Brown & Brown (BRO) 26 Jul 222022 Q2 Earnings call transcript

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

Second Quarter Earnings Call. Today's 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 second and our including future for securities 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 of as or or referenced number currently forward-looking number the uncertainties statements and a subject to future anticipated - results and are may any factors. made in a events a risks the differ materially desired currently from quantified uncertainties Such finalizes unaudited factors with yesterday, results the risks and that as in include differ to those time the Securities identified or company's the other company's release set and financial numbers may factors its that reports identified second and determination it press its in preliminary company time for financial the results the have current Commission. forth from filed the issued Exchange not quarter, made

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

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

begin. may You

joining our while us XXXX for had and quarter organically, thanks margins. call. Ally. EBITDAC We strong morning, Good for another expanding earnings quarter adjusted our digits you, Thank everyone, second double growing

performed business of half first year momentum. great Our the and well has during the

acquisition see very we teams month, be new the England, We'd this Additionally, on are couldn't to plan. more I'm pleased a more the Northern proven Ireland. executing of Partners X,XXX to our early in how than excited. and like welcome integration warm Global Risk completed extend Ireland and teammates to we our

let's and quarter. revenue $XXX Now We to Slide delivered I'm of transition number XX.X% the million organically. total for in XX.X% the X. results on growing

was basis an for margin adjusted the of quarter, EBITDAC the increase to XX second XX.X% of Our points quarter compared XXXX.

net and on adjusted share will in was presentation. more discuss detail $X.XX the financial reported as per an our results income in Andy basis. later Our

of summary, annual quarter also revenues during eight with this We I'm acquisitions the a $XX completed In very is Slide strong X. performance. million. approximately on

most to continued expand continued levels. with moderation traditional quarter, the in GDP During businesses more downward to slightly, even

labor we've seen rates. to interest quarters, previous shortages inflation, and businesses face As in continue rising

premium renewals, faster than increase the is company's revenues. For many growing in quoted the

past continue up outlier be on what of which to the wind were lines as pressure geographies, perspective, with XX% X% rates, rates X%. compensation customers. to XX%. to limits last to In XX%, consistent manage X% premium were remained or X% the across in across and X% how placement quarters. costs likely put replacement increased XX%. our of provide Cat property leaders increases. were being for were collective Consequently, influencing challenging their the remain with The margins rates range deductibles property and values are premium will an customers an heightened we couple on carriers and XX% down rates in to most focused focus prior were previous quarter, best up solutions to to accounts to losses market liability coupled rigor. multiple our insurable to continue environment creative increases issues liability rates X% workers' Similar range XX%. to and similar is From The rate while up capabilities increased and higher E&S and to have leverage like this, underwriting rates to through Admitted to continue to up earthquake landscape professional similar classes values, years. of relatively pricing increased for their of these in of modify All more materially year-end. to most over the carrier with The quarters than invest on certain limits companies for businesses. levels excess impact industries keep a availability with The sensitivity of

While June slight July. the we did in see decreases some company D&O public of Xst in and

story protocols. Personal is the carriers and to Florida aggregate California, property substantially the in and to challenging effective requiring security be cyber, Louisiana for Regarding lines due rates losses deductibles and increase continue concentrations. same to in with continuing

continue a will expect constrained appetite of end least into the on move of state Slide number the in these through markets accounts the at be We X. to carrier plans. will I'm year and

Now let's segments. discuss of the our transition and performance X

across organic exposure a of delivered an quarter, expansion. of programs. revenue, Wholesale driven X% new by led quarter business. growth lines history. growth great modest retention increases, division's is We in increase in new unit of strong delivered organic onboarding open Our organic with good Programs within business, solid the quarter Retail our growth robust growth expansion the our X% XX%. segment strong quarters good outstanding in rate segment a of This The good business. our most best in nearly Brokerage by business, business, of lender-placed as our of one was many with had result brokerage delivering customers retention, National unit exposure a and new growth, had

main less prior year revenue organic segment our events. drivers lines by The continued overall to related businesses. to Services the headwinds higher by activity our weather and for performance declined within Our being with claims travel cancellations X% be impacted personal than

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

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

second revenue of quarter, XX.X% revenue delivered the organic XX.X%. we double-digit growth For and total growth

GRP, run X.X% the and of net not Our acquisitions or and growth $X.X net million, income & The to impacted value for associated profit. compared from quarter diluted was the per revenue by quarter per incremental second year, which The our with net grew net we income and share rate in shares X.X% impacted the full yet BdB XX% by in as was associated increased stock for income $X.XX. last share realized the plan assets debt have the of Orchid of our of income primarily vesting this the incentive by to second deferred with XX.X% with our effective tax rate the to reduced and benefit increased of year. associated change compensation rate the plans. tax the market higher The

