Brown & Brown faces risks from employee departures, cybersecurity threats, acquisition integration challenges, international operations, rapid technological change, loss of insurance relationships, natural disasters, economic downturns, regulatory changes, litigation, debt covenants, market fluctuations, industry disintermediation, and insurer capacity issues. Claims expenses from captive insurance facilities and F&I businesses also pose risks. Uncertainties in business practices and compensation arrangements with insurance carriers, and regulatory scrutiny are also mentioned.
Financial Upside
Brown & Brown's revenue growth is driven by new business, customer retention, and acquisitions. Investment income is increasing due to higher interest rates and cash balances. Acquisitions are expected to contribute to revenue and earnings. Profit-sharing contingent commissions are increasing, driven by improved underwriting results and acquisitions. The company has access to significant borrowing capacity through revolving credit and term loan facilities.
