Brown & Brown (BRO) 26 Apr 222022 Q1 Earnings call transcript

Please standby, we are about to begin. Good morning and welcome to the Brown & Brown, Inc.

First Quarter Earnings Call. This call is being recorded. Please note that certain information discussed during this call, including information contained in the slide presentation posted in connection with this call and including answers given in response to your questions, may relate to future results and events or otherwise be forward-looking in nature. intended current to respect results the the first and our including future for security reflect the quarter relating within those company's are laws. statements views provisions to with events, the safe Such harbor fall of to anticipated financial of of from in Actual or result those as or or referenced number currently forward-looking factors. the uncertainties statements and a subject to future anticipated number results and are may any made in a events of risks a differ materially desired and in include the results issued those the release forth to factors results and that from company's Such factors time set company's Exchange finalizes Securities determination press identified the risks the from its yesterday, for not other have quantified its that as financial current uncertainties differ quarter, time filed numbers may Commission. and the it preliminary unaudited the first company in with reports the currently or identified financial

forward-looking affecting obligation and Securities update posted the in these this forward-looking in presentation and slide Additional additional well and the call statements is company's regarding prospects intention the filings any other connection discussion Commission. information or as as result contained or new as whether of in We events company's revise disclaim Exchange factors and or otherwise. a business the with any of statements, future to information, with

Calendar With now Investor www.bbinsurance.com call website that Relations said, this call All reconciliation company's Chief found press financial non-GAAP earnings and are to turn there GAAP in Officer. for Brown, in in over any the non-GAAP at presentation conference financial will Powell of addition, by or President Executive the clicking company's investor certain call. the I measures used release on the In the Events. be most to measures financial can measures and comparable the then this on

begin. may You

good quarter delivered earnings you, everybody us call. for Jake. first joining another and and quarter very bottom our pleased morning, for with and performance. our XXXX top Thank Good are We thanks line

performance two locations. XX% very soon-to-be is globally. call After the driven on met weeks around and that our future. optimistic Penny engaging Xth, U.K. are Since teammates of Our two Ireland made approximately XX of our Brown visited consistently more Brown, are with by our the cultural the alignment becoming culture, new we company the level are enhance team. about of we've deliver the spent Their the X, over and weeks Brown whereby progress unique high & and good March teammates with BdB is and we capabilities Barrett our part of on owned GRP, and X,XXX Orchid Scott and by and additional GRP call teammates. excited will customers to even and the about After confident talented solutions our I and BdB traveling over more teams, about of

March. on the closing update the Orchid we're about excited at very an As the of end deals, closing of

third anticipate For GRP closing we acquisitions these during and the BdB, to continue quarter.

March. completed we for in the transactions financing Lastly, these

documents report, commitment philosophies annual our initiatives ESG report review statement. to strategy, of ESG our published report our we encourage proxy executive to our everyone as our addition, In these and around and key compensation. aspects We highlights each

business and the good to revenue, of transition let's $XXX XX% new quarter. We growing Now, with Slide and million X.X% results delivered retention. organically solid the I'm total on for X. in

was XXXX. first consistent margin strong and of with EBITDAC adjusted Our the remained quarter

completed range to years. materially with prices remain minds the the manage and being increases as Consequently, were costs From property to XX%, with fairly a to that's relief couple I'm than outlier rate expand some increases many customers today modify XX% influencing market our previous on of to and X% year. strong now to more QX quarters an most increased the the companies $XX XX%. in the availability pressure of grew, seeing earthquake and beginning Our on main detail. amount. challenging experienced years. losses. discuss replacement some realize We're an very to rates continue and quake, rates. first values and includes The issues across themes quarter. with down to as-reported of rate carriers perspective, that accounts majority basis. to with similar In per to for classes, rising From A their property, business E&S consistent enough over standpoint, with underwriting initial an From past was invest how up to leaders continue on businesses to wind and compensation slow remain XX% acquisitions have managing pleased for very the are for a and approximately industries leaders pricing Later our are sensitivity moderation quarter increased liability over summary, of we're X. million, the best X% for find and $X.XX many as be were and market of for 'XX year-over-year limits quarters ability workers, basis challenges $X.XX and insurable slower during heightened be revenues customers which last Slide the Cat most the in continue customers their being cyber albeit last continue are -- supply a multiple putting economy with financial liability experienced income at customer on of share margins two first the of premium limits Professional and annual high in the compared These certain across and X%. in is XX% workers' X% both interest quarter chain XX%. inflation rates company. for will prior to rates. up lines net the two their were to carrier presentation, to are We in on the on Admitted adjusted the deductibles rate increases. topic with perspective, Andy Orchid up which performance results rigor

