sort impact submission rate Can submissions, moving of

J. Powell Brown

Depends on that lines you're talking what about.

net today term that flowing would near So aggregate, that, have more to accounts inflow in the think say. continue And okay? There market are I been. what occur. to Here's in into E&S there there today the than a we still in is will intermediate

That Dean, we -- said, when continue automobile. an we casualty the a That's recurring and say line on rate and see of to be on -- casualty, basis. regular automobile admitted could increases,

into both seeing what to you're is we to is I know whatever wholesale into versus than retail out trying may think trying answer submissions we're or I wholesale So going be. -- The have. figure it the or the case more is do

which exacerbated So like Nebraska things in that it's been or non-admitted increasing written deductibles more they about, a areas E&S the market, be and in and/or increasing admitted for become don't submissions, goes about massive property the the places uncomfortable maybe with, Oklahoma some and more and and read hypothetically it have events, that that and market market you market. could convective by of wants property Kansas people time might read is but in into admitted business you and storms where long some the

the same I I'm talking So applies to but know concept property, casualty. that

but continues -- wholesale So market expand. to the

R. Watts

it. Dean, in of talked thing we about on The you look calls. about couple this thinks have buyer to a And how mind, the always to about keep

While what for trying And figure out because, got they they're balance rate their on they amount. ultimately, focused to is a online, focused how check premium. to are really that they're to on premium cut the

et want around cetera, keep trying to -- cetera. so they're to move premium. They're that to exclusions, all through balance that do of with going to want deductibles, they to in going they retention They're out figure the or what order buy. et the other move limits their And what's to figure out right

So correlation customer down okay? that there's up that X%, rates or or correlation the pays, you're the a if X% our the direct see go in potentially commissions even going not into to be to going premium direct

Operator

from question Capital with Heleniak next comes Scott our Markets. RBC And

Scott Heleniak

up. if hiring kind you stacked and organic talk wondering past Just that's about XXXX some of of could you've few done the years, the in how

that that? what's has part growth? of behind organic on terms the can behind in share going Just that a there driver And Anything been curious outside M&A. of scenes you on the big

J. Powell Brown

teammates. don't hire Scott, how we detail So we in discuss

actively years the in you COVID, through for been and have regard. several last we However, tell I hiring would that that

that's And in all teammates production adjusting marketing positions, teammates, service claims teammates, all teammates. types of teammates, teammates,

as And best it at so want look on team. the athletes we the we

best athlete so -- we're And routine. it's the

people be hire carrier successful have from acquisitions. or a people talented with other into through people very from get hire background of obviously other that We very, firms. insurance we That could industries industry. very We And transitions made background. lot our our

with last we're of addition the -- pleased we've year. But we teammates yes, acquisitions made to very the acquisition that the in hiring new made

Scott Heleniak

cost. had claims to the business. then last helpful. you $X just quarter guys That's know on million captive $XX I of Okay. million guided to And

you come -- number? quarter? -- did range? What Or do what it that the Was was in that the for how have within that

R. Watts

in Yes, that Scott, it was range.

Scott Heleniak

then, on the to clarify. question just just only And Okay. was I guess, captive the

still you're the that see you before? saying had at not Was So growth in that you for made cap, just before. XXXX rate the same comment as

R. Watts

Again, we a target but about rate complexity we're at -- there's -- premium in a behind, more there. that just run Correct, yes, amount remember, because will will of there. write we

Operator

BMO. the next Zaremski comes question Michael And with from

Charles Lederer

Just follow-up. one quick

I the landed you there if adjustments first kind are sorry -- the you in the where on it, that. on in where touch quarter adjustments if quarter any for Milton, can Helene curious, if the expect and or Just missed contingents of

R. Watts

Mike...

J. Powell Brown

Charlie.

R. Watts

right. then quarter got quarter third is in in Charlie adjustments Helene had We there for some Milton. back Mike, for we adjustments that's Nothing in out. called we the Charlie, had step fourth some for and we that the significant

there how And I out little as of what happens loss ultimately, we a what well that's as And might and see mean we've California. cautionary development why plays in have those that got 'XX. outlook for on think just bit to

Operator

turn over This it session. conclude now the would Powell like I does closing to for to Brown Q&A back remarks.

J. Powell Brown

to wanted Michelle. Thanks, your everybody for I today. time thank

& at with year cool XXXX. Brown pleased really a of tell. on as are can you are We of There business performance our going things last the excited equally about and lot Brown,

nice all to last and Bye. day, to I but talking I've feel the equally Hope way forward before, beyond. said our have year And a am XXXX you on and we look pumped this quarter. same you next performance and about

Operator

participating. you This for conference Thank concludes today's call.

now may disconnect. You

Brown & Brown (BRO) 28 Jan 252024 Q4 Earnings call transcript