Brown & Brown, Inc.’s BRO second-quarter 2026 adjusted earnings of $1.07 per share missed the Zacks Consensus Estimate by 0.9%. The bottom line increased 3.9% year over year.
Revenues of $1.67 billion missed the consensus mark by 2.9% but increased 30.4% year over year. Acquisition activity supported the top line, while organic revenues declined 0.7%.
Brown & Brown, Inc. Price, Consensus and EPS Surprise
Brown & Brown, Inc. price-consensus-eps-surprise-chart | Brown & Brown, Inc. Quote
BRO's Q2 Details
Commissions and fees rose 32.4% to $1.65 billion, while investment and other income declined to $22 million from $36 million.
Adjusted EBITDAC margin contracted 100 basis points to 35.7%.
Adjusted net income attributable to the company increased 18.4% to $361 million. However, a 14% increase in the diluted weighted-average share count limited per-share growth. GAAP net income rose 24.7% to $288 million, while diluted GAAP earnings increased 7.7% to 84 cents.
Brown & Brown's Organic Growth Slips
Organic revenues decreased 0.7% to $1.18 billion. Organic revenues with contingent commissions increased 0.7% to $1.24 billion, supported by higher profit-sharing commissions from insurance carriers.
Core commissions and fees increased 30.3% year over year to $1.57 billion.
Investment income and other income decreased 39% year over year to $22 million.
BRO's Retail Segment Expands
Retail revenues increased 35.9% year over year to $947 million, primarily due to acquisition activity. Organic revenues advanced 1.5% to $678 million, while organic revenues with contingents increased 2.5% to $692 million.
Net new business and exposure-unit expansion supported organic growth. These gains were partially offset by declines in catastrophe property rates and lower revenues from a specialty pharmacy business. Adjusted EBITDAC climbed 46.9% to $282 million, and the margin expanded 230 basis points to 29.8%.
Brown & Brown's Specialty Unit Softens
Specialty Distribution revenues increased 28.1% to $721 million, aided by acquisitions and higher contingent commissions. Organic revenues, however, declined 3.5% to $498 million, while organic revenues with contingents fell 1.6% to $545 million.
Declining catastrophe property rates and approximately $10 million of new-business timing pressure weighed on the segment. Adjusted EBITDAC rose 17.1% to $308 million, but the adjusted margin contracted 400 basis points to 42.7% amid weaker organic revenues and investments in European capabilities.
BRO's Costs and Margins
Total expenses increased 32.8% year over year to $1.29 billion. Employee compensation and benefits rose 31% to $838 million, while other operating expenses increased 28.4% to $271 million. Amortization more than doubled to $110 million, and interest expense increased 96% to $100 million.
Adjusted EBITDAC rose 27% to $598 million, but growth trailed the top-line increase, resulting in margin contraction. Adjusted income before taxes increased 17.4% to $480 million.
Brown & Brown's Cash Flow and Capital
Net cash provided by operating activities increased 13% to $608 million during the first six months of 2026. Cash and cash equivalents were $918 million as of June 30, down from $1.08 billion at the end of 2025.
The company repurchased $250 million of stock during the second quarter. Brown & Brown also paid $112 million in dividends and declared a quarterly dividend of 16.5 cents per share, up 10% year over year.
BRO's Market Outlook
Management expects rate changes across most admitted insurance lines in the second half of 2026 to remain relatively similar to second-quarter levels. Casualty and auto rates continued to increase, while property and workers’ compensation pricing was flat to lower.
Excess-and-surplus casualty rates are expected to keep rising because of the legal environment. Brown & Brown does not expect catastrophe property rates to change materially in the second half compared with the first. Capital deployment will focus on share repurchases; internal investment, debt reduction and acquisitions centered on specialty businesses.
Zacks Rank
Brown & Brown currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Selective Insurance Group, Inc. SIGI reported second-quarter 2026 operating earnings of $1.95 per share, which beat the Zacks Consensus Estimate by 13.4%. The bottom line increased 48.9% year over year. Revenues of $1.37 billion rose 4.5% from the year-ago quarter and topped the consensus estimate by 0.7%.
Net premiums written declined 5% year over year to $1.22 billion due to a 6% decrease in Standard Commercial Lines, an 8% fall in Standard Personal Lines, and a 2% decline in Excess and Surplus Lines. Our estimate was $1.33 billion. Net premiums earned increased 2.3%. Direct new business fell to $206.1 million from $248.1 million. Renewal pure price increases averaged 6.5%, down from 9.9% in the prior-year quarter.
Chubb Limited CB reported second-quarter 2026 core operating earnings of $7.26 per share, which beat the Zacks Consensus Estimate of $6.63 by 9.5%. The bottom line increased 18.2% year over year. Revenues rose 2.7% year over year to $15.77 billion but missed the consensus mark of $15.90 billion by 0.8%. Stronger P&C underwriting, record investment income, and higher life insurance income supported results.
Net premiums earned increased 5.8% to $13.89 billion. P&C underwriting income increased 18.8% year over year to $1.94 billion. The combined ratio improved 180 basis points to 83.8%, reflecting a lower share of premiums consumed by claims and expenses. Our estimate was $1.15 billion.
Principal Financial Group, Inc.’s PFG second-quarter 2026 operating earnings of $2.50 per share beat the Zacks Consensus Estimate by 7.3%. The bottom line increased 16% year over year. Revenues rose 6.4% year over year to $3.99 billion, which missed the consensus mark of $4.09 billion by 2.4%.
Total expenses increased 7.6% year over year to $3.41 billion. Benefits, claims and settlement expenses rose 8.3% to $1.99 billion, while operating expenses increased 8.1% to $1.40 billion. Non-GAAP operating earnings climbed 12% to $547 million. Excluding significant variances, operating earnings advanced 13% to $528.7 million, reflecting growth across the operating segments. Net income attributable to PFG declined 1% to $403.4 million.
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