Regarding continue with obtain cyber, in and deductibles increase security effective protocols to to coverage. order carriers rates requiring

said, cat-prone For quarters. solutions. and to to the continue lines find professional well appetite this losses past I'm with we those be Page Florida to positioned will property previous for in that even California liability and the due help consistent the aggregate placements are X. With our year. creative and are concentrations themes personal customers challenging on constrained now we areas personal umbrella, excess expect are becoming more and

to segments. of four performance Let's our discuss the transition

fueled fewer rate a Programs the another revenue quarter the combination XX.X%, good X.X% delivered being respectively. new National segments of wholesale segments with by and business, main X.X%, and Retail, Our X.X% and driver these year. modest quarter retention, performance claims revenue organic strong our growth was exposure improvement. unit of of for The increases with organic this segment decreased Services weather-related for The

turn Andy Now, detail. to our in over let discuss more performance financial to me it

non-GAAP Like Great. Powell. to Thank GAAP you, our on quarters, We're then X. and over discuss results Good Slide highlights. financial certain previous morning, going we're everybody. number

of delivered X.X%. For revenue growth total organic XX% the quarter, revenue we growth first and

for by income Our per the increased higher year net net the million quarter or effective XX.X% was the benefit income year. in The our our grew to as the change XX.X% impacted this primarily stock rate tax associated to shares first quarter diluted $X.XX. by XX% tax first of vesting The incentive plans. to last with in from compared share $XX.X rate of and XX.X% increased

to continue the our range. anticipate We effective in full rate tax will year be to XX% XX%

of number Slide or our compared number over prior our remove on increased quarter, first loss results slightly adjusted or payables. currencies adjusted our the X. shares to average increased and as of our dividends the measures as of XXXX. quarter isolate the operating excluded on this both Previously, impact foreign to disposals. only net the per the refined movements earn-out in This XX.X% slide cost in adjusted on to year Beginning basis. an gain on and well weighted Our to compared share revenues change We're measures $X.XXX presents we to

we're anticipate refer of these Orchid higher adjusted basis, comparisons these materiality BdB for cost the variable XX.X% last acquisition entertainment comparable From XX strong by addition, for reconciliation income prior quarters are increasing acquisitions to these In GRP, an probably our as with year the our half associated second the and and first XX EBITDAC with XX Slides were of year-over-year income We and cost an to standpoint, before second amounts over back XX of costs to grew months. Please On most XX.X%, the the by margins in increased income nonrecurring next taxes and toughest year. and our net year-over-year removing even excluding for the costs. the to our with XX.X%. integration measures. due expense and travel by increased consistently GAAP

Our adjusted income was number Slide $X.XX quarter per XX.X%. which great In top it another diluted and over summary, was on the by line. net X. on grew We're bottom share

business. driven segment operating EBITDAC and increased driven across delivered lines growth even revenue for grew quarter points XX.X% managing leveraging months growth the solid acquisition last expenses basis the Retail XXX our growth of Our organic activity growth variable adjusted with was of total by associated revenue with increasing which by margin with by cost. Adjusted the XX XX.X%, and all X.X% of revenue over organic

Moving number XX. Slide to over

the National of with over sale revenue by The of expenses, customers. costs the in growth commissions and of Slide as variable and related and Programs EBITDAC revenues XX. growth prior to growth stock-based adjusted to with programs. Adjusted strong with total prior declining adjusted was slightly revenues line and XXX compensation new a in a noncash total by driven the the across We're program X.X% revenues Our associated and X.X% revenue recognizing margin segment timing basis between was XX.X% delivered number year. the lower associated many of result points organic contingent with higher year increased on difference substantially organic

delivered and growth past despite Adjusted by commissions XX.X% XXX growth higher adjusted variable EBITDAC the acquisitions in cost. points margin driven basis XX.X%. Our contingent the increased organic growth revenue increased of associated as improving organic and months of revenue a XX.X%, total with revenue of by by strong Wholesale Brokerage result segment XX

revenue weather-related declined Moving XX. to on X.X% segment total Adjusted to as by due and Services prior the fewer year. X.X% organic revenues compared claims decreased Slide to our by in number

due variability in the cash claims. comments weather-related few EBITDAC or by decreased conversion. adjusted million of volume and A regarding liquidity For to quarter, $X the XX.X%

sheet. fiduciary fiduciary As appropriately flow and of owed discussed call in change our the from or payables model nature a cash, reporting more held The cash earnings we've year, the a reflect for during to the on operations transitioned is balance last our accounts capacity. accounts QX receivable to and

fiduciary in presented within changes statement, flow activities. receivables and cash liabilities the On are financing

the flow solid XXXX delivering cash and as sheet, fiduciary these we labeled accounts balance liabilities. with assets On flow performance from of delivered in a cash and strong are year started After of operations $XXX million. another XXXX,

of as compared a year total as earn-outs XX.X% original lower a percentage overperformed bonuses ratio expectations. percentage in as prior and teammates cash first quarter from payment of to incentive The our higher of XX.X% from revenues prior outstanding than for have revenues XXXX performance the their acquisitions cash year. was this operations ratio to acquisition paying Our the of was for the year flow our to the certain flow of due as of operations total in

the of as of our year the flow transition at to post estimate the range ratio reminder, fiduciary payments good should quarter a with our year total be normally to barring of revenues in Consistent to due of operations a our cash XX% from first unusual. As a model, comments anything year conversion prior year-end, percentage XX%, full the is bonuses. of lowest

