Brown & Brown Q1 Earnings Miss Estimates on Higher Expenses

Brown & Brown, Inc.’s BRO first-quarter 2025 adjusted earnings of $1.29 per share missed the Zacks Consensus Estimate by 0.7%. The bottom line, however, increased 13.2% year over year.

The quarterly results reflected strong organic growth, improved EBITDAC margin and higher commission and fees, partly offset by higher expenses and lower investment and other income. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Q1 Details

Total revenues of $1.4 billion beat the Zacks Consensus Estimate by 0.1%. The top line improved 11.6% year over year. The upside can be primarily attributed to commission and fees, which grew 12% year over year to $1.3 million. The figure matched the Zacks Consensus Estimate.

Organic revenues improved 6.5% to $1.2 billion in the quarter under review.
 

Brown & Brown, Inc. Price, Consensus and EPS Surprise

Brown & Brown, Inc. price-consensus-eps-surprise-chart | Brown & Brown, Inc. Quote

Investment and other income decreased 9.5% year over year to $19 million.

Adjusted EBITDAC was $535 million, up 14.8% year over year. EBITDAC margin increased to 38.1% year over year from 37%.

Total expenses increased 9.3% to $977 million due to a rise in employee compensation and benefits, other operating expenses and amortization.

Financial Update

Brown & Brown exited the first quarter of 2025 with cash and cash equivalents of $669 million, down 0.8% from the 2024-end level.
Long-term debt of $3.73 billion as of March 31, 2025, increased 3.7% from the 2024-end level.

Net cash provided by operating activities in the first quarter of 2025 was $213 million, which surged 16-fold year over year.

Dividend Update

The board of directors approved a regular quarterly cash dividend of 15 cents per share to be paid out on May 21, 2025, to shareholders of record as of May 12, 2025.

Zacks Rank

Brown & Brown currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Willis Towers Watson Public Limited Company WTW delivered first-quarter 2025 adjusted earnings of $3.13 per share, which missed the Zacks Consensus Estimate by 2.1%. The bottom line remained flat year over year. Willis Towers posted adjusted consolidated revenues of $2.2 billion, down 5% year over year on a reported basis, due to the sale of TRANZACT. Revenues increased 5% on an organic basis and decreased 4% on a constant currency basis. The top line missed the Zacks Consensus Estimate by 3.9%.

The total costs of providing services decreased 13% year over year to $1.8 billion. The figure was lower than our estimate of $2 billion. Adjusted operating income was $480 million, down 1% year over year. Adjusted operating margin expanded 100 basis points to 21.6%. 

Marsh & McLennan Companies, Inc. MMC reported first-quarter 2025 adjusted earnings per share of $3.06, which surpassed the Zacks Consensus Estimate by 1.3%. The bottom line advanced 5% year over year.  Consolidated revenues of $7.1 billion improved 9% year over year. The figure rose 4% on an underlying basis. However, the top line missed the consensus mark by 0.1%. Total operating expenses escalated 11.2% year over year to $5.1 billion, higher than our model estimate of $4.8 billion. 

Expenses of the Risk and Insurance Services segment escalated 16.3% year over year, while the Consulting segment’s expenses increased 4.3% year over year.  Marsh & McLennan’s adjusted operating income improved 8% year over year to $2.2 billion but fell slightly short of our estimate of $2.3 billion. 

Selective Insurance Group, Inc. SIGI reported first-quarter 2025 operating income of $1.76 per share, which missed the Zacks Consensus Estimate by 6.8%. The bottom line increased 32.3% from the year-ago quarter. Total revenues of $1.3 billion increased 10% from the year-ago quarter’s figure. The top line missed the Zacks Consensus Estimate by 0.9%.

On a year-over-year basis, net premiums written increased 7% to $1.2 billion. Average renewal pure price expanded 220 basis points year over year to 10.3%. The figure matched our estimate. Net investment income increased 12% year over year to $95.6 million. After-tax net underwriting income was $36.1 million, which more than doubled year over year. Net catastrophe losses of $43.4 million were narrower than the year-ago loss of $55.2 million. 

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