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Public Broker Performance Vol II, Issue 8

MarshBerry Broker Index

Get the latest performance and insights on the public broker composite.

Marshberry Broker Composite Index: Market Update And Q3 2023 Earnings

During the period from January 1, 2023, through October 31, 2023, six public brokers, as measured by MarshBerry’s Broker Index, outperformed both the Dow Jones Industrial Average (DJIA) and the S&P 500 Index, indicating the strong fundamentals and relatively recession-resistant qualities of the insurance brokerage industry.

The following publicly traded insurance brokers are included in the Broker Index: Arthur J. Gallagher & Co. (AJG), Aon plc. (AON), Brown & Brown, Inc. (BRO), Marsh & McLennan Companies, Inc. (MMC), Willis Towers Watson Public Limited Company (WTW) and BRP Group, Inc. (BRP).

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Q3 2023 Earnings Results

Insurance brokers announced overall favorable earnings results for Q3 2023, driven by a combination of improving new business, ongoing insurance rate increases, and strong renewals. Organic growth figures reported in Q3 2023 were generally comparable to those seen in Q2 2023. Most brokers reported organic growth rates in a range of 6%-19%.

  • Marsh & McLennan Companies, Inc. (MMC) reported Q3 2023 organic growth of 10%, compared to 11% in Q2 2023 and 9% in Q1 2023.
  • Brown & Brown, Inc. (BRO) posted organic growth of 9.6% in Q3 2023, below its 11.2% in Q2 2023.
  • Arthur J. Gallagher & Co. (AJG): For AJG’s combined brokerage and risk management segments, AJG posted 10.5% organic growth in Q3 2023, close to the firm’s Q2 2023 organic growth of 10.8%.
  • Willis Towers Watson Public Limited Company (WTW) posted 9% organic growth in Q3 2023, above the 7% in Q2 2023.
  • AON plc. (AON) had organic revenue growth of 6% in Q3 2023, compared to 6% in Q2 2023.
  • BRP Group, Inc.’s (BRP) organic growth in Q3 2023 was 19%, compared to Q2 2023’s 22%.
  • Ryan Specialty Holdings, Inc. (RYAN) reported Q3 2023 organic growth of 14.7%, compared to 16.1% in Q2 2023.

The Macroeconomic Environment

While some insurance brokers saw the macroeconomic outlook as somewhat “uncertain,” including capital market volatility and geopolitical uncertainty, many also saw continued growth for their firms and that of their clients.

Ryan’s confidence in the strength of the E&S space continued in Q3 2023. Chairman & CEO Patrick G. Ryan commented on the Q3 2023 earnings call: “The E&S marketplace remained robust, providing solutions that are otherwise simply not available or hard-to-place risks. We expect this trend to support our growth and continue for the foreseeable future.”

MMC President, CEO & Director John Doyle commented on the Q3 2023 earnings call about concerns about the macroeconomic environment. Doyle spoke of the macroeconomic outlook remaining “uncertain,” with capital market volatility and challenging geopolitical situation. However, he believes that MMC is well positioned to perform across economic cycles.

Mergers & Acquisitions Activity

AJG had another active quarter in Q3 2023, with 12 new tuck-in acquisitions representing $57 million of estimated annualized revenue. AJG also signed agreements to acquire the insurance brokerage operations of two banks – Eastern Bank and Cadence Bank – with total pro forma annualized revenue near $275 million.

BRO’s CEO, President, and Director J. Powell Brown noted: “Regarding the M&A market for the quarter, the level of deals primarily from financial backers continue to slow, and we generally saw fewer bidders for businesses.” He also noted that while valuations softened slightly, good businesses still trade at premium multiples. BRO acquired seven companies in Q3 2023, with annual revenue of $14 million. BRO has completed 20 total acquisitions year-to-date.

Public Broker Comps

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*Results as of Q3 2023; Accessed 11/20/2023

The MarshBerry Broker Index is a composite of market data on the following companies, sourced from Yahoo Finance: BRP, BRO, AON, AJG, MMC, WTW.  It is prepared for analytical purposes only. This information is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any securities, financial instruments or to participate in any particular trading strategy.  

This earnings summary has been prepared by Marsh, Berry & Co., LLC. and is not intended to provide investment recommendations on any company. It is not a research report, as such term is defined by applicable laws and regulations, and it does not contain sufficient information upon which to make an investment decision. These materials are based solely on information contained in publicly available documents and Marsh, Berry & Co., LLC has not independently attempted to investigate or to verify such information.  

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