new a of will XX-year bank million $X.X will come mentioned earlier, X.X% of for acquisitions the end finalized and carry the interest issued Orchid. GRP, rates we $XXX and of from X.XX%, from The capital the be we first March. at $X cash year. on purchase approximately The the the of increase this respectively. expense of facility which and new expense as price the financing sourced million first facility. approximately billion million bonds As and was expect $X bank billion we for for acquisitions $X.X total as $XX interest forward the billion. bonds going of during be of hand well half Powell Incremental will we BdB price purchase quarter deployed to generated interest quarter as the the from XX- a will of and completed mid-March these per result come remainder cash approximately in

our as support it past to to that, let done capital delever Powell in cash strong With quarters after back larger also me enables acquire strategy excellent we've position great comments. and flow to Our acquisitions. the the and for us over companies over closing coming turn

momentum We believe continue for Andy, XXXX to us deliver report. a into XXXX another finished more top and We to great on enabled line performance. quarter and which levels. great Thanks, economic with to normal significant return growth will bottom continued

and business continued levels However, and rates. there are topics the high of that economic interest a confidence are which of will number rising influence expansion inflation

the constant first on will quarter. an we Depending next We quarters. be expansion. of invest unit are for additional How may in lines remain the rates From other E&S very and the states growth supply with rate losses employees certain consistent two, across to increases out for quarter as further premiums or businesses increase three, weather-related trajectory This expect rate global increases markets economy play perspective, expensive for one, how becoming certain then few the of also each corresponding following industries; anticipate to as: in leaders months chain influence admitted perspective, we relatively resolve a and themselves. and few of for of constraints; California next will the geopolitical topics classes. the the for coming areas drivers of current will moderate the Florida, slightly incurred the exposure how matters all resolution second are over like their experienced levels premium over premium From economy. months, follow. and quarters these availability in the drive In

competition GRP As customers quarter. M&A third expected broadly, progressing aggregate an BdB rates deductibles or modifying a at interest and managing until anticipate the as regulatory approval increase levels result, remain to are during of is expect we valuations More by and the expenses limits. On we front, closing for materially. peak and closing

have good We pipeline. a

the importantly, expand positioned data great companies make in We value time that to are financially the innovation sense actively for leverage customer implement so coverage well and experience writing From closing, closed. long-term our making for to be the teammates great customers, we're will products. progress we for when seeking we soon our firms that, capabilities XX,XXX our and teammates of good about drivers back Jake solutions placement that these our In can that fit an and culturally more enhance With to for working as We're for experience, it the are our business will stakeholders. on XX,XXX-plus about Q&A. our me feel more we're create customers. streamline teammates and nearly will to business standpoint, turn be to GRP to continue over efficiency order BdB also deliver delivering and key most acquiring of the let new our enhance delivering new tools our they spend as and We're growth. focused

Elyse Instructions] Fargo. with Greenspan We [Operator Wells will begin with

thanks. the My is morning. first margin. Good Hi, on question

pointed for know, second compares you the tougher and I margins as Andy, half last to the increase in T&E the year-over-year out flat had pointed to guys that guys started have quarter you back the in year. of You year. first

since originally in that So position to start you see expected? to you than margins does the year, come better were margins flat guys the

we're round of to guidance with the comments stick two that and the first pleased end year, good like fact this quarter. still could the quarter up pretty a full for up we're the for we'll the range that seems then the be probably last at very how the for us. slightly next see Elyse, I with first current stage. the year, year since think said we down at But quarter, let's full flat, But similar or our slightly,

doing Retail, great. the core you to strong business growth you in you in And versus quarter broad-based is expect compare you think I year, pretty us tough? my second year-over-year the organic. in quarter well? showed different to good being question, how growth growth would Retail then businesses. show about sense Okay, Can the this benefits the across And guys last terms benefits benefits. the as in year pointed a Should in give in the second of QX? Or know we second of

anticipate with in performance quarter And we the we benefits and are those Retail. in pleased Elyse, business all the personal that So with P&C although of they very don't perform the of commercial, pleased second how performed in well break out we're lines very will quarter. and segments and first the we segments,

the any other last. looking Since announced one platform are could and guys translate you potentially announced into that some to then to update of kind seeing were you how that M&A guys opportunities the deals & in do you about And additional use Okay. talking for GRP overseas. market deal, you have Ireland you just Brown and that U.K. the on deal, When bolt-on do Brown?

in would I economy identify lots but small people medium culturally Elyse, been are XX to of And States. this are financially. there's and million firms make million the there United -- that fit in and the sense doing and the that has say, the there's XXX and that space. it's GRP I smaller firms is there in a sense to obviously, this, What But think continue is key people

we we're nice the opportunities opportunities to know, and do soon-to-be pipeline. we we for actually to the what present looking welcome believe don't in But done. standpoint anticipate the it guidance, of excited and you terms to give transactions get for at a the actively what's and in by from approval But -- there's -- are going until actually us FCA. to they going buy We or excited continuing so that. as And about are doing some time of that do we our we and teammates once there it's very new very don't be just we're think

color. the for Thanks Okay.

