Sustaining Profitable Growth
Despite an increasingly competitive environment over the past several years, Brown & Brown has realized extraordinary growth and profitability. We believe that much of this success is directly attributable to the Company’s decentralized structure, which assigns authority and accountability for operational decision-making at the individual profit center level. This strategy has resulted in a lean, efficient company with remarkable customer retention.

Continually improving operations remains a central focus throughout all levels of management. Frequent reviews of procedures help identify opportunities for further savings or improved customer services. During regularly scheduled meetings, managers openly discuss issues and contribute constructive ideas so that each profit center benefits from the shared experiences of others. In addition, “Project 28,” instituted three years ago to challenge the Company to reach a 28% pre-tax margin by the end of 2002, provides for in-depth reports that itemize and compare 15 different operational categories of each profit center, giving managers both a benchmark and a road map to achieve success. Even the highest-performing profit centers benefit from this exercise, which enables them to methodically examine every aspect of their operations.

Eliminating Bureaucracy
With those closest to our clients accountable for profitability, Brown & Brown eliminates layers of redundant management and reduces high overhead associated with centralized operations. Decision-making is streamlined, and Brown & Brown’s managers are empowered to act decisively and react quickly to changes in the market. Through this customer-focused structure, the Company realizes lower operating costs and higher margins than many competitors with centralized operations and large corporate staffs. In 2001, the Company’s margin, before income taxes and minority interest and excluding the effect of 2001 acquisitions recorded as pooling-of-interests (pro forma pre-tax margin), reached 27.9% — a signal achievement in the industry.