| Segment / Quarter | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|-------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Retail Segment ($ million)** | N/A | **713.5**  **[0000950170-23-015456_bro-20230331.htm:38]**  | **646**  **[0000950170-24-085353_bro-20240630.htm:38]**  | **586.0**  **[0000950170-23-055281_bro-20230930.htm:47]**  | N/A | **806**  **[0000950170-24-047140_bro-20240331.htm:21]**  | **646**  **[0000950170-24-085353_bro-20240630.htm:22]**  | **641**  **[0000950170-24-117782_bro-20240930.htm:39]**  |
| **Programs Segment ($ million)** | N/A | **229.8**  **[0000950170-23-015456_bro-20230331.htm:38]**  | **359**  **[0000950170-24-085353_bro-20240630.htm:41]**  | **278.2**  **[0000950170-23-055281_bro-20230930.htm:49]**  | N/A | **298**  **[0000950170-24-047140_bro-20240331.htm:21]**  | **359**  **[0000950170-24-085353_bro-20240630.htm:22]**  | **353**  **[0000950170-24-117782_bro-20240930.htm:42]**  |
| **Wholesale Brokerage Segment ($ million)** | N/A | **123.4**  **[0000950170-23-015456_bro-20230331.htm:38]**  | **159**  **[BRO_3394018_2]**  | **149.6**  **[0000950170-23-055281_bro-20230930.htm:52]**  | N/A | **142**  **[0000950170-24-047140_bro-20240331.htm:21]**  | **159**  **[0000950170-24-085353_bro-20240630.htm:22]**  | **171**  **[0000950170-24-117782_bro-20240930.htm:43]**  |
| **Services Segment ($ million)** | N/A | **44.3**  **[0000950170-23-015456_bro-20230331.htm:38]**  | N/A | **42.4**  **[0000950170-23-055281_bro-20230930.htm:43]**  | N/A | N/A | N/A | N/A |
| **Other ($ million)** | N/A | **5.0**  **[0000950170-23-015456_bro-20230331.htm:38]**  | N/A | N/A | N/A | **12**  **[0000950170-24-047140_bro-20240331.htm:21]**  | **14**  **[0000950170-24-085353_bro-20240630.htm:22]**  | **21**  **[0000950170-24-117782_bro-20240930.htm:23]**  |

613ff9c7a4a537b38b9a50af532f1643e0b57eda9ba0a81d933eb0e7c9c3bf1f

| Geographical Segment | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2024 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2023 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **U.S. (USD Million)** | **1,099**  **[0000950170-24-047140_bro-20240331.htm:9]**  | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| **U.K. (USD Million)** | **131**  **[0000950170-24-047140_bro-20240331.htm:9]**  | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| **Ireland (USD Million)** | **12**  **[0000950170-24-047140_bro-20240331.htm:9]**  | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| **Canada (USD Million)** | **9**  **[0000950170-24-047140_bro-20240331.htm:9]**  | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| **Other (USD Million)** | **7**  **[0000950170-24-047140_bro-20240331.htm:9]**  | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| **Total Revenue (USD Million)** | **1,258**  **[0000950170-24-047140_bro-20240331.htm:9]**  | N/A | N/A | N/A | N/A | N/A | N/A | N/A |

a4f04f3f4b57497e0318ca383f4703a2ded35048fd647892e09bcca0dd836098

Brown & Brown, Inc. is a diversified insurance agency, wholesale brokerage, insurance programs, and service organization that primarily operates in the property, casualty, and employee benefits areas **[0000950170-24-018890_bro-20231231.htm:82]** **[0000950170-24-018890_bro-20231231.htm:9]** **[0000950170-24-047140_bro-20240331.htm:20]** **[0000950170-24-085353_bro-20240630.htm:8]**. The company offers a wide range of insurance products and services to various entities, including commercial, public, and individual customers **[0000950170-24-018890_bro-20231231.htm:9]**. Their offerings include professional liability, flood coverage, and excess and surplus insurance lines **[0000950170-24-018890_bro-20231231.htm:9]** **[0000950170-24-024258_bro-ex99_1.htm:9]**.

1. **Retail** - Provides a broad range of insurance products and services to commercial, public, and quasi-public entities, as well as professional and individual customers **[0000950170-24-018890_bro-20231231.htm:9]**.
2. **Programs** - Acts as a managing general underwriter (MGU) offering professional liability, flood coverage, and other targeted products **[0000950170-24-018890_bro-20231231.htm:9]** **[0000950170-24-024258_bro-ex99_1.htm:9]**.
3. **Wholesale Brokerage** - Markets and sells excess and surplus commercial and personal lines insurance **[0000950170-24-018890_bro-20231231.htm:9]**.
4. **Services** - Previously contributed to the company by facilitating additional underwriting capacity and generating incremental revenues through capitalized captive insurance facilities **[0000950170-24-018890_bro-20231231.htm:82]** **[0000950170-24-085353_bro-20240630.htm:8]**.

dfdddcbbf150762252fffcc34d0602cf9cbb525713b84d9dc0a0e069aefd9225

Adjustments for Non-Cash Items (USD, millions)

Stock-Based Compensation (USD, millions)

Changes in Working Capital (USD, millions)

Capital Expenditures (USD, millions)

Proceeds from / Repayments of Debt (USD, millions)

Share Repurchases (USD, millions)

Dividend Payments (USD, millions)

