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Brown & Brown's (BRO) Unit Acquires VGW Insurance Assets

Zacks Equity Research

Brown & Brown’s BRO unit Brown & Brown Lone Star Insurance Services recently acquired the assets of VerHagen Glendenning & Walker LLP, Glendenning Insurance Agency, Inc., Walker Insurance, Glen R VerHagen Insurance Services and VerHagen Insurance, collectively known as VGW Insurance.

VGW Insurance, in operation since 1990, is one of the leading personal lines property and casualty insurance agencies in Texas, catering to individuals and businesses. The acquisition should enhance growth opportunities for both Brown & Brown and VGW Insurance. Following the buyout, the acquired team will operate as a stand-alone office within Brown & Brown’s Retail segment.

This recent transaction marks the second buyout for this Zacks Rank #2 (Buy) insurance broker in the ongoing quarter. Consistent investments along with solid earnings have helped the company in its inorganic efforts. Its strategic buyouts help Brown & Brown to increase commissions and fees, which, in turn, drive revenues.

The company closed 12 transactions with annualized revenues of $50 million in the first half of 2019.  The company has acquired 500 insurance intermediary operations in more than two decades. It continues to make investments to drive growth and margin expansion.

Recently, there have been a number of acquisitions in the insurance industry, given the significant capital available. Arthur J. Gallagher & Co. AJG acquired Sweden-based insurance broker Proinova.

Shares of Brown & Brown have gained 31% year to date, outperforming the industry’s rally of 25.4%. The company’s efforts to ramp up growth and its solid capital position should continue to drive shares higher.

Other Stocks to Consider

Some other top-ranked stocks in the same space include eHealth EHTH and Willis Towers Watson Public Limited Company WLTW, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

eHealth operates through two segments, and provides services like private health insurance exchange in the United States and China to families, individuals and small businesses. The company came up with average four-quarter positive surprise of 167.16%.

Willis Towers Watson Public Limited Company operates as an advisory, broking, and solutions company worldwide. It offers actuarial support, plan design, and administrative services for traditional pension and retirement savings plans. The company came up with average four-quarter positive surprise of 4.56%.

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