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

net year, on increased with second our Our per basis, slightly weighted foreign acquisition the movements average most quarter and variable to the EBITDAC and GRP, This in XX.X% XX.X% reconciliations grew to of the increasing of our increased gain Slide even XX on with and loss Orchid margin before to XX which dividends of BdB improving or On change increased adjusted costs adjusted faster an refer impact slide onetime with number year, X.X% points We're both disposals, of share income over in amounts the by for on than Please presents & or adjusted the our taxes compared and over to integration currencies expenses, cost. to these EBITDAC associated the XXXX. X. and an compared our $XX.XX basis, results. revenues excludes number shares by comparable prior back payables. results earn-out revenues on Slide the and basis income prior XX GAAP higher

diluted income X.X%. which net $X.XX, by grew was X% our share income Our per adjusted net by increased and

associated were liabilities and our and assets other in deferred For the expenses quarter, the the salaries operating compensation by related impacted and plan. with changes

expenses. As we've changes the before, within realize year-over-year, when offsetting these movements mentioned market we

and there in operating from the was strong and continued Slide other revenue, high As operating to and We're a quarter salaries outcome results are approximately performance great percentage our was of it a the on a offset X%, corresponding related Overall, of expenses. was benefit team. X. year-over-year the number

months. growth basis costs points X.X% Slide the Our decreasing growth for Retail revenue and XX. delivered increased grew associated activity last total EBITDAC year-over-year to revenue number XX.X%, over on the Adjusted organic of segment with such entertainment. XX.X%, quarter adjusted XX travel XX and due variable by as driven margin by We're acquisition of the

an impressive XX.X%, revenue Our was XX%. segment delivered total revenue National adjusted outstanding growth an of of performance. Programs growth organic This

line over the top by result XX.X% of adjusted strong the a As by due points basis margin increased growth, to XXX EBITDAC of leveraging grew to prior the and our year, XX.X% our growth with associated of as in the of customers our onboarding to expense base expenses revenue, well business. year as and the prior in lender-placed revenues relation timing new the in

to the on in half not second year, due of in second seasonally We're expecting with placed number the to fewer placements the the levels Slide revenue of more associated lender but business we quarter onboarding over year. the property XX. customers the Regarding the comparable and becoming our at recognized new we're growth, good prior

expenses. adjusted total revenue growth by X% XXX revenue Services revenues revenue X.X%, higher by margin XX. growth. organic the increased by due Adjusted primarily driven and declining delivered Our organic variable to total operating associated by of Wholesale Slide declined X.X%. segment decreased Adjusted points with X.X%, Brokerage number in substantially EBITDAC segment our year-over-year by on We're basis

revenues acquisitions unchanged changes from our provided margins previous to in June and at and outlook underlying due adjusted quarter, projections beginning a and number close of expecting the closed for these exchange GRP of We're segment. We're $XXX to end to XX. updated in EBITDAC or July wanted total we've XXXX million for by as the through to August range EBITDAC costs. at $XXX be the million, X, the of some In approximately the currencies, and fewer Since the revenues decreased provide July rates. non-recurring we foreign Orchid to $X result also claims we Slide million of XXXX anticipating an guidance. on are XX.X% BdB QX, are For the

recognized second for $XX conversion. of associated margins We be liquidity regarding evenly the adjusted approximately profit revenue with to of and these these anticipate which the cash they higher expect will Note revenues be EBITDAC with the and to comments segments continue slightly margins be should included in our that few this by Orchid. associated associated A year than We the million revenue with reported. businesses quarter. quarter results

the For XXXX, first we of flow cash from $XXX delivered approximately half of operations million.

certain operations as of to revenues was ratio to from flow first lower timing cash this generation the expectations original as the cash of our performed Overall, year for compared a percentage capital X and their payroll position. the are year. in of funding due months the XXXX. for months and This paying our performance in bonuses of of first ratio the X we Our The than in acquisitions to to prior as a in total teammates year have XX.X% compared over payment outstanding was the incentive XXXX. of strong earn-outs prior difference as higher XX.X% very

the we second line quarter, to as our It over leverage our have decrease post revolving our done is million credit. on also coming continue expectation the the to in repaid larger quarters acquisitions. During $XXX past we of

have Orchid rate the increased with & We interest acquisitions BdB on to will GRP, the of interest floating and related debt. debt our incremental associated

to of interest range result, year in quarterly As our $XX a for the projecting $XX the expense be million. remainder are the million we to of

to me very XXXX. This compared expect EBITDAC this the year, margins we back our increase for of costs with turn as lastly, travel represent Regarding to a $XX million to not it the then compared includes amortization to and slightly entertainment let half strong in such the for anticipate $XX And flat include this expense. increase outlook the would not variable adjusted acquisition closing but the performance over be to million be comments. year. associated With the We activity. Powell - given the prior or range of unannounced GRP, quarterly full and Orchid to second future amortization to or does for as year in does BdB the that, any as

Thanks, Andy, for a great report.

