National Programs Division

This division experienced the most challenges and increases in competition during 1999. As more and more players enter the program-type business arena, we have to work even harder to maintain our position as a leader in this area of insurance.

As part of our overall strategy, we took action in late 1999 to provide this division with the base required for strong future growth. We conducted an in-depth review of operational procedures and, as a result, implemented management and procedural changes and then restructured both the Professional and Commercial Programs sides.

While Professional Programs revenues were down by 16%, Commercial Programs performed well, with revenues up by 11% from 1998. We feel confident that with the recently implemented changes and an increased focus on distribution, we will again find this division leading the pack in margins and profitability.

Retail Division

Brown & Brown’s Retail Division has not faltered in its striving to be the best. The division continues to lead the way in tough-minded sales management, the recruitment and training of bright, entrepreneurial-minded individuals from all walks of life, and the constant review of its many industry partnerships and customer relationships, to assure continued success and growth.

During the year we continued to expand our presence through acquisition activity in Arizona, Florida, New Mexico and Texas, with the consequence that we are fast becoming as widely known in the Southwest as we traditionally have been in Florida.

All three Retail subdivisions – Florida, National and Southwest – achieved increases in their pre-tax growth, and both the Florida and Southwest groups exceeded 30% in revenue growth over 1998.

Brokerage Division

Throughout 1999 our brokerage entities – Champion Underwriters, Florida Intracoastal Underwriters, Halcyon Underwriters and Roehrig & MacDuff – continued to expand the range of services offered to independent insurance agents throughout Florida and in the Southeast.

As was the case with both the National Programs and Retail Divisions, Brokerage continued to experience the challenges that the ongoing soft market has presented for the past decade. Pricing did seem to strengthen during the fourth quarter and with hopes for a slight hardening of the market now on the horizon, the future looks bright.

In January of 2000, we established Peachtree Special Risk Brokers. Headquartered in Atlanta, Peachtree will focus on excess and surplus lines property insurance. While initially concentrating on regional business, it is expected that Peachtree will soon be national in scope.

The Brokerage Division achieved an internal growth rate of 9.6% and grew its pre-tax income by over 13% from the prior year.

Services Division

Brown & Brown Benefits and United Self-Insured Services both posted favorable results for 1999. Considering that competition for this business remains at an all time high, their results are a true reflection of our strong culture at work.

As with our other operating units, the key to their success is strong-minded management. These entities provide their clients aggressive managed care and cost containment, packaged with a thorough understanding of each customer’s needs. During the year, USIS processed over $75,000,000 in benefit payments.


Note regarding forward-looking statements