Brown & Brown, the nation’s sixth-largest insurance broker, posted a 47.9% decline in its fourth quarter 2014 earnings this week. The drop is largely due to a $47.4 million pre-tax charge attached to its exit from the reinsurance brokerage business, the company said.
By comparison, Brown & Brown reported a net income of $24.6 million for the previous quarter.
In addition to its sale of Axiom Re, Brown & Brown also signed a definitive agreement to sell certain assets of Acumen Re Management Corp. effective February 15. The sales reflect the company’s “strategy to exit the reinsurance brokerage space,” the earnings release said.
Brown & Brown was quick to highlight the positives in its fourth quarter report, including revenues that grew to $393.1 million—an increase of 14.6%—and a 14.9% rise in commission and fees to $390.2 million. Investment income also increased from $100,000 to $200,000 during the last quarter for the year.
“Our fourth quarter was another solid quarter, delivering organic growth across all divisions and modest margin expansion,” said Brown & Brown President and CEO J. Powell Brown. “We are also pleased with our 3.5% adjusted organic growth for the full year.”
The charge attached to Brown & Brown’s reinsurance sales dragged the company’s yearly earnings down 46.9% to $207 million. Revenues grew to $1.58 billion, while fees and commissions increased to $1.57 billion.
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