Brown & Brown Financial Model
Insurance Company Financials Example (Free Excel Download)
Brown & Brown, Inc. (BRO) is a leading global insurance brokerage firm that provides risk management solutions to individuals and businesses.
professionals from Deloitte
Used by professionals from
About this model
This model provides a comprehensive equity valuation and M&A capacity analysis for Brown & Brown, enabling an equity research analyst to forecast organic growth, evaluate the margin accretion of recent acquisitions (such as Accession), and determine the intrinsic value of the firm's shares.
Brown & Brown, Inc. (BRO) is a leading global insurance brokerage firm that provides risk management solutions to individuals and businesses. The company acts as an intermediary between clients and insurance carriers, earning commissions and fees for placing property, casualty, and employee benefits insurance.
- Business Segments:
- Retail (approx. 58% of revenue): Provides direct insurance products and services to commercial, public, and individual customers.
- Specialty Distribution (approx. 42% of revenue): A newly consolidated segment (combining the former Programs and Wholesale Brokerage divisions) that offers a diverse trading platform for insurance carriers and niche solutions for brokers.
- Key Geographies: Primarily the United States, with growing international operations (generating approximately $843 million in 2025) in the UK, Belgium, Bermuda, Canada, and other regions.
- Business Model: Asset-light, commission-based intermediary model. The firm carries no underwriting risk.
- Competitive Position: One of the largest independent insurance brokerages globally, competing with Marsh McLennan (MMC), Aon (AON), Arthur J. Gallagher (AJG), and Willis Towers Watson (WTW).
- Recent Major Events: In 2025, the company completed a transformational acquisition of Accession (RSC Topco, Inc.), funded by issuing $4.2 billion in senior notes and $4.3 billion in common stock. The company also restructured its reporting segments in Q3 2025, merging Programs and Wholesale Brokerage into Specialty Distribution.
The downloadable Brown & Brown financial model includes SEC-sourced historical financials, forecast assumptions, core operating schedules, and valuation outputs in an Excel workbook built for review and scenario analysis.
A turnkey financial model
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
Historicals & AssumptionsBrown & Brown financial modelCompany, Historicals & Assumptions used
Source: SEC EDGAR · values in USD
| Line item | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue | $3.05B | $3.57B | $4.26B | $4.80B | $5.90B |
| Income before income taxes | $762.8M | $876.1M | $1.15B | $1.30B | $1.37B |
| Other operating expenses | $402.9M | $596.8M | $649.9M | $710.0M | $959.0M |
| Net income | $587.1M | $672.0M | $871.0M | $993.0M | $1.05B |
Forecast assumptions
Defaults used in the downloadable model. Forecast horizon: FY2026–FY2030.
See 8 moreSee less
How to build a detailed financial model for Brown & Brown
A complete walkthrough of every driver, margin, working-capital input, and capital-allocation assumption used in the downloadable model.
Revenue Deep Dive
Retail Segment
- Revenue Driver Formula: Prior Year Retail Revenue x (1 + Organic Growth Rate) + Acquired Retail Revenue.
- Historical Growth Rate: 8-12% total growth, with 3-5% organic growth.
- Key Growth Levers and Headwinds: Driven by insurance premium rate increases (hard market vs. soft market), economic expansion, and bolt-on acquisitions. Headwinds include softening commercial property rates and AI disruption in front-end retail distribution.
- Pricing Dynamics: Commissions are typically a percentage of the insurance premium; therefore, revenue benefits directly from inflation and rising insurance rates without corresponding cost increases.
- Seasonality: Q1 and Q2 are typically stronger due to the timing of commercial policy renewals and employee benefits enrolments.
Specialty Distribution Segment
- Revenue Driver Formula: Prior Year Specialty Revenue x (1 + Organic Growth Rate) + Acquired Specialty Revenue.
- Historical Growth Rate: 10-15% total growth, with 4-7% organic growth.
- Key Growth Levers and Headwinds: Driven by excess and surplus (E&S) lines growth, carrier capacity, and the expansion of delegated underwriting authority.
- Pricing Dynamics: Highly sensitive to carrier capacity and catastrophe (CAT) property rates.
- Seasonality: Relatively balanced, though hurricane season preparations can drive Q2/Q3 placement volumes.
Profit-Sharing Contingent Commissions
- Revenue Driver Formula: Eligible Placed Premiums x Carrier Profitability Metric x Contractual Tier Rate.
