Brown & Brown, Inc.’s BRO subsidiary, Hull & Company, LLC has acquired the assets of All Risk General Agency, Inc., Select General Agency, LLC, TARGA Investment Corporation, TARGA Premium Finance Company, Inc., and Texas All Risk General Agency, Inc., collectively known as Texas All Risk.
Founded in 1983, Dallas-based Texas All Risk is a managing general agent (MGA) for independent retail insurance agencies. Texas All Risk offers a broad range of Surplus Lines P&C insurance to businesses and individuals in Texas, Louisiana, and also Oklahoma.
The addition of Texas All Risk to Brown & Brown’s portfolio is a strategic step forward for the acquirer. The deal will boost growth opportunities for the Wholesale Brokerage Segment, enabling it to expand its presence across Texas and also in Louisiana and Oklahoma.
This recent transaction marks the second buyout for this Zacks Rank #2 (Buy) insurance broker in the first quarter of 2020. Consistent investments along with solid earnings help the company in its inorganic efforts and buyouts. These strategic buyouts help Brown & Brown to increase commissions and fees, which, in turn, drive revenues.
Brown & Brown closed 18 transactions through the third quarter of 2019 with annualized revenues of $86 million. 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 brokerage industry, given the availability of surplus capital. Recently, Arthur J. Gallagher & Co. AJG acquired the full-service global reinsurance broker Capsicum Reinsurance Brokers LLP.
Shares of Brown & Brown have gained 44.6% in the past year, outperforming the industry’s rally of 33.7%. 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 Fanhua Incorporation FANH and Willis Towers Watson Public Limited Company WLTW. While Fanhua sports a Zacks Rank #1 (Strong Buy), Willis Towers Watson carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fanhua distributes insurance products and provides property and casualty insurance, life insurance and participating insurance products in China. The company beat the Zacks Consensus Estimate in three of the last four reported quarters, the average beat being 13.44%.
Willis Towers Watson 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 beat the Zacks Consensus Estimate in two of the last four reported quarters, the average beat being 0.03%.
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