momentum and of for have a well lot profitable We us this growth. positions believe continued

matters of have mentioned economic supply navigate economy. continued the are constraints continue geopolitical chain well more positioned moderate cool to last these potential that resolution we normal the believe quarter, and the we As growth we federal levels, rate to headwinds. will and prospect further inflation to potential of increases, to said, With

than a end significantly of make all remainder the be or premium us remain in year. decade business We for Premium ago, to From should as this of the and the will subject in economy. slowdown we a experienced we a the second today of hurricane diversified an happens we what more E&S anticipate more rate admitted what should lower similar have quarter. to the markets standpoint a perspective, relatively through which increases season. to did for compared fairly resilient constant potentially rate increases year during slightly the is the From

are property Louisiana, be further to these continue challenging Florida increases both and and California, lines for commercial relates will to it and rate As likely markets than possible. more personal

customers. continue our to solutions deliver for We creative

good for firms History a that believe good has culturally progress new focused deliver our a make We're stakeholders. innovation placement sense simplifying value of on is will pipeline candidates get fit we on and we of creating in experience, the leveraging acquisition strong and the engaging when our data and innovation enhance proven customer performance which good coverage that to cultural making are alignment, with products. financially. have and we We our agenda, -

we're of and expanding diverse GRP, than is the and more very U.S. and more to we our the our teammates BdB and X,XXX enable our addition well In for tools and of our capabilities. with about our implementing enhance solutions the further experience efficiency in success In addition, the The them teammates feel spend we business, with will great Orchid executing for closing, time our fuel addition team to have talented Continental U.K., focused Europe. momentum capabilities how customers. delivering on

acquiring on companies. more we delivering winning might new focused great our customers, While the and present economy remain some challenges, for business

growth. these it in we've will that, session. to With done me the As for the long-term key let of drivers turn be over Q&A past, Ally our steady back

Peters [Operator our Greg Instructions] And Please go and with take ahead Raymond from ahead. James. we'll question first go

maybe are recession have organic Powell, headwinds, perform year think about Good And doesn't you and your about of questions spoke you I macro I listening morning, potential and spend to everyone. couple to us you. reflect comments a could a you you not. was know, talk what for relates And minute whether But in the in you're of about going seeing the we're to it over next this in face a talk market as to how or the your businesses uncertainty? that.

Okay.

although X, last So this let economist, college. than slowdown. me I first the were where not obviously said, in economics XX did major clarify. is are today X, That much I'm and where in we different - in we an is

a is in So position savings, referring better at to in consumer better one, intermediate let's Two, statements make least they and couple right the are a then were to near in additional today in were term. the of than get allegedly one. banks you to. of what the that time, broad Number period position with

It that does Well, values mean on insured a property. habitational, increase could whatever. it's seeing industrial, let's let's kind that going say, said, where of going And are it now also on, there's labor could be terms we unemployment XX-plus down things, market speaking, couple being rates different have not board, have now on replacement any much today, be - for was in say, is labor of to and you That could then. cost just rates what higher generally up going X.X% be have percent. the X%. the and And inflation up going were the inflation us? it You of then a across are we

saying way build for that's nice a you $XX a So square can't foot. back it of

That's they're is, so And appropriate XXX that's first number moving between into or underwriter. us the whatever the thing. and the

some we very is, and thing consistency, rates I hearing to are moving not second not in they don't in The be, rates as believe said, you're going that there's dramatically. drop

high businesses but the they've businesses be little business, they're going may rates depending two. instances, so speaking. had. best be may three, up. the although relatively are Number moderate to In a many the That's having They cautious. And bit, the on years continue number still ever

example. me an let give So you

to you the for the their next pipeline in off year If of construction business talk most is chart. the our customers,

work in So my That's point the getting is that's progress. pipe set. in already or they're

said, And our restaurants and so hotels. stuff that California They're coming going is lots going this all There the - of and full, are more people They're traveling Arizona. are to on stuff. to Florida. other to

I'm we whether a the it So gas prices, whatever be, or with case your are we inflation prices in haven't yet about although haven't or it's inflation, seen up customers. restaurant our - talking just might

you Andy, say to want that? So do something on

is I final this, really said and The thing you one it in I though, of, tell our that is other would comments. comment we're proud

today business is our in business Our much different than XXXX.

that we is And part So know. I And revenue but it, that of well. retail. we're I think And our you for that everybody are people than think are of a business this, know there maybe I I would that insurance to broker, some retail isn't think it's but want of XX% else out everybody performed that's kind diversified Greg, really our don't there because interesting. that other a say business. XX% retail, getting

customer positioned, clear we there, know And the thing. so honestly, diversification up base. yet it's let's other And one let's we're very seeing quite with we're not pleased our business. out of happening And but - we're how our yes, with

We are writing a lot business. of new

awesome. is that So

writing our deliver existing and we're a customers, lot customers. new we're of So to continuing for

So for opportunity us. a of lot this creates

Can the Thank you for answer. helpful. That’s we...

there. get to thought you than going more Little you're

little taken aback bit a I'm that. by

kind like this in your example. and Slide on [ph] upon X previous answered we Slide - good. and touched Slide you Can But construction pivot, bullet regarding provide in And in an the answer. analogy, X I know does what your there's of a XX, financially? the on of Where issue challenging. that's point both and mean I results? Slide of itself you that negatives and California, that to being us XX are Louisiana property pressures, manifest seeing Can & the positives Brown we So placement Florida, Brown

Right.

look way it. So the I here's would at

large we we book, Florida, - large particularly a in habitational book. have business, personal a have have but in our You lines

- examples. Just X are these

the large know, condominiums on You coast.