Elyse. Thanks,

And Raymond from James. a next, we'll Greg Peters, question move to

morning, brokerage constraints Powell, sector, from one a your talent. going war everyone. teams and to in There's insurance on on lot Good the be, to talked talent. seems see to it definitely, organization inflation, supply comments, periodically about of war We mild a you -- attention the within another.

be wage could retention the for your about seeing to you up. holding it to how teammates. And relates from us us maybe you the producer speak is to about a talk as -- retention might teammate moment your So inflation perspective pressures

I not are, tell that ago, firm fact has very but talking one. particularly calls remember And lots industry and industry you other tell acquisitions. years what Greg. Number developing the several that's you seen my a the has the years people are done are would just That carrier is this, the ever in our segment space. recruiting job I across Sure, movement business, or I good are in and one teams would the job; active talent moving we're insurance a platform. you whole haven't XX-plus Not that about it sometimes about of And -- in to people we done seeing, brokerage carrier that one a In I lot industry, firms seeing the yes, in as cultural fit the as a of of side. number of two, moving this XX, side. we the in terms said, on talk pitiful

the kind we of hire we that's and -- in for. that embedded also people We look

wealth Brown Brown at & so fundamental creation core for teammates. a And our is value

Brown a buy required or And opportunity purchase so plan all you through at an plan to do our teammates no have that as equivalent employee we is ownership stock discount. have to teammates one an know, the And of & company but the know stock know XX-plus is at culture we by XX% owned a that our it's fact. We Brown the at where Brown think And & own Brown. but here of higher for shares percent teammates. least we of

a public So you is which unusual have particularly very an ownership culture company. in larger

about winning of think be is people it we to parts way the like teams. so And

a of team. after. talented there's that one, revenue You a them to would would winning hitting which kinds we Andy at purchases. is leaders believe of I of have And a organization, level decentralized a be go targets team. and a part you're if same ultimately, very they in to winning winning independents the are of a certain through of share sales part lot for and and like lot to people we the wants grants be the part But and that like to and a there's business teammates through, of tapped way and producer local service grow a be a team. getting something discounted into to wealth appeals

mix have So lose pronounced that of that don't and more a Is do we was & No, doesn't bummer. always that are ago? are impact leave like aligned today company turnover have sometimes to our There not. turnover believe Brown Brown diminishing winning behavior the that overall it's right & that But it it we had drive talented have. looking Brown to a that's years have to be team two goals. Yes, turnover? we the we at mean with teammates. and than are that desired want because that rewards of teammates Brown we're part and we for And people of we we

Got it.

clarification in answer. point a your Just of

at talent with renewals you about business? carrier any seeing as disruptive talked are the total book your churn of of you the I'm wondering, level. of You that think about consequence

change bumpy. Well, that answer level that, means In there's depends. through -- it a have It answer can't let just It is no, to answer two that the me when the some like mean the something questions or that's on And it account; at be higher they ask we -- more work doesn't a to account kind The that somebody smoother would disruption. more know level, re-underwrite leaves, work if just But it account this through the of if try may can an instances, books, your can it. person that put desk There's in I or the they At like you it. a had of that. It is way. office you transition. local ways say depends. underwriter some put a be a at the level, it example. instances,

could cash flow this Got all provided based reported it. it of quarter zeroing what front I to that that their color probably you picture you've little conversion GRP colleagues I'm is is I you guess you. some getting with of the can us Thanks to the for I wondering us they you've but Give going you're how surprising, process if how a big this first bit I'm us comments on their the but out a you with and in the meeting been to performed time margin update. able profile, is give BdB. to another give on also see. which organic, what And us their free on know opportunity -- point. their perspective isn't how observing of on bunch mesh And how spent you before maybe know in results. some in use

reason I'm So, going number touch let I'll transaction. And touch very a try say way. me haven't thank -- that that you the the closed And in to on we is, diplomatic one, for I the question. to

more to I'm FCA. into ago. Ireland, Brown that these because would When your believe So I the I know important in but we've subject quarter know & all to the of me third going go not this is you go and said, have and They the can't quarter. did Brown years And as into to reminds in nice a approval it we enough. offices the you specifics around I what model. I first communities is don't England it's important think XX put occur by and specifics, But in this

that that very we are continued call and we like our what add were just done for ago, to XX so things the service since understood and a the we organically. in those and some grow years but organization cool we've capabilities more improve XX were sales last years. And people And on effective

of in offices met teammates a I you can of And lot and are so and England went pumped. lot I they Ireland this, tell and in a

aren't alone than public have teammates. a pretty any let that's brokerage in there else the public got relative And company, but by so XX%, ownership companies, XX% you a to know story And anybody there. we different public out much company insider many space

on talk of will and based an when honesty we again, a ownership foundation And of you culture about the So first culture put and always where interest we Brown it & for Part integrity. out do culture. our long work term. customer of that, is the it's Brown

third you are I and teammates on in going about the and go pleased and could sometime are to London. So in and his Bruce BdB I'm can't for the and at wait his England team them on become Silvestro team Mike tell -- in we very quarter. with to teams officially

previous commentary overall cash in But no change And Greg, our with the regarding your and to been have and for businesses. profitability organic question about margins, address in the flow we'll organic businesses conversion once the us.

of. part the they're those divisions March, As going we to in back very that said similar in profile, which businesses and of early the part a has be

part and adding has changed their the nothing team very, So We're them very having about capabilities. excited be that of on front.

go at that's quarter, cash that similar Andy, your the what's correct? bonuses like to the first through that GRP and on in cash point, expenses So and going flow on BdB,

For there substantially but the some different most nothing phasing is part, yes, different.