- Historical Growth Rate: Highly variable; typically represents 3-5% of total revenues.
- Key Growth Levers and Headwinds: Depends on the loss ratios of the underlying insurance placed. Light catastrophe years boost this revenue; heavy catastrophe years eliminate it.
- Revenue Recognition: Recognised when the contingencies are resolved and the amounts are determinable, typically in Q1 of the following year.
Cost Structure
Variable Costs / COGS
As an insurance broker, Brown & Brown does not report traditional COGS or gross margin. The primary direct cost of delivering services is employee compensation.
Operating Expenses
- Employee Compensation and Benefits: The largest expense, representing approximately 49.7% of total revenues in 2025. This includes salaries, bonuses, and commissions paid to producers. It scales linearly with revenue but offers slight operating leverage during hard insurance markets.
- Other Operating Expenses: Represents 12-15% of revenue. Includes IT, travel, marketing, and office expenses.
- Amortisation of Intangible Assets: Significant due to the company's serial acquisition strategy. Typically runs at 5-7% of revenue.
- Stock-Based Compensation: Non-cash expense that impacts GAAP margins but is added back for adjusted metrics.
Margin Profile
- EBITDAC Margin (Adjusted): 34-36% (reported 35.9% for FY2025). EBITDAC is Earnings Before Interest, Taxes, Depreciation, Amortisation, and Change in estimated acquisition earn-out payables.
- Income Before Income Taxes Margin: 20-24% (reported 23.2% for FY2025).
- Margin Trend: Expanding historically due to operating leverage and higher interest income on fiduciary funds, though occasionally compressed temporarily by lower-margin acquisitions (like Accession) before integration synergies are realised.
Balance Sheet Structure
- Total Assets: Approximately $15-18 billion following the Accession acquisition.
- Goodwill & Intangibles: Represents the vast majority of total assets (typically 60-70%), reflecting decades of serial M&A and the recent Accession deal.
- Fiduciary Assets and Liabilities: The company collects premiums from clients and holds them before remitting them to carriers. These are recorded as fiduciary assets (cash) and fiduciary liabilities (premiums payable). They match almost exactly and do not represent corporate cash.
- Working Capital Profile:
- Days Sales Outstanding (DSO): 45-55 days.
- Days Payable Outstanding (DPO): 60-70 days (excluding fiduciary payables).
- Net Working Capital: Typically negative when including fiduciary liabilities, providing a float advantage. The company earns interest on fiduciary funds before remitting them.
- PP&E: Minimal (1-2% of assets), consisting mostly of leasehold improvements and IT equipment.
Capital Expenditure & Investment
- Capex as % of Revenue: Extremely low, typically 1.0-1.5% of revenue.
- Maintenance vs. Growth: Almost entirely maintenance and IT infrastructure upgrades.
- M&A Pattern: Highly acquisitive. The company completed 43 acquisitions in 2025 alone, adding $1.8 billion in annual revenues. The strategy blends continuous bolt-on acquisitions with occasional transformational deals (e.g., Accession).
- Acquisition Multiples: Typically pays 10-14x EBITDA for bolt-ons, potentially higher for platform assets.
Debt & Capital Structure
- Total Debt: Increased significantly in 2025 to fund the Accession deal. Issued $4.2 billion in senior notes.
- Debt/EBITDA Ratio: Historically managed around 2.0x to 2.5x, but temporarily elevated closer to 3.0x-3.5x following the Accession acquisition.
- Credit Rating: BBB- (S&P), maintaining investment-grade status to ensure low cost of capital.
- Key Debt Instruments: Senior unsecured notes with staggered maturities and a revolving credit facility for working capital and bolt-on M&A.
- Interest Rate Profile: Mostly fixed-rate senior notes. Average debt coupon for the 2025 issuance was approximately 5.4%.
- Dividend Policy: Dividend Aristocrat with 32 consecutive years of increases. Payout ratio is conservative, typically in the low-to-mid teens (approx. 15%), yielding around 1.0%.
Cash Flow Characteristics
- Operating Cash Flow Conversion: Extremely strong. OCF is typically 120-140% of Net Income (reported nearly $1.5 billion OCF in 2025 on $1.1 billion net income).
- Free Cash Flow Margin: 20-25% of revenue, driven by asset-light operations and low capex.
- Major Non-Cash Items: Amortisation of intangible assets (massive due to M&A), depreciation, and stock-based compensation.