Citizens, we read We the there's of in anticipates but million not could with you and range number be And tomorrow, number million so what hand technical of year-end takeout as this, a of to that. rated a talked companies, two, term. Demotech high are the and flow about one, which about, - seeing up you've have is they're as Florida, $X to reevaluating don't got, possible. there by basket, out back in like it's anticipate everything which are you've you're - know, one. of state Number they as to in $X.X if towards business a come that's policies somewhere number or going I'm saying hell have they adjustments went that, They're today

relative think like into magnitude several Citizens these dollars moved things something our be That's we the that from that. the million order over a impact residential facility some in first part. in like so the the to properties or business, of of And of is neighborhood it, on could

mortgages, have is homes specifically But this but to rates I of haven't Dade, going got Tampa, yet, Coast large - part, West that Southeast instances, do and for that for expensive. that's Florida we your and second I'm not We're finger haven't Palm up the say, in which Beach yet hand any that their going me and on I the self-insure. is we who hard to Broward. understand, is, I raise primarily basically to their individuals some anywhere heard very heard much or lines I on seeing in of to mean, The are nice And in have but too insurance but County, personal insurance harder it. Broward but put who Florida, are talking Dade

California they're are And because interesting is they go either coming E&S or rates values very different pour the their mean are going because and out shift of Louisiana where in fair to or of as under lots the and I and than plan Florida of Louisiana, by in losses, substantially. California. have much the wildfires into to of markets an up market have in intense homeowners are pressure in having know, accounts the so they're that the the issue into they you what been market, you same has going are this although

in So residential Lenahan said, [ph] order If in Greg, long-winded one, a commercial is book quantified magnitude, we that - several to go it million because on options. answer, markets dollars. all coast. Florida actually for that commercial but opinion, That on is us haven't the of our E&S business most of commercial there's does not write our we of in that's on think that's basket. we business, to the saying, It's Citizens were write the

dollars… several it Is million

ahead. Go

Sorry, Andy.

Go ahead, out. finish then it your question, round I'll

million I dollars. about the several to was ask in retail? principally Well, that going Is just

would Yes, to that the delta we the all it another it retail, move if went and of commission had market, delta primarily rate. on to in to if the and Citizens and be

We wholesale and out see impact personal we headwind have that called don't of in material going for that lines. a we So still terms us. that as the

well positive and a - for run as it's component on programs the business, we retail the from look there. of the and do and in that about continue where across a book inside you good when from rates wind space to placement as be But a you we going, programs that us, there, of know, think the in the Greg, sized wholesale lines commercial just property have all will under pressure. if generally, So are personal you overall,

So that sure to make we want balance I just out.

the is currency. GRP, you integration? I cleanup Got revenue last BdB, for numbers question. That's did it. my some for revised for you push have just, question us you to about Orchid, Can Final talk

take you Yeah. that. I'll take –

going part and where to it's for & here in and team and up Brown the Brown of of Orchid's be Florida. First all, on pumped

little there. very integration So hurdles

got terms here. sharing and here we've summer, there know lot GRP, to our relates there. versa, coming here. there from Barrett information leaders it a to over and And leaders teams of senior good there, and and stuff going their vice got of time getting within of from We've over have in As in that spending in family leaders go all asked a we reason. I've period time teammates spend weeks This and carriers six customers to with teams of

will comments have And we're with and but structure going lot make a them there, going it and so a good what's but on we about I of Andy how stuff takes time. our to we and kind continuing of couple on this, And of stuff. we're pleased it reporting know all very, on very think to integration, get - the that with on

a So on little bit? want you to that expand

we're the Greg, got customers, and with way on briefly the way through potential covers integrating with that our everything bringing think in acquisitions are back integrating opening markets. carriers And we the the the all in go-to-market we Yeah. together. to we office, about from back. touched the the the we how engaging this How about go a expanding comments, front teams to and which but how we've proven

in the but is early our really So all really are teams direction, good. still going obviously, we all how feel which days, And good right collaborating. it's

for the answers. Thanks it. Got

you. Thank go yeah. next Perfect, question. We'll the to

UBS. with go We'll Please ahead. take our from Bloomer question Weston next

associated just that a those that. deal FX backdrop currently? recessionary guidance or My Are a GRP give lower there And the is lower Could with of morning. potential that economic environment? the revenue question into the and good the integration a baking could us baked that on first of you maybe follow-up hold assumptions? guidance additional sense into you're Hi, just

since Weston, devalued back we knowing it's the in rate look stage. exactly what sterling, originally spot euro XX did at well Yeah, we as so like as The a they both - the communicated over that this used not next that going months. has when had time, we materially what to here, March, in just

So the what on go - do updated FX are Again, to exchange around rates provide they we is if range going where wanted revenues to up. numbers if again the from those realistically move back were.