Net Change in Cash (USD, millions)

afc50c2ff8499267b74b73de5c1d2fdf9574107c36185103808113170c2565c2

| Metric / Quarter               | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|--------------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Profit-sharing commissions** | N/A     | **46** **[0000950170-24-047140_bro-20240331.htm:30]** | **7** **[0000950170-24-085353_bro-20240630.htm:38]** | **27.3** **[0000950170-23-055281_bro-20230930.htm:39]** | **42.2** **[0000950170-24-006193_bro-ex99_1.htm:0]** | **46** **[0000950170-24-047140_bro-20240331.htm:30]** | N/A     | **27** **[0000950170-24-117782_bro-20240930.htm:31]** |
| **EBITDAC - Adjusted**         | **317.7** **[0000950170-24-006193_bro-ex99_1.htm:0]** | **398.2** **[0000950170-23-015456_bro-20230331.htm:38]** | **420** **[0000950170-24-085352_bro-ex99_1.htm:0]** | **370.3** **[0000950170-23-054661_bro-ex99_1.htm:0]** | **317.7** **[0000950170-24-006193_bro-ex99_1.htm:0]** | **466** **[0000950170-24-046504_bro-ex99_1.htm:0]** **[0000950170-24-046504_bro-ex99_1.htm:1]** | N/A     | **414** **[0000950170-24-117780_bro-ex99_1.htm:0]** |
| **EBITDAC Margin - Adjusted**  | **31.0** **[0000950170-24-006193_bro-ex99_1.htm:0]** | **35.7** **[0000950170-23-014164_bro-ex99_1.htm:1]** | **35.7** **[0000950170-24-085353_bro-20240630.htm:36]** | **34.7** **[0000950170-23-055281_bro-20230930.htm:45]** | **31.0** **[0000950170-24-006193_bro-ex99_1.htm:0]** | **37.0** **[0000950170-24-046504_bro-ex99_1.htm:1]** | **35.7** **[0000950170-24-085353_bro-20240630.htm:36]** | **34.9** **[0000950170-24-117780_bro-ex99_1.htm:0]** |
| **Organic Revenue growth rate**| **7.7** **[0000950170-24-006193_bro-ex99_1.htm:0]** | **8.6** **[0000950170-24-046504_bro-ex99_1.htm:0]** | **10.0** **[0000950170-24-085352_bro-ex99_1.htm:0]** | **9.6** **[0000950170-23-054661_bro-ex99_1.htm:0]** | N/A     | **8.6** **[0000950170-24-046504_bro-ex99_1.htm:0]** | N/A     | **9.5** **[0000950170-24-117780_bro-ex99_1.htm:0]** |

0dee2626b9bc4055f51daee924d80d3f2fa6a9278d46ceabf60b61c30adedbfc

8ebd6d8648ce0b8b965dcf3bff54fd930ebb6886ef31ebf8cf68a8bc5382c023

1. Given that your guidance for 50 to 100 basis points of adjusted EBITDAC margin improvement is highly dependent on storm activity, can you elaborate on the specific factors that could cause you to fall at the lower end of this range and how you plan to mitigate the potential impact of a severe storm season?  **[BRO_3394018_9]** **[BRO_3394018_12]** **[BRO_3394018_3]** 

2. Considering the continued pressure on casualty pricing and the challenges in obtaining significant umbrella limits from single carriers, especially for tougher classes like habitational, liquor-heavy establishments, and residential construction, how are you adapting your strategies to manage these risks and maintain profitability in these segments?  **[BRO_3394018_4]** **[BRO_3394018_6]** 

3. As you expand your capabilities to serve larger accounts, such as 5,000 to 10,000 life groups in employee benefits, what are the main obstacles you face against larger competitors, and how are you ensuring that your investment in these capabilities leads to sustainable market share gains?  **[BRO_3394018_21]** 

4. With some property accounts beginning to move from the E&S market back to the standard market when conditions allow, how significant is this trend for your business, and what measures are you taking to retain clients who might be considering a switch back to admitted markets?  **[BRO_3394018_27]** 

5. Given that your investment income was positively impacted by higher cash balances due to holding $500 million for upcoming debt repayment, how do you expect your investment income to trend post-repayment, and what steps are you taking to optimize returns in a changing interest rate environment?  **[BRO_3394018_18]** 

824cc2d25063cabaddc173752e59d29baa1e4da2be358b9d7e93b3acca42de3d

**Profit-sharing commissions**

**EBITDAC - Adjusted**

**EBITDAC Margin - Adjusted**

**Organic Revenue growth rate**

0463fc1fe06312a3693a8b00dbaf67a379c223a46e3edd6e6aee2c9041f1e931

### New Metrics in Q3 2025:
- Organic Growth for Q4 2024: No specific guidance; Q3 2024 performance (~5% organic growth for Retail) could be a baseline.  **[BRO_3404330_18]**   
- Investment Income for Q4 2024: Expected to decrease in Q4 2024 due to bond payoffs.  **[BRO_3404330_18]**   
- Cash Flow (FY 2024): 24%-26% of total revenue.  **[BRO_3404330_3]**   
- EBITDAC Margin (FY 2024): Anticipated to increase by at least 100 basis points compared to 2023.  **[BRO_3404330_3]**   