Thank Got the for you answers, guys. it.

you. Thank

Truist. to now Hughes with Mark We'll move

morning. Good you. thank Yes,

on of curious the your volatility. this latest on thoughts Just net impact

growth Citizens dynamic? that Florida. you getting when growth we kind of think in Is some this in are of shifting say, rate you've to, good dislocation, of about faster got their in growth customers -- organic in California, and getting environment? you're over that but these impact the markets Let's Are is these organic this deductibles a because moving increases say, meaningful Florida,

meaning be they're So can let's to back of one to this, of that number Demotech or been the means have the kind that as on California will they alternatives. and saying today and of downgraded they funds in alluded other. downgraded, State in when take-out state-backed I first or wiped and the going Florida Mark, pressure the that and/or don't continue say four state by In on, you so believe up Florida, filings, the there there they're down. And continue say, are is out, companies I believe

so is And homes Florida. you've the lot sized in turnover got you've State what in got of a of certain

special on governor was got but the the and those several items session that of session one a topics. so insurance they've -- And special had

trying had some understanding losses consumer-friendly, is of consumers and And and choice jump future are be of Florida of a in things here so and/or past and/or to that have hurdles what our -- governor Florida. have State to the is do or that there through aggregation over for regarding our CFO make the development very carriers losses to the and

would the what lines becomes fine sometimes a area that Number very a been teammates bit. with more they a going it's have customer little the account very little to that bit it as challenging is a the because So personal underpriced of I work in which case two, work one. say for who's is create carrier probably, you where down, number ones important, maybe That's went to them. the in our it relates

the to that We other leads insurance, So customer, think to opportunities? higher-than-expected to that they're growth to Yes, caveat. organic sometimes try market, at we experiencing, but a get looking every all increases their so for Does those insurance them with can we not bring locations exclusively. some that potentially on customers. create options

positive neutral that give of a it's either tell negative, I on you that it's it's because want say with don't But to -- want thing basically you our also don't goes I like although would I It's it's bonanza to that. stuff sort neutral. it's not. it's but slight team. a So a there's a harder to

things other a big cat couple keep commission comes report put know this. on of revenue. the that properties in go There's and our Mark, you number just mind I of out research what as on a different Yes. into everything. factors out ultimately a

are that we and a in And as customers many in looking through our looking so at the carriers. you've different while purchasing got the deductibles limits in fact, commentary, in order is, we're they're we the mentioned to are online than commission rate taking case those rate up, adjust. their they're -- They've what other Citizens, that going got total of cases paid In up. at

that go lot So there's a of into it. factors

So up mean the that of inside our there. doesn't up go might just rate revenue goes commission it online XX% because XX%,

thinking So in consideration just marketplace. those try the all about to opportunity the in keep when of

the on impact EBITDA favorable one of at from of near the point in that timing revenue. here? National was term mentioned the Does You Programs, become more some

Yes.

when the works of that out year, the in of was there Mark, we that generally, we And made, in we've calls, this new just P&L, previous up. to that teammates onboarding come we're bring over into And customers, about the start the trained talked think catches revenues get to start then comments customers. the and -- one is hiring to prepare in then it them the advance get on to I onboard. account as

when nothing you you -- at look they So unusual quarters, individual around. but can sometimes when move

a point this out more negative more at balance some and future? quarter, of in likely the to was So be positive

yes. comment, fair a probably That's

you much. very Thank

sir. Thank you,

UBS. with Bloomer Weston to on Moving

morning. good Hi,

could M&A. help Maybe U.K. geopolitical prepared of things eurozone the you in 'XX and context the and that around guys I just specifics additional was or or conservatism that. hoping One remarks any the guidance on the any was potential exposures that growth. touched can't related indirect provide get have impact have and noticed context on could you the on to you maybe I that frame your into direct slowdown in in understand built on was March exposures? matters the you expand on into the but

Right.

anticipated we of knowledge, by the we've is acquisition Ukraine United or announced quarter is FCA; we even don't through So maybe call currently would approval States. to the the the have whether to least pressure, at in I one. exposures general what inflationary that's consumer number or that in impact Russia, best Number we first would unlike subject two, be our with west that what see seen here the not say pressure, any what

standpoint, be prices, we seen quarter. So From first exposure a unit not food things prices, increases like slowdown that could on on have increases the in an gas that.

And will -- we so believe continue. that

what the payrolls you may is up, or paid if The cost whatever the payrolls slightly inflationary impact with if the flip based sales, case when up, that premium pressure. there's I gas, your of paid. so that are units insureds, offset of exposure could their the a be. that side have price the is premium goods wage food, could sales up, If negative remember, call The And balance your general clothing, go on inflation. goes go

based we from So it standpoint. States answer seen inflationary an so That's seen to question. United we what far, would be the on we've think we've would as how that what that here said, I've in similar

you've around broader M&A That's on In Great. guess, the follow-up helpful. is, of your across year. per portfolio. past, the My deals done XX-ish super I pace

for the multiple Just Is from you're M&A? curious what could be seeing same around recent expect lighter that here. deal. roughly we Just you're seeing given on type should it large-scale on size, level the curious XXXX? Or the pipeline potentially by of that

Yes.