the the everything the got XXX to no They we running business. they're things from really is important So of had can how tell, performance little There half plan mind. the in margins which a businesses the range mentioned, that each still higher And the running what underlying in communicated of as we right the good. back probably in first XXX. a anticipated on their we we're we bit from is GRP front, keep our segments on into. and of to a expectation bit when that's very the couple had are for we The before. change A margins good of ahead be of the year little will slightly than going of

the good. business of is the health very So

and it's around move movement right going over to time, just is okay? to FX continue now, the of All

second then you switching year, of in guidance helpful. just That's the EBITDA maintained it. and and growth Got half that your over, does imply the And year. stronger for the

really from resiliency maybe the in And of environment other how could investment a you inflationary give either just second sense trend business, business? your broader the change does of us investments? talent invest guess, could I in half how hiring or gross spend So and you [ph] the

Sure. We'll two split pieces. this into

one for the - actually clarity, we've increased So our for we've year. full guidance

guidance we year up just the some the think little in first both to originally of the on slightly gave well recall, as still continued of strong in inflation the business from you we that the flat into a of now upon operating Based taking said consideration flat there's headwinds year, a performance as for half going when But and we'll we slightly. Weston, inflation, bit, to be As to the up down expenses. compensation standpoint, good. which is probably

today costs flight where are If ago. can airline definitely where the year an were a you've taken versus you see likely, they

trying take we're consideration. into So all to that

So how relates investing about you we as business in number as to one, all our know, it is teammates. about think the business,

and best today a customers was the said, rewarding hiring getting - on it professionally about for of Number that best Andy we focused two, interest on the our always the we're interest them a it. is of people. little be doesn't comment right challenging financially. looking made and but the obviously, We're people the than doing, team, we're about right to that's personally grow mean ago, the to some in work and them, differently That going costing S&R. That's number and So think year for the one. bit to travel. that That's reflected -

saw Let's business just quarter. the And talk in an second our about uptick in plane hotel T&E flights we rooms. in and

so as and is going out was to he at we're to do years a continue And than people higher ago it more go and the And X cost to customers year ago. present, today for see or go that. that to see things, events

just keep mind. that in So

we're looking fit third about cultural sense all is doesn't The about And acquisitions. is the it's and make financially. thing acquisitions answer always for because

don't We intermediate anything be we embellish purchase invest as do and to transactions expand of into have out a we in meeting increase to of firms. different either to or us that seen are term. effect when capabilities. and opportunities think not Fed and number people the is a near a continues very businesses new But great with price people for for the different rates capabilities in why actually indication will in multiples be But anticipate existing there to or that continue any that that any coming to down result will

Great.

integrate of Or I multiple is $X $XX in a maybe you if opportunities did much M&A the on comments. deals and How quick were million you eight of a deal million activity you know follow-up Or historical reflection that the up for had trends. was was that just kind M&A? those the of you saw environment? versus down Just the quarter?

It And latter. in the get was the It number we up think I really thing Weston, here's caught was. don't of the transactions.

do important. a do we all that's more we up we XX, don't we think it's or That's do in we about do whether not than criticism, in do eight, I we that, caught three, right the whether it, firms. whether investing none but get whether

quarter. eight GRP in interesting. Now it's second just businesses of coincidentally, kind bought the

it's not statement, or a a just there. that's here and - that's So

financially fit And firms anything when look so because other the when or we we it's think right don't up and than down culturally sense that. themselves, that of it at present make as

the color. Thank for you Great.

Yeah.

Thank you.

our question And with Please Stanley. go Michael ahead. Morgan we'll take from next Phillips

numbers morning. up driving deceleration something from side, is to Powell, slow, somewhere pretty were that that mentioned the is back Or little some bit Good heard a on of line? same that's guess, you quoted. broad-based specific property the thanks. that? that rate your that again. of and Is by admitted carriers lines, Hey, I the we've kind not gone you if is

Remember, way. let's this look at it

downward going that pressure, see you're see Let's might paid, the to talk may as rate if in if that's some challenging, much. not umbrellas. to I there appropriately, Excess liability, claims pressure see number to more increases continues two, the Number you think the be being see it it's primary, you number continues priced under cost the accidents importantly, the be you areas pressure. are and where of of about one. Automobile because of that's

this You heard us is board. of under about the - across pressure. talked kind We umbrellas that say and

highly placements primary from into at [ph] and that pullbacks the portfolios. around compensation like down continue know what a to limitations Cat continues. or one is That's where think, carriers. carriers them admitted I property - reinsurers even I X% standpoint from admitted. rates look You being X%, and any their talk Part a property Siemens into not property it the to that. was. property, of But is large of – workers' of driven the And reinsurance

So want it's conceptually would be it's reduce that do, and any would than speaking, Carriers there's like diversify a of their ways portfolios. interesting out Broadly broad to of what to property kind how easier their - carrier books to volatility and some statement. business. That's carriers are a others. figure viewing for

Thank Okay. makes That you. sense.

question I the confirm, Second want side. or to all on numbers at the kind anything a on Program. is that Obviously, just was really strong of National organic [indiscernible]? one-off there