07def2dcc0771978ea7312fa8155904daebc9d5a4cfa3f9d072fc69172a4a693

2dffb4b86741459dc0e9fa6491b95627aabe0b9a10b1c64eb570079b13ed0a58

6d310488194546d12766d4dda20a5f86971734ec4be99c7aea10d212f628ea45

Retail

- Core Commissions and Fees

- Profit-sharing Contingent Commissions

- Investment Income

- Other Income, Net

Programs

Wholesale Brokerage

Services

Other

Total Revenue

e71fea0e6a555ac5330fc5c335b737d17febcf695e3cfba27f2a5dde6e4147df

| Name               | Position                                           | Start Date         | Short Bio                                                                                                                                                                                                 |
|--------------------|----------------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| J. Hyatt Brown     | Chairman of the Board                              | 1993               | J. Hyatt Brown has been serving as the **Chairman of the Board** of Brown & Brown, Inc. since **1993**. He was the company's CEO from 1993 to 2009 and its President from 1993 to December 2002  **[0000950170-24-018890_bro-20231231.htm:21]** **[0001193125-24-076607_d89828ddef14a.htm:9]** **[0001193125-23-076801_d389548ddef14a.htm:10]** .                                      |
| J. Powell Brown    | President, Chief Executive Officer                 | January 2007       | J. Powell Brown has been the **President** since **January 2007** and was named **CEO** in **July 2009**. He joined the company in 1995 and has held various roles, including Regional Executive Vice President  **[0000950170-24-018890_bro-20231231.htm:21]** **[0001193125-24-076607_d89828ddef14a.htm:9]** .                           |
| P. Barrett Brown   | Executive Vice President; President - Retail Segment | January 2020       | P. Barrett Brown was appointed as Executive Vice President and President of the Retail Segment in **January 2020**. He joined the company in 2000 and has held various roles, including Senior Vice President  **[0000950170-24-018890_bro-20231231.htm:21]** .                              |
| Stephen M. Boyd    | Executive Vice President; President - Wholesale Brokerage Segment | January 2021       | Stephen M. Boyd was appointed as Executive Vice President and President of the Wholesale Brokerage segment in **January 2021**. He joined Arrowhead in 1995 and has held various roles, including president of Arrowhead's Commercial division  **[0000950170-24-018890_bro-20231231.htm:22]** **[0000950170-23-004717_bro-20221231.htm:19]** . |
| Julie L. Turpin    | Executive Vice President, Chief People Officer     | March 2020         | Julie L. Turpin became the Chief People Officer in **March 2020** and was appointed as an Executive Vice President in May 2021. She has served in various capacities at Brown & Brown Absence Service Group since 2012  **[0000950170-24-018890_bro-20231231.htm:22]** **[0000950170-23-004717_bro-20221231.htm:19]** .                   |
| K. Gray Nester II  | Executive Vice President, Chief Information Officer | February 2021      | K. Gray Nester II became the Chief Information Officer in **February 2021** and was appointed as an Executive Vice President in October 2021. He previously held IT roles at BB&T Insurance Services  **[0000950170-24-018890_bro-20231231.htm:22]** **[0000950170-23-004717_bro-20221231.htm:19]** .                                      |
| J. Scott Penny     | Executive Vice President, Chief Acquisitions Officer | 2011               | J. Scott Penny has been the Chief Acquisitions Officer since **2011**. He joined the company in 1989 and has held various roles, including regional president and regional executive vice president  **[0000950170-24-018890_bro-20231231.htm:22]** **[0000950170-23-004717_bro-20221231.htm:19]** .                                       |
| Chris L. Walker    | Executive Vice President; President - National Programs Segment | 2014               | Chris L. Walker was appointed as President of the National Programs segment in **2014**. He joined the organization in 2003 and has been involved in business development strategies and product expansion  **[0000950170-24-018890_bro-20231231.htm:22]** **[0000950170-23-004717_bro-20221231.htm:19]** .                               |
| R. Andrew Watts    | Executive Vice President, Chief Financial Officer and Treasurer | March 4, 2014      | R. Andrew Watts joined as Executive Vice President and Treasurer in February 2014 and became the Chief Financial Officer effective **March 4, 2014**. He previously worked at Thomson Reuters and PricewaterhouseCoopers  **[0000950170-24-018890_bro-20231231.htm:23]** **[0000950170-23-004717_bro-20221231.htm:20]** .                 |
| Stephen P. Hearn   | Director                                           | August 9, 2024     | Stephen P. Hearn was appointed as a director on **August 9, 2024**. He has held various leadership roles in the insurance industry, including positions with The Ardonagh Group and BGC Partners, Inc.  **[0000950170-24-095047_bro-20240809.htm:1]** .                                       |

8d1d586f71d16100a57744c63f5ffee6602f81512495f16e274347369967cfaf

| Program Details          | Program 1            | Program 2            | Program 3            |
|--------------------------|----------------------|----------------------|----------------------|
| Approval Date            | July 18, 2014  **[0000950170-24-117782_bro-20240930.htm:52]**     | July 20, 2015  **[0000950170-24-117782_bro-20240930.htm:52]**     | May 1, 2019  **[0000950170-24-117782_bro-20240930.htm:52]**       |
| End Date/Duration        | N/A                  | N/A                  | N/A                  |
| Total Additional Amount  | $200.0 million  **[0000950170-24-117782_bro-20240930.htm:52]**    | $400.0 million  **[0000950170-24-117782_bro-20240930.htm:52]**    | $372.5 million  **[0000950170-24-117782_bro-20240930.htm:52]**    |
| Remaining Authorization  | N/A                  | N/A                  | $249.5 million  **[0000950170-24-117782_bro-20240930.htm:52]**    |
| Details                  | N/A                  | N/A                  | N/A                  |