I the focused transactions. on wouldn't so get So of much number Weston,

-- cultural we if What not yield tell is you sell might on would I focus want. to the I that's generally And going I -- think know people different. fit. that outcome generally, we well, why when don't you and is

what I you average look at tell so or XX back can go revenue five on year And you, and year average would acquired. our

stands them, I we've to number closing around transactions think there's those year. want But be somewhere each year going its certain to one that, I approval and you million higher to be But $XXX subject is about. that of talked it this a would be that that than on years, understand deal will of own. that the

are nice like separate States? Those we we announced is we that the in United done a interest dramatically both. transaction, a we two and acquiring our business does to here sized firm no, or firm, And do have fact invest in or totally ability how about the decisions in large it the can the So answer doesn't. impact that think

you have opportunities we the when subject pipeline what more what buy. So million so transactions. I how we buy. we those than of lots But about the don't if pipeline are the much announced we're And we number And approved. close. is don't to far, when talking going with The the that don't on pipeline isn't we're to because to $XXX know know of we year. Obviously, talk we've wouldn't but start much want we do focus to those opportunities being and

you'll close about And we we them. so close it's ultimately those know and what when

We Weston, is be maybe Andy. say I it's that definitive, you other out And we think we're adequate we the asking in this of to We prepared buy not and have capital Weston, market. we side have do market. businesses continue to are M&A out our of comments. the just can had might M&A good of year. the do -- question this really

able after to that organization be these the We we'll delever also transactions. anticipate

kind quarter just we of really just sale. with where line businesses because is And for they're do cultural not for up Question good -- we alignment. when are. that So feel the us consistent they're of the by

I Great, really thank color. you. all the appreciate

you, Thank Weston.

[Operator Jefferies. to Instructions] move now Yaron Kinar We'll with

you. Good continuation this M&A Thank Maybe on morning. a front.

the it can M&A? as remain So when help you over elevated to outright are just purchasing opposed hires another at team a prefer us about business. and team hire about to if you how pros option think in valuations Maybe thinking this cons as point, of people a bring and you

that we have people, would of Yaron, I at the would Well, find this to any time consider is be them. doesn't cycle. way good articulate think that, It I type we hiring

our lift-outs. how have done we've might we business. a So you That is not not team call number built of what

aren't we don't and ask we contracts our want want they something, -- we do have contracts consider a that people to to people Brown it. -- so would way wanted violate And people contracts hiring. the mean doesn't would we we don't the when by to Brown. & we we that right to somebody that But And structure consider abide if that there come

those abide expect And others we by so contracts. to

forth or want -- people it up contract really you be and business. somebody the employer and wants way back then they had with it's And legal that We come and if try around We the So it leave, come, can. let's new then business, those covenants, the legal after to want you if if, then to we expire, want covenants That's we we We you that. basically mindful a going actions you can. have to go to we're where take to go And write business. battle. of don't -- not a people once do our build on fact, up. if in and that then with into to your prior honor so go mindset

on of going the in Elyse's And different that's the helpful. totally beginning Q&A. question then Okay, to a topic, back

see the second you guidance What saying flat potentially yet, as or kind of of and are margins. It the year, of it half the margin in that a the seeing maintaining could that expansion the alleviating flattish could you're Is headwinds overall in that had growth? seeing second You the you're margin just year? slower of of offset first sounds were some margins the like bit you full year side half on little quarter. pressure you're the

know I Have airplane you you on airplane you lately? flown lately? an flown Have on an have.

pay the ticket? how had that So point to for you is did you see much

Yes.

Okay.

and rental of cost cost you the hotel particularly rental go to where So flippant. car, these on -- California a to all ticket, the the $X that an put gallon like to place the car, of say room, trying I'm gas a it's of cost to and a pressure be are the trying of basically there a cost -- inputs. the $X not I'm airline if in there's

lot circumstances. our there's that quite people do. that'd client our we they think end I we flat there, think, and I pretty margins costs Xx exactly now mean, the to we're be our Yaron, kind a not we're the a a But terms of control. to two of darn see or so And in little two does as honestly, about get six you have beyond to it that But pleased if two under everybody but like are as take back are. offsets the of people we're That traveling saying that took are that and bit. going much if year, margins, good costs And deliver really at of where good really margins that variability the said, if you

we say organically profitably into to growing would thing and exceed too. slightly, the our underperform it converting that's reinvesting great. by the The importantly, if into I way, we flat, more -- profile. are right the we relative if what business business. cash and our we're we that's and And all margin So is that's If overperform that

to amount that we've conversion, cash know it's we really use in it's that we I a important, to ability you I particularly But long this think talked cash it's company. So We convert the and -- think convert think our relative time. invest important, others for about do. our and

so the Thanks it. comments. much Got for

Yes. Thanks, Yaron.

to now Han We'll Derek KBW. move with

morning. Good Thanks.

