Brown & Brown's Q1 2025: Key Contradictions in Captive Business Growth, Retail Performance, and Economic Impact

Captive business growth, retail organic growth, impact of economic growth and rate increases, pricing discipline and market conditions, flood business and political gridlock in Washington, D.C. are the key contradictions discussed in Brown & Brown's latest 2025Q1 earnings call.



Strong Financial Performance:
- Brown & Brown, Inc. reported revenues of $1.4 billion for Q1 2025, growing 11.6% in total and 6.5% organically compared to the same period in the prior year.
- Adjusted earnings per share grew over 13% to $1.29.
- The growth was driven by dedicated team performance and acquisitions, with 13 acquisitions completed with estimated annual revenues of $36 million.

Macroeconomic Uncertainty and Market Impact:
- The company noted that economic expansion is influenced by factors such as inflation, tariffs, and interest rates, which lead to some businesses becoming more cautious.
- Despite this, companies are still hiring and investing in their business, and economic stability prevails.
- Rate increases for most lines continued, but rates for CAT property moderated significantly due to availability of capital.

Insurance Market and Pricing Trends:
- Non-CAT property pricing saw increases in the range of flat to up 5%, similar to previous quarters.
- Casualty rates continued to rise, with increases in primary and excess layers, but excess casualty rates decreased slightly.
- CAT property rates declined significantly, with decreases ranging from 10% to 25% due to increased capital availability.

Segmental Performance:
- The Retail segment achieved 4.1% organic growth, with a focus on managing expenses and seasonality impacting revenue and profit recognition.
- Programs segment saw 13.6% organic growth, driven by new business retention and exposure unit expansion, despite rate decreases impacting CAT property.
- Wholesale Brokerage segment showed 6.7% organic growth, with increases across all lines, offset by downward pressure on CAT property rates.