Good Andy here. morning, Mike, it's

Morning.

many the coming that drivers there all the we inside year the in quarter say across and of some in good business programs. big expenses the Programs talked as and before there. was final about, our few we've make The saw unit had we retention, last We we're [ph] revenue had was expansion on the different this talked National business. of new about this a and some around. we quarters, on-boarding And placed was good really would exposure I seeing our in one-offs of addition, we starting a customers lender lap for

that's love expecting National for think So earlier - the we but - organic a would organic it. of it the just the driving we're really, is will the of down. of was And majority increase. back we of at the comment about basis. a slow end but quarter. part what good lap the growth the lender That's year part making on good Program we anticipate place, is still segment, in just it but It be has why more really the not made the that comparable that it on XX%, the We would

when the we the business, than this less property mind, in have Now have that and is we third the quarter. quarter, we third keep to second in traditional what in quarter head in placements

So if dip in in at normally to quarter third you look does it little others. bit the a down organic, the comparison

So if you pretty look over history, trend. a that's traditional back

you Thank the Andy. okay. comments for it. Appreciate Yeah,

Thank you.

ahead. next our Fargo. Please from Wells take Greenspan question Elyse with We'll go

spoke headwinds. morning. some slowdowns. But Good really stay Powell, macro prior right, seeing expecting, said and thanks. - to compare right guys necessarily what Hi, aren't - recognize yet. I you're you you did you this them about wouldn't that

have mid-single hasn't a digits. inflation, you right, typically environment Brown Brown mentioned, said in also environment. that know, you pricing Historically, you grow guided organically, good As necessarily you still but & around steady-state guys

rest those XXXX the how I reiterated, the well? into and of you playing about growth as see you you organic when do just mentioned out factors think that that over the year environment So

know But guidance I businesses. our as in ask business give So Elyse. every of our appreciate you growth quarter, I any that to we're or retail - that going not know, organic you

that we been to everyone to our I've in to going said businesses And to can to doing. look correct far number first makes lot expand our we've And that We're on for chew sense are continue that allow to that historically capabilities so that culturally new of in to Number our to you which a create organization. we're capabilities to those we're is have just existing three, short continue and successful business, going But for they was there or the either - of that out That's and kind put typically capabilities two, what going and fit You're and write try financially. customers. answer saying on our new businesses in foremost. growing organically service the this. community. investment

So about can I'm But sorry. not me We we to but going really do feel I something know feel a hear on that. We the you'd business. differently good economy. about can't control the good quarter, what like I'm say to certain control. we

we and but do be the for great go a have year, not our organic seen And so business. customers, we impacted and lot business this you've results or write out that's what a year last new how accordingly. of new growth, seeking our can aggressively is job do can can we and positively we And only

GDP historic GDP. the levels. down goes quarters number normal It's about what don't over moderate levels. at this in to the We is anticipate got back last least consistent to We more to quarters. moderate there we're that knows going is there. Yeah, But the the can down future. to coming And said Elyse, quarters, as off we going coming to economy continue with out get a that's just on negative, it over order who what but to in normal happen that to highs comment we think of more of almost take itself think

how the feel we're over it we positioned really today. upon our how trajectory is depending time, actual it but of influence So will business good with

second is margin the on my then And side. question

in of the year. half XX the saw expansion the - don't of start the basis Andy, right, better-than-expected a year. lap the coming last half first margin back T&E of some updated reflects kind mentioned, guide in points the the guys We of right you of year. You better to second that

easier the fact than you overshadow might T&E the just in So some does conservatism come still is year, it for guys margins more in that inflation back just the at the that around half? comp should flat that reflect

out. back think may potential the comp a that take tailwind inflation the into we yes, mentioned into on incremental year, that easier areas be I as little earlier, bit some with of that we the the originally look - we anticipated would that

us look back in So good with feel don't really just like we really the but the business. the out conservative. leaders a little of what we'll see their the the all of our across in We organization, and year. exactly really, and numbers managing being with the just bit end a I end to know job how expenses how play do investing good are going it's the ultimately back year,

amount. a your one investment a of seen greater Can start then share We've give income? see guys sense for how move one. And last good potentially could to you rates benefit a you us just that

are a of fiduciary spread in income millions for X%, had significant there's I of banks Yeah. is, - a is that to a of up businesses not see, Because And a don't out there's - some same that rate, underneath. the comments us. every But the thing equation if one. done know other this flow - going Fed is always again, takes the drops sort some we dollars be about driver the comments increase X% the We on rates in we've And that I something revenue different It for that not a and upon this up they through just delay. back always have us. won't of to that make historically is think time, that, there. come the millions their there other different in calls few is if out profile on by know from you rate brokers Fed at has over even look that maybe the for

reality, that's that happens not In yes, really theoretically, sense. makes out what there. So that's

is, the incur there do we are by our partners cases, up cannot only many then and it. our this capital managing us can. a I or the states carrier mentioned all great bank to either restrictions to place fees we've that we that interest allow of earn we the earn by the extent fiduciary that, side, on put So to the after the we fiduciary Also, in of in job extent think and the that past in

a So again, fiduciary that's funds portion out that there. of our are

color. helpful. the That's Thanks for Okay.