1cd244ccd0d1e09a56332107b0aa4ea2e736b7eb24f8419664c298291c9ac4ba

United States

United Kingdom

Republic of Ireland

Canada

556d56458389c601b786eeebfd288d2df8bc170d7049ad2f02e8756b9530d9fe

| Name                  | Start Date | End Date | Reason for Change |
|-----------------------|------------|----------|-------------------|
| Deloitte & Touche LLP | 2002  **[0000950170-24-018890_bro-20231231.htm:125]**    | Present  | Current auditor   |

8b6f0a7afb5fe23d954884746095fab37534877a50400f80344807567baea71c

683dd026517ddb522e783b8ea156d3934f42a533ba6c1348e44b8fb7ceb63fd2

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

64d53cd8a95329e41fc237d4b7011f3fa7ec2383df57ecd1ccd01ab74688ed6a

Number of insurance intermediary operations acquired (count)

Organic Revenue growth rate - Consolidated (percentage)

Organic Revenue growth rate - Retail (percentage)

Organic Revenue growth rate - Programs (percentage)

Organic Revenue growth rate - Wholesale Brokerage (percentage)

87d09f2baeb598eec59f76ead75c25ccfd6dc5b139cca4002416b5808a6fcb04

| Year | Amount Due (in millions) | Debt Type | Interest Rate | % of Total Debt |
|------|--------------------------|-----------|---------------|-----------------|
| 2024 | $6 **[0000950170-24-117782_bro-20240930.htm:46]** | Current portion of long-term debt | N/A | 0.2% = (6 / 3,592) * 100 **[0000950170-24-117782_bro-20240930.htm:46]** **[0000950170-24-117782_bro-20240930.htm:17]** |
| 2025 | $150 **[0000950170-24-117782_bro-20240930.htm:17]** | 3-year term loan facility | SOFR + up to 1.625% **[0000950170-24-117782_bro-20240930.htm:17]** | 4.2% = (150 / 3,592) * 100 **[0000950170-24-117782_bro-20240930.htm:17]** **[0000950170-24-117782_bro-20240930.htm:46]** |
| 2026 | $175 **[0000950170-24-117782_bro-20240930.htm:17]** | 5-year term loan facility | SOFR + up to 1.750% **[0000950170-24-117782_bro-20240930.htm:17]** | 4.9% = (175 / 3,592) * 100 **[0000950170-24-117782_bro-20240930.htm:17]** **[0000950170-24-117782_bro-20240930.htm:46]** |
| 2027 | $375 **[0000950170-24-117782_bro-20240930.htm:17]** | 5-year term loan facility | SOFR + up to 1.750% **[0000950170-24-117782_bro-20240930.htm:17]** | 10.4% = (375 / 3,592) * 100 **[0000950170-24-117782_bro-20240930.htm:17]** **[0000950170-24-117782_bro-20240930.htm:46]** |
| 2029 | $350 **[0000950170-24-117782_bro-20240930.htm:17]** | 4.500% senior notes | 4.500% **[0000950170-24-117782_bro-20240930.htm:17]** | 9.7% = (350 / 3,592) * 100 **[0000950170-24-117782_bro-20240930.htm:17]** **[0000950170-24-117782_bro-20240930.htm:46]** |
| 2031 | $700 **[0000950170-24-117782_bro-20240930.htm:17]** | 2.375% senior notes | 2.375% **[0000950170-24-117782_bro-20240930.htm:17]** | 19.5% = (700 / 3,592) * 100 **[0000950170-24-117782_bro-20240930.htm:17]** **[0000950170-24-117782_bro-20240930.htm:46]** |
| 2032 | $598 **[0000950170-24-117782_bro-20240930.htm:17]** | 4.200% senior notes | 4.200% **[0000950170-24-117782_bro-20240930.htm:17]** | 16.6% = (598 / 3,592) * 100 **[0000950170-24-117782_bro-20240930.htm:17]** **[0000950170-24-117782_bro-20240930.htm:46]** |
| 2034 | $599 **[0000950170-24-117782_bro-20240930.htm:17]** | 5.650% senior notes | 5.650% **[0000950170-24-117782_bro-20240930.htm:17]** | 16.7% = (599 / 3,592) * 100 **[0000950170-24-117782_bro-20240930.htm:17]** **[0000950170-24-117782_bro-20240930.htm:46]** |
| 2052 | $592 **[0000950170-24-117782_bro-20240930.htm:17]** | 4.950% senior notes | 4.950% **[0000950170-24-117782_bro-20240930.htm:17]** | 16.5% = (592 / 3,592) * 100 **[0000950170-24-117782_bro-20240930.htm:17]** **[0000950170-24-117782_bro-20240930.htm:46]** |

