Summary of Brown & Brown’s Q2 2022 earnings call
Brown & Brown hosted its Q2 2022 earnings call on July 26th.
- Brown & Brown (B&B) reported $840 million in total revenue for the second quarter – a growth of 15.5%
- Completed 8 acquisitions – including Global Risk Partners , Orchid Insurance , and BdB
- The largest challenges continue to be (1) the ability to hire and (2) inflation
- The focus is on the availability of limits for certain classes and geographies – seeing tighter pricing sensitivity and more rigorous underwriting
- Admitted market rates – similar to past quarters – up by 4-8% for most lines with the outlier being workers’ compensation rates which continue to be down by 1-3%
- E&S – premiums increased in the range of 10-20%
- CAT, wind, property rates – up 15-35%
- Earthquake rates – up 7-10%
- Similar to last quarter, carriers are focused on insurable values as replacement costs have increased substantially over the last couple of years
- The impact of higher values coupled with losses will more than likely keep property rating increases in a similar range through the end of the year
- Placement of professional liability and excess liability remains challenging – rates are up 5-15%
- Cyber – rates and deductibles continue to increase and carriers are requiring effective security protocols
- Writing personal lines property in CA, FL and LA is challenging with the expectation that appetite will continue to be constrained with a number of accounts moving to states’ plans – the order of magnitude in ‘residential’ is several million dollars for B&B
- B&B’s 4 segments are: retail, national programs, wholesale brokerage, and services:
- Retail delivered almost 9% growth as a result of good new business, solid retention, and rate increases
- National programs had an “outstanding quarter,” as it delivered 19% growth – one of the best quarters in the division’s history
- Wholesale brokerage delivered 7% growth
- Services declined by less than 1% due to higher activity in claims relating to travel cancellations and weather events
- In many instances, businesses have had their best year – examples – construction companies, restaurants, hospitality businesses
- “Our business today is much different than our business in 2009…. There are some people out there that think that we are a retail business. And I would say that we are a diversified insurance broker because 58% of our revenue is retail but for everybody else that maybe isn’t getting it – that’s 42% other than retail – and that part of our business performed really well.” – CEO Powell Brown
Bottom Line: They are writing a lot of new business, according to CEO Powell Brown.
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