Thank you.

Hughes question our ahead. take next Mark from go with Truist. We'll Please

Yeah. the Thank on you of in commented appetite. I presentation, losses you. reduced and magnitude was driving the frequency

or our severity are on replacement certainly losses. anything up? Just you there your loss making touched You frequency curious. point claims, among trends perhaps picking about broader and of and you wildfire the or about seeing talking property maybe customers carriers the maybe a any coastal issues, construction Were broader costs inflationary really

there frequency. loss that don't But in - for be, not I a which line on is - want of there class subliminal I be we wasn't the whatever a see it, of marketplace you instances, Yeah. the state message I impression. the the there. to some to sure, of may was business, give and on was give just a you trying higher case the the depending business, may costs. pressure how

was year higher they're moderating X the could but at slightly, support pressure ago. X or underlying implication and to saying, paying than at be that on today the upward rates, or pace years the years, - what a I'm that trying the slowly pressure were moderating. a for have just down That's on rate they That losses happen just was an a albeit Mark. slower out they So going are

I that. you I'll Are signs you workers' slower it's of think I comp, there appreciate inflection? declining Yeah, pace. Or Do What any you implied an of think kind inflection? that do hits this. a ask you that think any at

don't no, case rates about don't, that we've me the seen I've nothing remember, whatever the be clear business. that's much there's the or let in be. I I compensation think But hit the because is that some - question The workers' may driving bottom that. that as the to Yeah. me on payrolls as personally, answer there's what's

business up, And or payrolls performing are economy our expanding is then the so going is if typically, better.

a business. the seen therefore, a environment, have very been. it payrolls low our you today because that on that's a it's actually, And the higher it's typically. on lower has and pressure is in because than present exact haven't pressure downward high At So wages the unemployment unemployment we opposite time,

a a that from to believe workers' offset that's - any term, about. the near we X% typically intermediate in I which compensation, therefore, X% of positive So downdraft negative that's talked that to

Yeah. And then finally, a one. quick

the about you very talked the pipeline Florida more within centric? that good construction country? across sector. Is that visibility You Or are seeing

just and not it's commercial. both. residential, everywhere, That's It's it's

you. Thank good. Very

you. Thank

next question our from go take we'll Cox And Robert Goldman with ahead. Sachs. Please

property Hey. premium how inflation? from been inflation Can insured has you aside are And you're seeing talk this and lines, from you seeing audit into about what the process work year values? how its way material benefits areas

can You take if that, Andy, you to. want

decreases advanced we've or Good quarters, been but morning, over Robert. the increases Is an there's material in last we've from in seeing the what been the audits. no audits been least few is at and position,

the or So guess in having this end. year. insured values half feel major to on the be, to payrolls, a the back seeing their the at or first big No, materially trying insurance I and whatever there, then adjustment understate for of you're case anything if not might we're get least trying a

Got it…

me your values. let address question and inflation about Yeah, to try insured

So remember, I'm just just going computational to make it property. let's simple, use

anything condominiums, of be be could that sort. that could So be that apartments, the could

as population cost E&S we the just an look and not that And admitted underwriters, this Florida, does of and business right. in in at sake California, a write states, values there. market in For looking saying Texas in both replacement discussion, the it let's of Large lot market basically, are anywhere put or example.

there's pressure the in And increase. addition rate therefore, a upward so to embedded there slight

continuing no year. done are the values looking just to insured get see in can it to higher had we in we've think we instances, I can a be So for buy can are that. look, that. increases underwriters we say, way - some all than mean And in there's

issue And is there an going on so there.

would marked to the increase around the point, most following. be - most standpoint inflationary the an So from your

give you Let an me example.

yourself, get car personal not your a an actually you a have fault. You in accident It's that automobile accident.

just that and fixed. up, jeep, needed get a drive to you You made

and it more, cost to going is get. part to longer the So takes

that essence, is you insurance used two rental done you of the or the when person it six car weeks So for weeks paying in eight for weeks. in company be hit a to

of costs have it wood an away Case higher - case to the this be cost cost to people, the total the the claim. site the So may or goods or got example. and you is is more, point, and increases there, in products whatever the and it the cinder is you site, loss there's installing which cost fire additional cost job would a higher. get be. of That overall right to Those get more the block

the - So kind there. the you It's board. across have kind trifecta the of of

enough, you fashion So seeing rate, would this, obviously, all you we're high didn't a going similar of but that we're is inflation here, our seeing segments ask it I in there. Robert, same that the seeing thing of as kind in and Interestingly England, so business. kind is on tell in of their it we're

regarding light of your increase And Thank question, going expand. and rising you. acquisition talk the why rates? in for that to Can interest your bit continue in to about just little That's second just very you back presentation just they multiples would to a continuing helpful. comments

Okay.