it increase interest investment matter income. about much. talk would what have most? looks rates at just I expected And an didn't it the like looking but you change the that why Can Just that's I'm asking. all

maybe Yes. for to Derek, think about two ways that. you here. Probably Andy

Let's talk about on income side. the interest

we you saw, generated quarter, income. interest $XXX,XXX net the As for about of probably

of earnings factors So of restricted rates go the probably on interest that in of movement a because interest fees, accounts have and income material will because bank into upside of there. there's not et the lot a net inside cetera, that

side then things, we'll in $X.X floating-rate about to look it. billion, you of have there. is I of range one of maybe the debt And billion the at when way $X.XX that's out debt park So think

as think we're you million, that to X% we We rates are and well there. will the get year. the $XX guidance in of in order on gave out it coming over happen to So increase floating optimize idea good what a of relates to interest as there. fixed can with positioned pretty on the we've that the kind probably thoughts And what our between every incorporated rates does there

year-over-year? only I just talk helpful. were actually down little but like were the programs wholesale that? was up. modestly It driving different looks on contingents And about question bit, contingents Can contingents. That a directions Why another really it. you the had Got just the what's

Yes.

time. are explain Those volumes. and in profitability about talk those down and can programs because that up over the to reason more that move that, tied and can ones first thus to individual they're let's just and programs in So be on -- we've it's the seen nature. And volatile why

a good see of So they're nothing fundamental And business. standpoint wholesale the on then Nothing inside bit unusual there. from side, in it's little to that but a few that's we that profitability changed up a woods" that the start going because at years of don't up. we're are for overall think been contingents carriers. to and the quite going down They've of "out the

up true-ups good see just accruals a So that we only bit from to previous made of one that's some but little some that's quarter the the and year. in

So this stage. there unusual nothing real at

you the all Thank it. for answers. Got

Thank you.

Hughes, Mark And we follow-up Truist. from have a

Yes, thank you. Any security on update the business? social advocacy

continues changing processing don't is see it answer to don't I seems of the two, quarter there to all. would slow those the Mark. next at be meaning in yes, is be tell The What in or -- to And you term, continuing slowing be I down -- term the we claims. that or near near

and continues to things -- be near claims of like a but processed the way see term. there I pipe but backup the efficiently in to So as clear be to the don't to I say,

So we have Do else update on on Andy? you have a that, significant don't anything that.

very ways, very, it is pleased inflow that and Mark. with Yes. of to calls. claims mentioned business of this Maybe some previous all the We're customers. volume coming One think about on our the with have into and two in relationships we we potential the us the

good. is inbound So

number ultimately of that's the the other they is important get employees has an Security thing Then the funnel of us to look it and as kind number Social the of the at that at there on that's have for question that with the So just by the end processed business. a Administration constraint how administration. the we that

we'll a to that year we increase But see at somewhat to of cause the it, in kind right resources where now, level as add it's to going clears then there'll going and happen ago. the seen resources believe at out. will it a of additional a all us least about But put cycle in goes And in call that's So And We there's don't the that SSA though. anything a to to -- have. more some really order past in was they'll then it volume. be that behold, it there. we've of and noise sort in backlog a this sudden, they're and lo

of business it's the very in a waves end. overall on health it is of out So come the the kind it come does just but cycle. to We wait for And back good.

Yes. one think final directly I call but on don't P&C And cycle. this the then the you've addressed question. of this duration

you steady than as more You that Any some for durability near sounds term; described seen the steady, view your optimistic be influences the of the increases. outlook thoughts a the And what rates the on here may at your in little recently cycle, to duration of the past. it like, least largely of might cycle? have on these for that calls in steady be

Okay.

clarify ranges me said you so let So we're just and what clear.

increases are a rates moderation we the said? in range there. majority from that you in X.X%, what all range I them make to next of to sudden, rate rates, range But X% the understand a the you them If are slight in X% then do X% and the of X% we okay? and being or we quarter, of sure Yes, the to want say majority So that's there's a the similar that anticipate do.

been in I've in I XX years. but So classes that's rates of same moderation range; the in slight the Number in business, seeing one. only say we're Mark, number business actually most two,

my in years, like so seen I've we're anything in today. XX not And what

the about those up of you significant whatever on reports awards involvement you costs other are to so-called carriers call huge the want outside claims but you profitability start verdicts. loss and all read talking that, up. to you've want normal, the if the So Their they is call have

country, seeing areas in You're of the terms certain also just to claimants. very sympathetic of particularly in juries, being

But are of carriers better forever. on there calls a to at disciplined a so also That is in a is friend ours job the the that And phase underwriting. mean are cheating I carriers going to cheating looking and that's all does doing going to pricing. point, we're undercutting think certain not go of get start And the what that. -- at where phase people the

coming. that's don't that's but happen so And to tomorrow going think I

we on I'd one moment. like for but on caveat there's touched to Now that a expand

in the a Florida, and here that it's hurricane significantly into big put market easy not makes today. different You Florida

So are rates charged. the of it but that's number the you That earthquake only people not earthquake that big one. buy California. into insurance Number that two, changes dynamic a and particularly put the

So event into which tornadoes you disasters hurricane things that. that tragic talking natural about what talking I the a Louisiana, -- no would to Florida, say and major like there coming Texas, I'm windstorms pricing Without and not see will is, are I'm are big earthquake. moderation. in continue about big that,

areas, those see one could go any chaotic you of areas any If do market. a one insurance in into that those very of

big know helps it natural our which that view think and you I to -- that of any losses. the I like don't if the me I what's be didn't going the ask to exactly you it's by think on or you way, moderations, if clarifies it hurts look you we're exactly, -- rest subject So hope but I year; slight for

Powell. Thanks, clarity. the appreciate I Yes.