bdad5573e08a8549fbd488643b5cdf4e53450774ed9750c0c0132b3036e7a72b

- The company is experiencing **declining rates in property and professional liability** within the wholesale brokerage segment, resulting in a shift from tailwinds to headwinds in two out of three areas, which may negatively impact revenue growth.  **[BRO_3394018_7]** ,  **[BRO_3394018_8]**
- **Increased loss activity is impacting profit sharing and contingencies**, particularly in auto, which has been under pressure for a while and is not expected to abate soon, potentially leading to lower earnings in the Retail segment.  **[BRO_3394018_16]**
- The company's **recent elevated organic growth rates may not be sustainable**, as they acknowledge potential pressure on larger accounts and do not expect to modify their long-term mid-single-digit growth expectations, indicating a possible slowdown in growth momentum.  **[BRO_3394018_7]** ,  **[BRO_3394018_20]**

ffc785924a2a957d087bf503cecfb4f4a63004008526b17748d9dd9c9b7e53f3

- **Brown & Brown maintains a strong and active M&A pipeline**, with numerous opportunities and expectations for continued consolidation over the next **3 to 7 years**. The company is confident in its ability to participate in M&A activities due to its cultural fit and financial sense.  **[BRO_3380320_20]**
- **The company is experiencing significant organic growth across key segments**, including Retail and Employee Benefits, with an emphasis on winning net new business and competing on accounts of all sizes domestically. Management is extremely pleased with the performance and growth in these areas.  **[BRO_3380320_11]** **[BRO_3380320_15]**
- **Brown & Brown delivers some of the best underwriting results for carrier partners**, enabling participation in contingent commissions and driving strong performance in the Programs segment. The company sees good growth opportunities ahead in Programs and continues to attract interest from carrier partners.  **[BRO_3380320_18]** **[BRO_3380320_13]**

87c7b2d1a265a022a77ffae91625aa3894c7e819974083396fce50e0ad4c25c7

- **Potential impact from storm claims could negatively affect future margins.** The company anticipates that storm claim activity, likely in the third or fourth quarter, could adversely affect margins and financial results. They routinely budget for such events but acknowledge the uncertainty in their impact.  **[BRO_3380320_14]** ,  **[BRO_3380320_5]** ,  **[BRO_3380320_15]**
- **Non-recurring benefits inflated earnings in the Programs segment.** The Programs segment benefited from a $7 million contingent commission related to finalizing prior year estimates, which will not recur in the first quarter of next year. This suggests that current earnings may be elevated due to non-recurring items.  **[BRO_3380320_8]** ,
- **Margin contraction in the Retail segment indicates potential challenges.** The Retail segment experienced a year-over-year margin contraction. While management advises against viewing one quarter as a trend, this contraction may reflect underlying challenges in that segment.  **[BRO_3380320_21]**

591e5f47f2f6fb18bfd31cb885668470dbaaa2c67d8565cfabd41d297544bfff

- **Brown & Brown has significantly expanded its capabilities over the past decade, now successfully serving upper-middle market and large accounts, especially in employee benefits. This expansion has enabled them to win more market share and write new business.**  **[BRO_3394018_21]** ,  **[BRO_3394018_26]**
- **The company is executing well, delivering strong net new business across all segments by leveraging their collective capabilities, resulting in three quarters of double-digit organic growth out of the last six quarters.**  **[BRO_3394018_21]** ,  **[BRO_3394018_7]**
- **Brown & Brown is well-positioned for future growth, with a robust M&A pipeline and strong capital position, and sees positive prospects ahead.**  **[BRO_3394018_27]**

55bc12235bbaefc55cbe5831fef8b43eae639c9a284cdea20edb768fda2202ce

1. **Casualty Pricing Discipline**  
   **Q:** Is casualty pricing pressure now worse than before?  
   **A:** Powell Brown stated that in his career since **1990**, this is the broadest impact of pricing discipline in casualty he recalls. The industry is showing unprecedented discipline in maintaining pricing, especially in challenging classes like habitational properties, establishments with high liquor consumption, and residential construction. This discipline has made it harder to obtain significant umbrella limits from single carriers, requiring clients to build desired limits with multiple carriers. ** **[BRO_3394018_6]** **[BRO_3394018_13]** **

2. **Property Pricing Trends**  
   **Q:** How did property pricing affect your business this quarter?  
   **A:** Property rates have begun to **decrease** for most accounts, except those with significant losses. Even poorly constructed properties are seeing rate reductions. This trend was anticipated after several years of high rates, which reached some of the highest levels ever. Future pricing will depend on the impact of the storm season. **[BRO_3394018_5]**

3. **Margin Expansion Factors**  
   **Q:** What influences your margin expansion guidance?  
   **A:** The projected **50 to 100 basis points** of margin expansion depends on several factors: the outlook for contingents, the mix and growth of different business lines, and storm activity affecting the flood business and captives. They budget for storms each year; if storms do not occur, it results in upside to margins. ** **[BRO_3394018_9]** **[BRO_3394018_10]** **[BRO_3394018_13]** **

4. **Impact of Storm Season on Margins**  
   **Q:** Does your margin guidance account for potential storms?  
   **A:** Yes, even in best-case scenarios, they model some storms into margin guidance. Storm activity impacts the captives and flood business, particularly in the third quarter. If storms do not occur, it provides upside potential to margins. ** **[BRO_3394018_10]** **[BRO_3394018_13]** **

5. **Sustainability of Organic Growth**  
   **Q:** Is your current organic growth rate sustainable?  
   **A:** The company feels confident about the amount of new business and attributes success to strong execution and a unique culture. While acknowledging market pressures in certain regions and lines, they emphasize long-term thinking and believe their ownership culture, with **22%** owned by teammates, contributes to consistent performance. **[BRO_3394018_7]**

