Brown and Brown 1Q16 Earnings Call Notes

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Brown & Brown’s (BRO) Powell Brown on Q1 2016 Results

ACA reporting remains the forefront

“ACA Reporting and Compliance remains the forefront for many of our customers and a concern for many of them was the completion of the first major ACA reporting requirement, which occurred at the end of the first quarter.”

At some point there is going to be a wind event in Florida

“it’s been 11-years since we have had the last hurricane hit landfall in the State of Florida. I’m 48-years old and I can tell you, I remember every hurricane that has hit the State of Florida in my life time and it usually is every 10 to 14-years. That is not saying that we think there is going to be a hurricane this year, but at a point in the future, there will be a wind event in Florida and that will intern modify or change the marketplace.”

Valuations are high but M&A activity is not slowing

“From an M&A perspective, the activity in the industry is not slowing. While valuations remain high, we continue to look for company that fit culturally and make sense financially.”

Technology based insurance brokers may not understand the complexities of particular risks for larger customers

“what we found whether it would be in personal lines or in small commercial. There are certain complexities that come with risk particularly as you as an individual or as an business start to accumulate assets which they may not be familiar with the coverages that would be appropriate and so there is a possibility that they have what I call coverage is stripped down that maybe cheaper, cheaper, cheaper. But they maybe buying a Yugo as opposed to a Chevrolet or a Cadillac. And so and do they actually know the difference in the coverages and so I’m not aware of anything yet ”

Tech companies have done a good job of sizzle but not not in terms of executing on making money

“What we say so far though, so far is the technology companies that I’m aware of, they have done a good job of sizzle in terms of the marketing but I don’t think that they have done as well a job in the execution of the plan where they are able to make money over a period of time. “