Thank you. All right.

have do have we think I one -- do we What more or question we Jake? more than have one that.

the couple a have in We queue.

We Phillips, have Michael question from Stanley. a Morgan

taking in. Hey, thanks me for

Just one for me, guys.

without is XX% cards obviously. Specifically could been -- for think us in give clear quarter. that this in years just help rest we of pretty replicating compare kind of numbers, two on program, trying the year to did play as out of not national the the about of you've of the remind prior the X% year to to the you But XX% specific just the organic can -- you that to us rest things how the

All right.

Programs of National buckets. Think a couple Powell. it's Michael, about So as

One like. quake, of catastrophic let's wind, those the say, buckets exposure, is,

availability So your the capacity. to in market grow going dictated ability is to be that by of

new existing market, you have but book potentially not you moves if write slight another will to some And growth. moderates business. don't So if increases you then that on that will your get new capacity, your of

to said want of I one. So is on our Two, in component dependent Programs loan National Andy business. think about tracking earlier what about a you capacity, is what think

sold in just going know You business We the that are like you be portfolios several don't a were when know being to quarter. are we sold, purchased. portfolios when have portfolios the didn't where a have

a the was bought can bit of the a big National If clients just bunch think both slight third okay? to we re-rating. one It or is a a quarter, Flood It's went negative X.X. then Programs quarter, Then that of little go quarter. have I second in a uptick. a So our ways. portfolios of about could of part want you through flood, this -- our

There maybe less a nice weren't flood charged that saying zones before them of they for were charging certain remapped. that's now. certain charged that were were So things are or way

So zone, consciously some that nothing in flood has and the living changed a insurance your event buy significantly, up flood not people might, in goes decide to might, flood.

that the to Now I but sounds is know answer hard they believe might.

would So casualty-driven. are, the Programs our let's rest be of those National that say,

and write the have program, liability dentists and we professional on dentists. as we around dental that's an a So the example administrators country through

but to that to of lots program that dentists? pressure the did is exposure pull not liability in on someone wrong in Well, I pretty So rate slip hallway people business. tooth, other good their you professional want a way did write the is did But over of been has of -- of on get I'm of you mean that infection your or class of the there time somebody aware lot that. performance dental mouth, something the the chair. that, did there are

in in. risk an portfolio don't that Michael, a how about that's on think answer, indicative businesses That's we is saying the company bear long-winded of it. that insurance So Programs National you very of

are them and we money. our make behalf have on carrier partners to So underwriting of remember, we

have they rest depending year So year; the the outlined, just whichever that bucket how cons -- on going I it. I that's into you the referring and each describe to different pros are of

appreciate time. I Okay. That’s helpful. Thank your Powell. you, very

will Have question, a This day. be Yes. last Jake. nice our

for from We final one follow-up a in hear Fargo. from the Wells We'll have Elyse queue. question Greenspan

when any just you. financials. announced seems everything us right, assuming guys will can the us in place high deal's now? Andy, you low a you and question, else when that expense give the guys The update a of modestly higher. gave and my the on I'm kind of deal, -- kind stays interest that GRP you update but Thank on case closed you

Not at stage. this

so which, yet. third what information. do think we -- can as don't we'll again, updates deal GRP own both for spot Once far during BdB get have we more we businesses quarter, we since we're the closed on, well anticipating Again, the as the Elyse. is only I then you're applicable sometime just for get projections in once

accordingly. probably but adjust within it rate, we'll the So a is And the interest up that little overall gave. still bit we ranges

know Will segment? after And in I the then them backed I corporate -- Or will the they costs, -- in shift were think corporate the they but they quarter. closed? even will integration deal I you when remain for Retail they know the adjusted out within margin this continue of to

Yes.

divisions. If in back the the deck, a the look that of breaks we've schedule there earnings got you actually in them of by down each

schedule right to out in forward, have be clearly. places So and they corporate. going but in we able the will may different that nice you And be break other than or costs did for more

the Okay, great. for Thanks color.

Yes, thank you.

it. Thank teammates. performance profile about good all much. all of know we're would M&A performance of look business, the I and outlook most in in our excited forward pleased and That QX. another want on importantly, QX the very with our We're business, you to be very that the to very you margin let opportunities the the

over teammates under close the when XX,XXX to said, GRP the deals. I just have XX,XXX BdB just going we we and As today

the talking So forward to end of at to we you quarter. look next

you and time. thank for have a nice all You your day

your today. may And does now with you do you We conclude thank disconnect. this for participation for that, your and conference and ladies gentlemen,