Brown & Brown (BRO) Buys Hillco Insurance, Boosts Portfolio
Brown & Brown, Inc. BRO has acquired the assets of Hillco Insurance. This acquisition is expected to strengthen BRO’s presence in Dallas.
Dallas-based Hillco Insurance is an independent agency, which specializes in personal and commercial coverage for individuals, families and their businesses. It remains focused on providing insurance solutions for its wide range of customers with a better understanding of the needs of the Texas insurance market.
The addition of Hillco Insurance is a strategic fit for Brown & Brown as it will be able to leverage the capabilities and focus that the latter have in high-net worth personal lines and commercial insurance solutions. The buyout will enable BRO to expand in the Dallas metropolitan area and provide the acquirer with better growth opportunities. This marks the first acquisition by Brown & Brown in the first quarter of 2024.
BRO and its subsidiaries continuously make strategic acquisitions to expand on a global scale, add capabilities, boost its operations and improve margins. Also, these strategic buyouts help Brown & Brown increase commissions and fees, which, in turn, drive revenues. Consistent operational results have been aiding the insurer in generating solid cash flows for deployment in growth initiatives.
Brown & Brown’s impressive growth is supported by organic and inorganic means across all segments. It intends to make consistent investments to drive organic growth and margins. Its solid earnings have allowed the company to expand its capabilities, with the buyouts extending the company’s geographic footprint. The insurer will continue to work on its acquisition pipeline, acquiring companies that fit BRO’s operational and strategic layout.
Price Performance
Shares of this Zacks Rank #2 (Buy) insurance broker have gained 49.6% over the past year compared with the industry’s growth of 20.1%. A persistent operational performance, higher commissions and fees, and a sturdy capital position will help the broker retain the momentum.
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Acquisitions by Other Industry Players
Marsh & McLennan Companies, Inc.’s MMC Marsh McLennan Agency (“MMA”), a division of MMC’s Marsh business, recently closed buyouts of two middle-market agencies of Louisiana, Querbes & Nelson (“Q&N”) and Louisiana Companies. The twin buyouts are expected to strengthen the capabilities of MMA as well as solidify its presence significantly across Louisiana. The addition of Q&N is expected to bolster the business insurance and employee health and benefits offerings suite of MMA.
The acquisition underscores Marsh & McLennan's strategic inorganic growth approach, exemplified by various purchases across its operating units. These acquisitions have facilitated entry into new regions, expansion in existing ones, diversification into new businesses and the development of new segments. The prudent acquisitions position the company for sustained long-term growth.
Arthur J. Gallagher & Co. AJG acquired London-based The Wright Agency Limited, dba Simply-Communicate Ltd (“Simply") in February 2024. With this acquisition, AJG will leverage Simply's expertise in digital transformation and digital experience to enhance its existing capabilities in the employee communication space.
Arthur J. Gallagher has an impressive inorganic story with buyouts in the Brokerage and Risk Management segments. The insurer is growing through mergers and acquisitions, most of which are within its Brokerage segment. AJG has a solid merger and acquisition pipeline with about 40 term sheets either agreed upon or being prepared, representing more than $350 million of annualized revenues.
Other Stock to Consider
Another top-ranked stock from the insurance industry is Ryan Specialty Holdings, Inc. RYAN, carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The bottom line of Ryan Specialty outpaced earnings estimates in two of the last four quarters and matched the mark twice, the average surprise being 5.05%. Over the past year, the insurer has gained 37.7%.
The Zacks Consensus Estimate for RYAN’s 2024 earnings and revenues suggests a rise of 28.2% and 19.5%, respectively, from the prior-year reported figures.
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Marsh & McLennan Companies, Inc. (MMC) : Free Stock Analysis Report
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