NU Online News Service, July 19, 2:49 p.m. EDT
Two of the three insurance-brokerage firms reporting second quarter financial results this week showed increases in revenues and organic growth as the economy improves and insurers push for premium increases.
Brown & Brown reports second quarter net income rose 15 percent over the same period last year, or more than $5 million, to $42.5 million. Revenues were up 18 percent, or $44 million, to $291 million.
For the first six months of the year, net income is up 10 percent, or $8.6 million, to $92 million. Revenues increased 17 percent, or $84.4 million, to more than $593 million.
Organic growth for the second quarter is up 3.2 percent.
During a conference call with financial analysts, Cory Walker, Brown & Brown's chief financial officer notes that the firm has now seen two quarters of positive growth and says, “We now have a trend.”
J. Powell Brown, president and chief executive officer of the firm, says, overall, insurers are pricing premiums upward with most of the pressure on workers' compensation and property rates.
The wholesale markets are seeing some business move out of the standard markets, says Brown, but “it's not a gusher yet.”
At Winston-Salem, N.C.-based bank-owned insurance broker BB&T, insurance income rose in the second quarter by 31 percent, or $94 million, to $393 million compared to the same period a year ago. The primary driver for the increase was the acquisition of Crump insurance, which added approximately $77 million in revenues to the results.
The bank says the insurance segment generated net income of $66 million, an increase of $20 million over the second quarter of 2011. The segment benefited from higher commissions on its property and casualty business, life insurance and employee-benefit business “as insurance pricing continues to firm.”
Kelly King, BB&T's chairman and CEO, told analysts that insurance showed strong results with 4 percent organic growth.
He calls the acquisition of Crump in April “a homerun.”
“Everything we see is better than we thought it would be,” says King, complimenting both the business and people who have joined the company.
San Francisco-based Wells Fargo says second quarter insurance income was down 8 percent, or $46 million, to $522 million compared to the same period last year.
For the first six months, insurance income is down 3 percent, or $30 million, to $1.04 billion.
The company did not provide additional commentary on the insurance segment and did not discuss the segment's result during a conference call with analysts.
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