ProgramBusiness
 
  


  1. News Articles
  2. Related News Articles
  3. Comments (1)
News Article Details

Brown & Brown Chairman: Agents, Brokers Under Pressure to Raise Rates

Source: A.M. Best


Posted on 07 Feb 2012

Facebook LinkedIn Twitter Google

It’s a dangerous time for retail agents and brokers, said J. Hyatt Brown, chairman and acting president of Brown & Brown Inc.

Agents and brokers are under a great deal of pressure to raise rates, he said, but much of the market is still “wormy,” with rates still dropping.

“The moment you relax, someone will come in and eat your lunch with a 10% reduction in premium,” Brown said during the company’s fourth-quarter conference call.

“So I would say, A— the push to increase rate is intensifying. B—I would say the economy has bottomed out in most areas,” Brown said.

Brown described a market that varies widely by line, location and region, even in the same state.

For instance, in Northern Florida, new property rates are flat to negative 5%, while renewal rates are flat to up 5%, “if it sticks,” Brown said. “There’s a lot of push back depending on construction, depending on location, etc.”

In central Florida, even though the RMS version 11′s new model has increased potential losses from hurricanes, new property rates are down 5% to 10%, and renewal rates are up 2% to 5%. New entrants into the market have increased competition there, he said.

Non-catastrophe exposed areas and vanilla product lines are still very competitive, Brown said.

In Louisiana, “the rates are squirrelly and the capacity is diminished,” Brown said. “You don’t know where rates are at the moment. There is pressure to push them up and if you have competition, they go down.”

Personal lines along the coast are moving up 5% to 10%, he said.

Brown & Brown posted a 13.5% increase in fourth quarter net income boosted by a 6.2% increase in revenue. Net income was $36.5 million for the quarter, up from $32.1 million. Revenue grew by 6.2% to $244.1 million.

For the year, the brokerage exceeded $1 billion in total revenue for the first time. The company set the goal of reaching $1 billion in revenue in 2001, when the company had just $395 million in total revenue.

In January, the company said that J. Powell Brown, president and chief executive officer of broker Brown & Brown, is taking a temporary leave of absence for health reasons. J. Hyatt Brown, who has served as the chairman since 1994, and who previously served as CEO until his retirement from that position in 2009, will serve as acting president and CEO during Powell Brown’s absence, the company said.


Comments

 
Pbsubscriber Feb 11 2012 10:34AM Report Abuse
After read reading Hyatts comments he's correct to an extent, but some of the challenges that a national brokerage experiences is account shrinkage. With M&A going on now for well into decade as these agencies are acquired the corporate management can only do so much to hold on to the original agency owners who guilts the book of business. This is why you're seeing new shops pop up. The competion is not only going to be price, but also lack of business's out there to call on along with these new agencies that controlled the relationship of the accounts that were aquired to begin with. Solution wake National Brokerages new organic business and cross sell!
Post a Comment
If you are a Storefront / Tradingfloor user, click here to login.
Note: As a guest user, please fill out the form below to post a comment.
Post your comments here.
Name :
Email Address :
Captcha :
Comments :
Character left : 2000