6. **Commissions on Property Business**  
   **Q:** Are you seeing changes in property commission percentages?  
   **A:** While they may adjust commissions to secure accounts, the company believes it is being compensated fairly. Pricing is paramount, and there isn't significant compression from downward pressure on rates. The focus remains on offering the best price to customers rather than on commission levels. **[BRO_3394018_15]**

7. **Programs Segment Growth Drivers**  
   **Q:** What's driving growth in the Programs segment?  
   **A:** Growth is primarily driven by a handful of programs that have been expanding consistently over a long period. These long-standing programs continue to be significant contributors to growth, a common trend within the industry. **[BRO_3394018_14]**

3198017ff80606202267821d0d448f7f9c0faa8149c4ce0f738dfacb88cdabc2

1. **Reinsurance Changes Impact**  
   **Q:** How do reinsurance changes affect P&L and organic growth?  
   **A:** The reinsurance changes had a **$19 million** impact on P&L, reducing expected losses from **$25 million** to **$15–$20 million**. This will drive **incremental organic growth of $15–$20 million** in 2024. ( **[BRO_3370637_7]** ,  **[BRO_3370637_14]** ,  **[BRO_3370637_18]** )

2. **Organic Growth Outlook**  
   **Q:** Will moderating rate increases lower organic growth?  
   **A:** Historically, **two-thirds** of our growth comes from exposure units and **one-third** from rate. While rate impacts vary by segment and location, our focus on new business activity supports a good organic growth profile for 2024, despite moderating rates. ( **[BRO_3370637_11]** )

3. **Client Sentiment and Macro Outlook**  
   **Q:** How are clients feeling about the macro environment?  
   **A:** Clients are showing a more **optimistic** view despite global challenges. Inflationary pressures are **trending down**, and while some have paused major capital investments, overall sentiment is cautiously optimistic. ( **[BRO_3370637_20]** ,  **[BRO_3370637_24]** )

4. **Impact of International Acquisitions**  
   **Q:** How did international deals affect Retail's growth and margins?  
   **A:** The businesses acquired in England since mid-2022 are performing **at or above expectations**, similar to our domestic Retail business. We continue to be pleased and pursue further acquisitions. ( **[BRO_3370637_8]** )

5. **Benefits Business Performance**  
   **Q:** How did the benefits business perform and outlook for Q1?  
   **A:** We are **very pleased** with the benefits business performance in Q4 and for the year. The business is working well, contributing positively to our results. ( **[BRO_3370637_13]** ,  **[BRO_3370637_16]** )

6. **Impact of Storms on Contingent Commissions**  
   **Q:** How do storms affect contingent commissions?  
   **A:** The impact depends on the **magnitude of the storm**. We had a **great year** in profit-sharing, but future impacts are hard to estimate. We anticipate some impact but can't determine exact figures. ( **[BRO_3370637_10]** )

7. **Free Cash Flow Expectations**  
   **Q:** What is the outlook for free cash flow conversion?  
   **A:** For 2024, we expect cash flow from operations to be **22%–24%** of revenue, a similar level to 2023. This feels like a good range for us. ( **[BRO_3370637_21]** )

8. **Buyer Behavior to Rate Increases**  
   **Q:** Are buyers changing terms due to rate exhaustion?  
   **A:** Buyers are adjusting terms like deductibles and limits in response to rate increases. It's more about the **absolute dollars** paid rather than just rates. This behavior isn't confined to one customer type or region. ( **[BRO_3370637_22]** )

9. **Standard Markets and E&S Risks**  
   **Q:** Are standard markets encroaching on E&S risks?  
   **A:** No, standard markets are evaluating their books, especially cat exposure. Some admitted carriers are backing off unprofitable programs. We expect more changes as markets review profitability. ( **[BRO_3370637_25]** )

10. **Impact of Inflation**  
    **Q:** Is moderating inflation a headwind to organic growth?  
    **A:** Textbook answer is yes, but in practice, it's **neutral**. Over the long term, growth is **two-thirds exposure units**, **one-third rate**. We focus on executing and selling new business regardless of inflation. ( **[BRO_3370637_24]** )

11. **Noncash Intangible Amortization Adjustment**  
    **Q:** Impact of adjusting intangible amortization like peers?  
    **A:** If we adjusted noncash intangible amortization in 2023, adjusted earnings would increase by **$0.45**. ( **[BRO_3370637_12]** )

12. **Captive Revenue Outlook**  
    **Q:** Update on captive revenue and growth outlook?  
    **A:** We generated over **$25 million** last year and about **$30 million** in 2023 from captives. We're extremely pleased with the returns but not necessarily planning to do more captives. ( **[BRO_3370637_23]** )

13. **Company-Owned Life Insurance Impact**  
    **Q:** What was COLI's impact on quarterly results?  
    **A:** COLI was a drag of about **150 basis points** on S&R as a percentage of revenue this quarter, compared to about **60 basis points** last year. Impact on margins is almost zero. ( **[BRO_3370637_17]** )

14. **Personal Lines Impact on Growth**  
    **Q:** Are personal lines boosting organic growth?  
    **A:** Yes, personal lines are having a **positive impact** on organic growth across all three major segments. Previously a headwind in Wholesale, it's now a growing segment. ( **[BRO_3370637_6]** )

