NU Online News Service, Feb. 17, 10:26 a.m. EST

Citing the effects of the recession and continued soft market conditions, Daytona Beach, Fla.-based insurance broker Brown & Brown Inc. reported net income in the fourth quarter dropped 29 percent.

During a conference call yesterday with financial analysts, J. Powell Brown, president and chief executive officer of Brown & Brown, said this was the first time in the history of the firm that it did not grow its top and bottom line.

He described an insurance market that remains extremely competitive where premium prices are primarily down and at best flat, affecting commissions.

Generally, while insurers are posting positive gains, premium prices are down between 4- and 8 percent compared to the fourth quarter of 2008, Mr. Brown said.

Insurers, as well as the broker, he noted, are also being impacted by the shrinkage in insured risks primarily caused by the economic downturn.

Mr. Brown said in 2009 "there was a downdraft, as you can tell."

Fourth-quarter net income dropped $9.7 million to close to $24 million. Net income per share dropped from 24 cents a share in 2008 to 17 cents a share. Revenues dropped 8 percent, or $18 million, to $214 million.

For the year, net income was down 8 percent, or $13 million, to $153 million. Net income per share stood at $1.08, down from $1.17 from the same period in 2008. Revenues dropped 1 percent, or close to $10 million, to $968 million.

Organic growth overall in the quarter came in at negative 8.3 percent. The sharpest drops were in Florida retail (negative 10 percent), Western retail (negative 14 percent) and special programs, which stood at negative 11 percent.

When asked where he saw future performance for the firm in light of current economic conditions, Mr. Brown said, "If you believe what you read and hear about the economic outlook, it appears flattish. How that translates into our business, we don't know."

Cory Walker, chief financial officer, noted that one of the major hits the broker took in the fourth quarter was in commissions and fees, which reduced contingent commissions by more than $4.4 million. The company also took hits to its investment income and other income.

Brown & Brown Vice Chairman and Chief Operating Officer Jim W. Henderson noted that one of the company's major revenue drivers, acquisitions, may see a boost in 2010 as more acquisition targets have begun discussions with the firm in light of improved prospects and stability in revenues and future tax changes.

Brown & Brown's shares closed for the day down $1.14, or 6.44 percent, to $16.56 a share.