- Working Capital Impact: Fiduciary float can cause seasonal swings in operating cash flow, but underlying corporate working capital is relatively stable.
Sheet Structure
- Assumptions: Hardcoded drivers for organic growth, M&A spend, margins, and capital returns.
- Summary: Dashboard of key metrics (Total Revenue, Organic Growth, EBITDAC, Adjusted EPS).
- Revenue Build: Segmented build for Retail and Specialty Distribution, splitting organic growth from acquired growth.
- Income Statement: GAAP P&L down to Net Income, plus a reconciliation to Adjusted EBITDAC.
- Balance Sheet: Assets and liabilities, explicitly separating corporate cash from fiduciary cash.
- Cash Flow Statement: Indirect method, highlighting the add-back of amortisation and changes in fiduciary liabilities.
- Debt Schedule: Tranches of senior notes, revolver balance, and interest expense calculation.
- M&A Schedule: Roll-forward of acquired revenue, purchase price multiples, goodwill creation, and integration costs.
- DCF Valuation: Unlevered free cash flow build, WACC calculation, and terminal value.
Key Financial Relationships
- Retail Revenue = `Prior Year Retail Revenue * (1 + Retail Organic Growth) + Acquired Retail Revenue`
- Specialty Distribution Revenue = `Prior Year Specialty Revenue * (1 + Specialty Organic Growth) + Acquired Specialty Revenue`
- Total Core Commissions and Fees = `Retail Revenue + Specialty Distribution Revenue`
- Total Revenues = `Total Core Commissions and Fees + Profit-Sharing Contingent Commissions + Investment Income`
- Employee Compensation = `Total Revenues * Employee Comp Margin (approx. 49.7%)`
- EBITDAC = `Total Revenues - Employee Compensation - Other Operating Expenses`
- Adjusted EBITDAC Margin = `EBITDAC / Total Revenues`
- Amortisation Expense = `Prior Year Intangibles * Blended Amortisation Rate + (New M&A Spend * % Allocated to Definite-Lived Intangibles / Useful Life)`
- Interest Expense = `Average Debt Balance * Weighted Average Interest Rate`
- Fiduciary Interest Income = `Average Fiduciary Cash Balance * Average Yield on Fiduciary Funds`
- Adjusted Net Income = `GAAP Net Income + Amortisation (Net of Tax) + Change in Earn-Out Payables + Acquisition Integration Costs`
Cross-Sheet Dependencies
- The M&A Schedule is the critical engine of this model. It feeds Acquired Revenue into the Revenue Build, Goodwill and Intangibles into the Balance Sheet, Amortisation into the Income Statement, and Cash Paid for Acquisitions into the Cash Flow Statement.
- The Debt Schedule calculates interest expense, which feeds the Income Statement. The resulting Net Income feeds the Cash Flow Statement, which determines if the Revolver needs to be drawn on the Debt Schedule (Circularity risk here; requires a circuit breaker toggle).
- Fiduciary Cash on the Balance Sheet drives Investment Income on the Income Statement.
Sign Convention
- Revenues and Assets: Positive.
- Expenses and Liabilities: Positive in their specific build schedules, but subtracted (negative) when aggregating to profit lines or equity.
- Cash Flow: Inflows are positive, outflows (including capex, dividends, and M&A spend) are negative.
Things Most Likely to Go Wrong
- Fiduciary Funds Confusion: Treating fiduciary cash as corporate cash will massively overstate the company's liquidity and enterprise value. The model must strictly separate them.
- Organic vs. Acquired Revenue: Failing to separate organic growth from M&A growth will result in double-counting if the model also forecasts future M&A spend.
- EBITDA vs. EBITDAC: The company uses EBITDAC (adding back changes in earn-out payables). Using standard EBITDA will fail to match management's guidance and historical margins.
- Segment Restructuring: The company merged Programs and Wholesale into Specialty Distribution in 2025. Historical data prior to Q3 2025 must be pro-forma adjusted to match the new two-segment structure.
- Amortisation Distortion: Because of heavy M&A, GAAP Net Income is heavily depressed by amortisation. Valuation multiples must be based on Adjusted EPS or Cash EPS, not GAAP EPS.
- Interest Income Volatility: Fiduciary interest income spiked in recent years due to higher interest rates. If rates fall, this high-margin revenue stream will compress, impacting EBITDAC margins.
- Share Count Dilution: The 2025 Accession deal included $4.3 billion in equity issuance. The model must use the updated, significantly higher share count for per-share metrics.
