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Brown & Brown Acquires WBR Insurance, Expands in Virginia

Zacks Equity Research

Brown & Brown, Inc. BRO announced that Brown & Brown Insurance Agency of Virginia, Inc. has bought WBR Insurance Agency, LLC, Wilson Insurance Agency, Inc., Bell Insurance Agency Corporation and Robertson Insurance Agency, Co.

Virginia Beach, VA based WBR Insurance has been in operation since 1982 and provides an array of property and casualty insurance products. Its clients include individuals and businesses in Virginia and other states along the East Coast. It has been operating as an exclusive distribution model for Nationwide Mutual Insurance Company. Recently, WBR Insurance became an independent insurance broker. Addition of WBR Insurance will thus enhance the acquirer’s product portfolio and strengthen its presence in Virginia.

Brown & Brown and its subsidiaries continuously make strategic acquisitions to expand globally, add capabilities and boost operations. Also, these strategic buyouts help Brown & Brown to increase commissions and fees, which, in turn, drive revenues.

The recent acquisition is the company’s third buyout in the ongoing quarter. The company made four acquisitions in the second quarter of 2019. Last year was the biggest ever for Brown and Brown in terms of acquisition activity with Hays Companies being the most significant buyout.  Brown & Brown estimates Hays to deliver $210 million to $220 million of annual revenues, $47 million to $53 million of EBITDAC and net income per share of 2 cents to 3 cents in 2019. In the second quarter of 2019, revenues and profit from Hays Companies were near the upper end of the company’s expectations.

Shares of Brown & Brown have rallied 31.4% year to date, outperforming its industry’s increase of 30.3%. We expect this Zacks Rank #3 (Hold) insurance broker’s sustained operational performance, higher commissions and fees and a sturdy capital position to help it retain the momentum.


 

There have been a number of significant acquisitions in the insurance domain of late. Recently, Arthur J. Gallagher & Co. AJG acquired Adjusting Associates LLP to ramp up Gallagher Bassett's UK client offerings and provide strong cross-selling opportunities.

Stocks to Consider

Some better-ranked stocks from the brokerage insurance industry are eHealth, Inc. EHTH and Willis Towers Watson Public Limited Company WLTW.

eHealth provides private health insurance exchange services to individuals, families, and small businesses in the United States and China. The company sports a Zacks Rank #1 (Strong Buy). It delivered four-quarter average positive earnings surprise of 167.16%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Willis Towers operates as an advisory, broking and solutions company worldwide and carries a Zacks Rank #2 (Buy). It delivered four-quarter average positive earnings surprise of 4.56%.

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