15. **Plans for Services Moving to Retail**  
    **Q:** Will you keep the Services businesses moving to Retail?  
    **A:** Yes, we anticipate **holding onto those businesses**. ( **[BRO_3370637_19]** )

16. **Investment Income Outlook**  
    **Q:** What's the outlook for investment income and margins?  
    **A:** We haven't given an outlook on investment income. Factors like capital flows can impact it, and it's subject to interest rate movements, which we won't predict. ( **[BRO_3370637_26]** )

f2a9bab0136c10817baf9199632fea579efeab8f3464d890dc9ae85868b9c8ab

1. **Retail Organic Growth**  
   **Q:** What affected Retail's organic growth in Q3?  
   **A:** Incentive commissions were down, and nonrecurring one-time revenues like bonds didn't occur, impacting organic growth in the Retail segment in Q3. However, management feels good about the Retail business and doesn't believe one quarter makes a trend.  **[BRO_3404330_5]** **[BRO_3404330_7]** 

2. **Retail Growth Outlook**  
   **Q:** Is 5% growth a baseline for Retail in Q4?  
   **A:** While management doesn't give guidance, they feel good about the business and expect factors affecting Q3 to be similar in Q4, unless something unusual happens.  **[BRO_3404330_7]** 

3. **Programs Segment Growth**  
   **Q:** Is Programs' exceptional growth sustainable?  
   **A:** The Programs business has experienced **exceptional growth** due to continued interest in the space, which represents **$85–$100 billion** in premiums in the U.S. While sustaining **20% growth** long-term is high, management believes the Programs space will continue to grow nicely.  **[BRO_3404330_9]** 

4. **Impact of CAT Rates on Wholesale**  
   **Q:** Can wholesale sustain growth with flat to down 10% CAT rates?  
   **A:** There is interest from risk bearers to keep rates closer to flat, but aggressive markets like London may add pressure. The product mix is balanced, and while rate decreases can impact growth, management is monitoring market discipline in Q4.  **[BRO_3404330_6]** 

5. **Pressure on Contingent Commissions**  
   **Q:** Which lines are causing pressure on contingents?  
   **A:** Higher loss ratios at carrier partners are causing pressure, primarily in **auto lines**, both personal and commercial, due to increased frequency and severity of claims. This trend is expected to continue.  **[BRO_3404330_15]** 

6. **Investment Income Increase**  
   **Q:** What drove investment income up in Q3?  
   **A:** Holding the **$600 million** in bonds issued in Q2 until paying off September bonds added **$6–$7 million** in interest income for the quarter. This increase won't continue, and investment income will decrease in Q4.  **[BRO_3404330_18]** 

7. **Underwriter Compensation**  
   **Q:** Are underwriters at Brown compensated more than at carriers?  
   **A:** Compensation is typically different, often including cash, base plus bonus, and equity. Generally, underwriters can be compensated more than what a carrier can pay.  **[BRO_3404330_10]** 

8. **Employee Benefits Outlook**  
   **Q:** What's the outlook for the employee benefits business?  
   **A:** Management is excited about opportunities in employee benefits, having invested in capabilities to handle customers of all sizes. They are actively seeking additional firms to join but are confident in organic growth regardless.  **[BRO_3404330_16]** 

9. **Impact of NCI on Programs**  
   **Q:** What's the impact of selling captives on Programs' margins?  
   **A:** Selling a portion of the captives and consolidating through noncontrolling interest has **no impact** on organic growth or margins. Accounting rules require reporting on a gross basis.  **[BRO_3404330_8]** 

10. **Revenue from Onboarding Customers**  
    **Q:** Is the $15 million from onboarding new customers recurring?  
    **A:** The **$15 million** represents about six months of revenue and will be spread out during 2025, mostly in the first half. It won't recur in Q3 next year, affecting comparables.  **[BRO_3404330_11]** 

11. **Investment in Teammates**  
    **Q:** Was increased spending on teammates deliberate?  
    **A:** The investment was opportunistic. When they find the right people, they invest in them, anticipating growth from these investments in future quarters.  **[BRO_3404330_19]** 

12. **Casualty Pricing Trends**  
    **Q:** Have casualty pricing trends changed?  
    **A:** There continues to be pressure on casualty lines—both primary and excess, admitted and non-admitted. Rate pressure is expected to continue in casualty, general liability, excess liability, and auto.  **[BRO_3404330_20]** 

13. **Advocacy Business Trends**  
    **Q:** Any changes in Social Security claim adjudications?  
    **A:** No significant changes; the advocacy business remains similar to recent years, with good inflow but limited progression through the process.  **[BRO_3404330_12]** 

f1f77bba9d97305772a684fbbfff3d3ba4d85981ac39906576b9c4f082f601ca

1. **Margin Outlook**  
   **Q:** Does the sale improve National Programs margins?  
   **A:** Yes, the divestiture of claims processing businesses in Q4 has led to a **sustainable margin improvement** in National Programs, which should flow through to coming quarters.  **[BRO_3380320_5]** **[BRO_3380320_8]** 

2. **Property CAT Pricing**  
   **Q:** Can increased demand offset pricing declines?  
   **A:** Downward pressure on property CAT pricing is expected due to increased capacity and buyer fatigue after years of rate increases. It's uncertain if increased demand will fully offset pricing declines, but the company continues to see opportunities in this changing market.  **[BRO_3380320_6]** **[BRO_3380320_7]** **[BRO_3380320_13]** 

