Brown & Brown is expecting rate decreases following Hurricanes Helene and Milton in the US.
In an earnings call, Brown & Brown president and chief executive J. Powell Brown (pictured) declared: “For CAT (catastrophe) property, it will come down to ultimate paid losses associated with Helene and Milton. We anticipate rate decreases from flat to down 10% going into the fourth quarter.”
The CEO noted “we were seeing down 20% and 30%” prior to the storms and that 10% is more likely this time around.
“I believe that there is a great interest by the risk-bearers, particularly domestically, to hold rates more closer to flat,” he stated in response to an analyst’s question. “Having said that, there are new participants. There are other markets – specifically London, which is very aggressive, and that’s going to put additional pressure on that.”
Meanwhile, as reported by AM Best, Brown & Brown also expects rates in admitted lines to be relatively similar or moderately downward in the fourth quarter and early next year compared to Q3.
As for the storms’ claims processing implications, chief financial officer R. Andrew Watts reported: “While drawing the impact of the hurricanes, there is still lot of unknowns primarily associated with Hurricane Milton.
“Our best estimate is that we anticipate recording flood claims processing revenue associated with the recent hurricanes of approximately US$12 million to US$15 million in the fourth quarter and an US$18 million to US$22 million in the first half of 2025, with the majority of that revenue being recorded in the first quarter.”
At the moment, Brown & Brown is estimating claims cost of between US$5 million and US$10 million within its captives associated with Hurricane Milton.
In the third quarter, Brown & Brown saw a 31% increase in its income before income taxes, to US$317 million.
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