grow. there So on depending the number you to who out ask, of continues acquirers

and companies. so public us strategic other And have like the you buyers

private equity, equity I then are look but have backed different buckets. That's then term will don't firms kind are trying And the in by have are at get which which way you of short in You have sold. they typically that businesses private buyers that - that businesses. the to have and be nature,

to said to money heads sounds, so-called to up that don't be you And have firms asset an want pay Having as to and take returns able get not that they're to put when that, lower as work. around that we crazy to would so our evaluation. willing willing say they may that be in, they business for a and have for or they businesses get

So may work. to but to of they're to a take they that project return X, money willing of X half put

very long so And the we again, invest term. for

for And build our to try all we thing of invest about value long-term high-quality our right will do customers. in are We manner stakeholders. that for a the people that the all

up of So what, price again, well, is a mention, thing purchase they're do other flat or that people say, multiple want they're I answer I think or the the And price to high multiples, they're which or purchase okay. whatever.

on a lot make and So broker let's make look a the gussy banker it of that. sure business we're than reality up An life. clear or forma better pro a investment can

the what? find it a so And ongoing ongoing based the an what? again, it not of so Is those projections a Is true of it's a And I real earnings? think multiple will the it multiple concern. we interesting people are the on don't very buy multiple adjusted it's because what indication Is of multiple - of earnings? it of

look that's the a at I Thanks So Robert. it. way lot,

you. Thank

go our last from and ahead Yaron And Please we'll go with Jefferies. ahead. take question Kinar

first Thank you. My [Technical Difficulty]

Yeah, We're is not up. to able headset Yaron. hear you your breaking

us? Can you hear

can't Yaron. Yeah, you, hear we

don't your why Yaron, do work you We this, can't on right. Why hear you. don't headset. All we

I question got another that queue. we've one and think in back. We'll we'll take come

There we go.

can Yeah, Go hear we ahead. you.

growth range? that that. sorry would My the margin that range. margins Or guidance of by around be are or be there It drivers going margin that Is year-end? you'll achieve organic driven really end to of was Better through slightly now, level up. about question impact to either at would other of the the flat that

it in Yaron. of be there, number a things could Yeah,

be potential will we have, well the be So on back the as the of entertainment travel end of other operating drivers. just one that organic would costs There the inflation in year, and costs as salary.

a of of those be of all to going it's kind So combination together.

of We trying those our into each specific weighting just one but put take of on a haven't consideration. all to in guidance, them

couple I the have Okay. And on of then M&A questions a did front.

since contemplated in you guidance? on that were already the correctly those announced if hear eight GRP the so, you I saying executed did And one, eight deals So acquisition? deals in

no. No,

different comment. on two things So that

that this mentioned, quarter, So were during Yaron, those had the that the we year. they the had completed second ones eight

then And you completed anticipated transaction. we're all three And - or already. the of had. the were kind of just trying quarter almost on to this overall part all activity perspective they of those of they've two as give already that So

currency? BdB based Orchid, those paid local they the EBITDA currency? currency? earn-out for on would in they Okay. out earned GRP, and local And And are in then in And all local are be

their Where yes, are in there currency. earn-outs, those functional based are

on margins to if one, Orchid dollar quick could. GRP going any U.S. BdB final Are And different from a base? be the Okay. I and

the segments expecting FX mentioned higher margins should The is the margins be actual the the from will a we're which impact for three those this - margins have in and earlier, operate. to on slightly In margin… than they minimal we businesses

Okay…

percentage, because around. will sorry, not that dollar margin move The margin

Right. Understood, thank you.

Thank you.

Meyer we'll question And from go ahead. go to with last Shields Please KBW.

very thanks. it's current I are Really know thin thinking colleagues economic about your Great, what [ph] can quickly, and European growth there? share you future

give Well, remember, guidance. don't organic we growth

inflation to we So almost and at in that it. much environment the gas to how do you impacts everything the the look our terms - from same we European supplies and XX% teammates way food of being name

and new customers base bring there we about solutions it. of so to business as and being is there the ability ability feeling serve existing a our But innovative similar customer an and to our about and is here optimism there mindful them. And write the have new to

that, inflationary cautiously you tell to they're the would optimistic. pressure, I So would say I as relates it

As enthusiastic to would relates they're extremely business it say and optimistic. operations, I

then XXXX, what the look next should Programs second baseline Fantastic. impact for the quarter National revenue? we any one Or we the have to far you've understand make it. at sure to reported in last just year's that of will we question, look first so and Okay. there? And right onboarding When

compare of don't of onboarding, yes, part dollars, the lap is you're for from. impairing because good for but work yes, that the dollars would the comments the making around growth be to If percentages earlier that our

so Thanks much. Excellent.

Okay. Thank you.

this forward I'd growth with We're wrap and with say quarter for for joining a great we margins, thank a earnings like day. us up, and look We're pleased we Ally. this time. and adjusted to talking improvement EBITDAC very you right, our next you All XX.X% our to quarter, our to going Good organic slight call. everyone in wish you to

Thank And that call. with today's that, you does participation. for conclude your

disconnect. now may You