3. **E&S Market Trends**  
   **Q:** Is E&S premium growth slowing?  
   **A:** It's premature to conclude that E&S premium growth is slowing. Market conditions vary, and while standard markets may show more appetite, the company remains optimistic about E&S opportunities and is seeing accounts continue to move into the E&S marketplace.  **[BRO_3380320_16]** **[BRO_3380320_17]** 

4. **M&A Environment**  
   **Q:** Will higher rates affect M&A activity?  
   **A:** Despite higher interest rates, the M&A environment remains highly competitive. Some leveraged competitors may become less active, but new participants are entering, and the company expects numerous opportunities ahead.  **[BRO_3380320_19]** **[BRO_3380320_20]** 

5. **Cash Flow Guidance**  
   **Q:** Why is cash flow conversion lower?  
   **A:** The cash flow from operations conversion ratio is currently **22–24%**, down from the historical **24–26%** due to higher interest expenses and incremental taxes. The company anticipates a return to normal levels by next year.  **[BRO_3380320_10]** 

6. **Contingent Commissions Growth**  
   **Q:** What's driving contingent commissions growth?  
   **A:** Growth in contingent commissions is driven by strong underwriting performance and lower storm activity, reflecting the company's ability to deliver profitable results for carrier partners.  **[BRO_3380320_18]** 

7. **Casualty Pricing Trends**  
   **Q:** Is liability pricing increasing?  
   **A:** Yes, there is upward pressure on casualty and liability rates due to adverse development in recent accident years. This trend may continue over the next several years.  **[BRO_3380320_23]** 

8. **Programs Segment Growth**  
   **Q:** What's driving strong Programs growth?  
   **A:** The Programs segment benefits from disciplined underwriting, new business, and strong carrier relationships. Although competition is increasing, growth prospects remain positive.  **[BRO_3380320_13]** 

9. **Full-Year Margin Outlook**  
   **Q:** Will margins exceed expectations?  
   **A:** The company remains confident in its guidance of slightly up margins for the full year, despite a strong first quarter and no changes to contingent commission expectations.  **[BRO_3380320_14]** 

10. **International Growth**  
    **Q:** How is growth outside the U.S.?  
    **A:** International operations are performing similarly to domestic businesses, with satisfactory growth trends in Europe and Canada.  **[BRO_3380320_21]** 

b5928fd1785a08147dd175c0bbcb01da20e4fc9149e703f2b38bb7e7ee865860

- **Brown & Brown has set a new intermediate goal of achieving $8 billion in annual revenues**, leveraging their history of effectively doubling revenues every few years. They have grown from $1 billion to $2 billion in 7 years, and from $2 billion to $4 billion in 5 years, demonstrating their capability to reach ambitious targets.  **[BRO_3370637_26]**
- **International acquisitions are performing at or above expectations**, particularly businesses acquired in England since mid-2022. These acquisitions contribute positively to Retail growth and margins, and the company continues to pursue further acquisitions overseas, expanding their footprint and capabilities.  **[BRO_3370637_8]**
- **The employee benefits segment represents about 35% of the Retail business** and has been a focus of investment over the last decade. Brown & Brown is pleased with their ability to serve customers across all segments and sees continued success and growth potential in this area.  **[BRO_3370637_15]**

c21b57202bae0f787d9c96906c02482b49b5ec33b1f30330c1ce7e09306da5f1

- **Moderation in rate increases may lead to lower organic growth in 2024** compared to 2023, potentially impacting revenue growth across Brown & Brown's footprint.  **[BRO_3370637_11]**
- **Free cash flow conversion was below 24% in 2023**, with guidance for 2024 remaining flat at **22% to 24%**, indicating no expected improvement in cash flow conversion.  **[BRO_3370637_21]**
- A **$19 million charge related to changing reinsurance** for one of their captives decreased organic growth by approximately **9 percentage points** in Programs for Q4 2023, highlighting challenges in managing reinsurance costs and their impact on margins.  **[BRO_3370637_2]** **[BRO_3370637_7]**

e0990667e6eced5c1ffc87377f34bb218d69259a4d7b1995f42c3704216f1ab9

- **Brown & Brown is experiencing strong organic growth driven by writing more new business and strong execution across Retail and Wholesale segments.**  **[BRO_3361747_9]**
- **The company has a strong M&A pipeline with good acquisition opportunities, allowing for future growth through strategic acquisitions, despite fewer financial buyers in the market.**  **[BRO_3361747_13]**
- **The Services segment is showing sustainable growth due to expanded customer relationships and new relationships, indicating recurring revenue opportunities.**  **[BRO_3361747_17]**

30e69f72916de1c0338850b0b8759d6268265f1a38226abfe29a46b5c5213eb9

- **Margin contraction expected in Q4 due to absence of prior year's one-off revenues, specifically the $7 million incentive bonus and $8 million of claims revenue associated with Hurricane Ian.**  **[BRO_3361747_12]**
- **Services segment growth may not be sustainable as it was driven by one-time claims processing revenue, and future performance is unpredictable on a quarterly basis.**  **[BRO_3361747_17]**
- **Ongoing expense pressures from high cost of talent, inflationary pressures, and stock-based compensation acting as a headwind year-over-year, potentially impacting margins.**  **[BRO_3361747_10]**

9349e1fc627daa22d6cb1d862a44e102c540a131975f9a3c9093de3f16fe9685

Brown & Brown Inc (BRO)

Financials