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Brown & Brown (BRO) Acquires Brownlee Agency, Boosts Portfolio

Brown & Brown, Inc.’s BRO subsidiary acquired substantially all assets of Brownlee Agency, Inc. The addition of Brownlee Agency will boost Brown & Brown’s presence in Georgia.

Tifton, GA-based, Brownlee Agency, founded in 1974, is an independent, full-service insurance agency. It offers a wide range of property and casualty insurance products and services to customers throughout Georgia. The company intends to help clients protect their companies through comprehensive and cost-effective programs of insurance protection.

The addition of Brownlee Agency will enable Brown & Brown to expand geographically within Georgia. The buyout will also expand the insurance broker’s capabilities by adding specialized talent and product offerings to meet the needs of new and existing customers. This marks the second acquisition by Brown and Brown in the first quarter of 2023.

BRO and its subsidiaries continuously make strategic acquisitions to expand globally, add capabilities and boost operations. These strategic buyouts help the company increase commissions and fees, which, in turn, drive revenues.

Brown & Brown’s impressive growth is driven by organic and inorganic means across all segments. The insurance broker closed seven acquisitions in the first quarter of 2023, with annual revenues of approximately $11 million.

BRO intends to make consistent investments in boosting organic growth and margin expansion. Solid earnings have allowed the company to expand its capabilities with the buyouts extending the company’s geographic footprint.

Consistent operational results have been aiding Brown & Brown in generating solid cash flows for deployment in strategic initiatives. The company has maintained a strong liquidity position, with $563.5 million of cash and cash equivalents.

Given the insurance industry’s adequate capital level, player like Arthur J. Gallagher & Co. AJG has been pursuing strategic mergers and acquisitions.

Arthur J. Gallagher completed the acquisition of Woodland Hills, CA-based Leavitt Insurance Services of Los Angeles in May 2023. The acquisition is expected to strengthen its capabilities in the Southwest U.S. region.

AJG’s merger and acquisition pipeline is quite strong, with about $300 million of annualized revenues, associated with about 45 term sheets either agreed upon or being prepared. A solid capital position supports AJG in its growth initiatives. It, thus, remains focused on continuing its tuck-in mergers and acquisitions.

Price Performance

Shares of this Zacks Rank #2 (Buy) insurance broker have gained 15.4% year to date, outperforming the industry’s growth of 7.8%. Moreover, sustained operational performance, higher commissions and fees, and a sturdy capital position will help the broker retain the momentum.


Zacks Investment Research
Zacks Investment Research

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Other Stocks to Consider

Some other top-ranked insurers from the insurance industry are Erie Indemnity Company ERIE and Ryan Specialty Holdings Inc. RYAN.

The Zacks Consensus Estimate for Erie Indemnity’s 2023 earnings per share indicates a year-over-year increase of 26.1%. In the year-to-date period, ERIE has lost 6.3%.

The Zacks Consensus Estimate for ERIE for 2023 has moved 3.8% north in the past 30 days. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Ryan Specialty’s 2023 earnings per share indicates a year-over-year increase of 13%. In the year-to-date period, RYAN has gained 4.3%.

RYAN’s earnings surpassed estimates in three of the last four quarters and missed in one, the average beat being 2.67%. The company carries a Zacks Rank #2 at present.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Arthur J. Gallagher & Co. (AJG) : Free Stock Analysis Report

Brown & Brown, Inc. (BRO) : Free Stock Analysis Report

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Ryan Specialty Holdings Inc. (RYAN) : Free Stock Analysis Report

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