Brown & Brown Q4 Earnings Call Highlights

Watts said the company paid down $100 million on its revolving credit facility during the quarter and repurchased $100 million of common stock, describing the approach as a “balanced” deployment of capital.

Accession acquisition: Q4 revenue below guidance, integration underway

Watts said Accession contributed approximately $405 million of revenue in the fourth quarter, below prior guidance of $430 million to $450 million. He attributed the shortfall to refining revenue recognition estimates by quarter, noting that the revisions “do not change our annual expectations for the business.”

Management said the lower-than-guided Accession revenue reduced adjusted EPS by about $0.05 for the quarter and lowered total-company margins by roughly 200 basis points due to the phasing of revenue and profit. Watts also said Accession’s seasonality is now expected to be “substantially equally weighted between the first and second half of the year,” with the second half more heavily weighted to the third quarter.

On integration, Watts said the company expects efforts to be completed by the end of 2028 and anticipates EBITDA synergies of approximately $30 million to $40 million in 2026.

Segment performance and insurance pricing commentary

In Retail, organic growth was 1.1% in the fourth quarter. Brown said results were pressured by items including multi-year policies written in the fourth quarter of 2024, larger-than-anticipated one-time incentive commission adjustments, and certain project work delayed into 2026. Combined, those factors reduced organic growth by 100 to 150 basis points, he said. Retail total revenue rose 44.4% year over year, primarily from acquisitions. Retail adjusted EBITDAC margin declined 120 basis points to 26.6%, which Watts said was due to Accession’s quarterly phasing.

Specialty Distribution organic revenue declined 7.8% in the fourth quarter, primarily due to $28 million of flood claims processing revenue recognized in the prior-year quarter, Brown said. He also cited a slightly larger-than-expected decline in cat property rates and some binding authority business shifting back into the admitted market. Specialty Distribution total revenue rose 27%, driven by Accession and higher contingent commissions. Specialty Distribution adjusted EBITDAC margin fell 60 basis points to 41.3% due to the flood comparison and Accession’s lower margin profile, Watts said.

Brown provided a detailed view of insurance market conditions, including:

• Employee benefits: medical costs up 7% to 9% and pharmacy costs up over 10%, with no sign of slowing, he said.
• Admitted P&C: generally flat to up 5%; workers’ compensation flat to down 3% (with a few states increasing rates).
• Non-cat property: down 5% to up 5%, depending on loss experience; blended relatively flat.
• Casualty: up 3% to 6% on primary layers, with excess increasing more.
• E&S property: generally down 15% to 30%, similar to the third quarter.

In Q&A, management said a modest moderation in primary casualty rate increases was consistent with a market becoming more competitive, while emphasizing they were not signaling casualty rates turning negative. The company also discussed a potential cyclical shift of some “tweener” accounts from E&S back to admitted markets, particularly in smaller binding authority business, while still viewing the longer-term trend as more assets moving into E&S for flexibility in terms and pricing.

2026 outlook: contingents, margins, tax rate, and competitor-related departures

Watts said contingent commissions are “better to assess…on an annual basis,” noting they represented over $250 million of revenue last year. For 2026, the company anticipates Specialty Distribution contingent commissions will be down about $15 million due to certain one-time adjustments in 2025, with the impact likely spread between the third and fourth quarters, and subject to storm activity.

For Specialty Distribution, Watts said the company expects organic growth to be “somewhat flat” in the first quarter due to flood claims processing revenue in the prior-year first quarter and continued cat property rate decreases. Management expects momentum to improve later in the year as Specialty Distribution businesses that came with Accession—described as having “very, very little cat”—contribute.

For Retail, Watts said the company expects “modest improvement” in 2026 organic growth versus the 2.8% reported for 2025, reiterating that management typically views Retail as a “mid to low single digit” organic growth business in a normal pricing environment and stable economy.

On margins, Watts projected lower investment income in 2026 due to lower cash levels after the Accession acquisition and lower interest rates, which he said will pressure total margins. Excluding that factor, he described the underlying business as expected to generate relatively flat margins. The company also increased its long-term adjusted EBITDAC margin target range to 32% to 37% from 30% to 35%, citing business mix changes, the addition of Accession, expected synergies, contingents, technology utilization, and ongoing focus on balanced growth. The company expects its effective tax rate to be 24% to 25% in 2026.

Brown also addressed employee departures to a startup competitor, saying approximately 275 former employees have joined the firm, taking customers representing known annual revenue of $23 million. Brown said Brown & Brown has obtained an injunction and intends to defend its rights, while emphasizing the company is not changing its producer compensation strategy, which he described as a mix of cash and equity based on performance. Management clarified in Q&A that the 275 figure refers to employees broadly, with only a small portion being producers and the majority in non-production roles; the business mix was described as more heavily weighted toward employee benefits. Brown said the company does not know what may have been communicated to other customers and that potential impacts could take multiple quarters to play out, adding that the company may quantify impacts or adjust organic growth calculations depending on materiality.

Looking ahead, Brown said the company expects economic growth to remain relatively stable and anticipates admitted rates to be similar to the fourth quarter or moderate slightly, casualty rates to continue increasing, and cat property rates to decline modestly given available capital and limited insured hurricane losses last year. He added that the M&A pipeline “looks good” and the company expects to remain active in 2026.

About Brown & Brown NYSE: BRO

Brown & Brown, Inc NYSE: BRO is a professional insurance brokerage and risk advisory firm that provides a broad range of property and casualty, employee benefits, personal risk, and specialty insurance products. The company works with commercial, public sector and individual clients to design and place insurance programs, manage claims and loss control, and deliver risk management consulting. Its services also include wholesale brokerage, program administration and other specialty distribution solutions that connect carriers and intermediaries to niche markets.

Brown & Brown operates through a decentralized model of operating units and subsidiaries, enabling local client service with the scale to access national and specialty markets.

Featured Stories

• Five stocks we like better than Brown & Brown
• How a Family Trust May Be Able To Help Preserve Your Wealth
• Do not delete, read immediately
• Refund From 1933: Trump’s Reset May Create Instant Wealth
• NEW LAW: Congress Approves Setup For Digital Dollar?
• The $100 Trillion AI Story No One Is Telling You

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to This email address is being protected from spambots. You need JavaScript enabled to view it..

Should You Invest $1,000 in Brown & Brown Right Now?

Before you consider Brown & Brown, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Brown & Brown wasn't on the list.

While Brown & Brown currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Metaverse Stocks And Why You Can't Ignore Them

Thinking about investing in Meta, Roblox, or Unity? Click the link to learn what streetwise investors need to know about the metaverse and public markets before making an investment.

Get This Free Report