- Earn-Out Liabilities: M&A deals often include earn-outs. Changes in the fair value of these liabilities hit the P&L and must be stripped out for core operating analysis.
Validation Checks
- EBITDAC Margin: Should remain in the 34.0% to 37.0% range. Flag if it drops below 33% or exceeds 38%.
- Employee Compensation Ratio: Must hover between 48.0% and 51.0% of total revenues.
- Organic Growth: Should not exceed 8% on a consolidated basis without a specific hard-market assumption flag.
- Cash Conversion: Operating Cash Flow / GAAP Net Income must be > 1.1x due to heavy non-cash amortisation.
- Balance Sheet Check: Total Assets must exactly equal Total Liabilities + Shareholders' Equity.
- Fiduciary Match: Fiduciary Assets should roughly equal Fiduciary Liabilities (within a 5% variance for timing differences).
- Debt/EBITDA: Should trend down from the post-Accession peak of ~3.0x towards the historical 2.0x-2.5x target.
- Dividend Payout Ratio: Should remain below 20% of Adjusted Net Income.
Key Assumptions (Default Values)
| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| Retail Organic Growth | 4.0 | % | Historical average; assumes normalising commercial insurance rates. |
| Specialty Dist. Organic Growth | 5.5 | % | Slightly higher than retail, driven by E&S market expansion. |
| Annual M&A Spend (Post-Accession) | 500 | $M | Normalised run-rate for bolt-on acquisitions excluding mega-deals. |
| Acquired Revenue Multiple | 3.5 | x | Typical revenue multiple paid for insurance brokerage bolt-ons. |
| Employee Comp % of Revenue | 49.7 | % | Actual reported figure for FY2025. |
| Other Operating Expenses % | 14.0 | % | Historical average to maintain ~36% EBITDAC margin. |
| EBITDAC Margin Target | 35.9 | % | Actual reported adjusted margin for FY2025. |
| Effective Tax Rate | 23.5 | % | Blended US federal and state statutory rates. |
| Fiduciary Funds Yield | 4.0 | % | Assumes moderate normalisation of short-term interest rates. |
| Capex % of Revenue | 1.2 | % | Asset-light business model maintenance requirement. |
| Weighted Average Interest Rate | 5.4 | % | Based on the 2025 senior notes issuance. |
| Dividend Growth Rate | 10.0 | % | Historical growth rate for this Dividend Aristocrat. |
| WACC | 8.0 | % | Reflects BBB- credit rating and stable, cash-generative beta. |
| Terminal Growth Rate | 2.5 | % | Aligns with long-term GDP and inflation expectations. |
Data Sources & Benchmarks
- SEC Filings: Brown & Brown Investor Relations page (investor.bbinsurance.com) or SEC EDGAR for the FY2025 10-K and Q4 2025 earnings release.
- Key Peers: Marsh McLennan (MMC), Aon (AON), Arthur J. Gallagher (AJG), Willis Towers Watson (WTW), Ryan Specialty (RYAN).
- Industry Data: Council of Insurance Agents & Brokers (CIAB) quarterly commercial property/casualty market index for premium rate benchmarking.
- Consensus Estimates: FactSet or Bloomberg for forward EPS and revenue estimates to validate model outputs.
Sources
- Brown & Brown Q4 and Full Year 2025 Earnings Release (January 26, 2026)
- Brown & Brown FY2025 10-K Summary
- Brown & Brown Q2 2025 Earnings Call Transcript and Accession Acquisition Details
- Brown & Brown 2026 Proxy Statement and Shareholder Return Metrics
- Seeking Alpha: Brown & Brown M&A Fuels Continued Growth (March 26, 2026)
- Trefis: Brown & Brown Market Trends and Organic Growth Analysis
- Investing.com: Brown & Brown Q1 2025 Earnings Transcript
Do more with the Brown & Brown model
Frequently asked
What is Brown & Brown's primary business model?+
Brown & Brown, Inc. (BRO) operates as a leading global insurance brokerage firm, providing risk management solutions to individuals and businesses. The company acts as an intermediary between clients and insurance carriers, earning commissions and fees for placing various types of insurance without carrying underwriting risk.
How does Brown & Brown generate its revenue?+
Brown & Brown generates revenue primarily through commissions and fees earned by placing property, casualty, and employee benefits insurance. Its business segments, Retail and Specialty Distribution, contribute to this revenue stream by serving diverse client needs across various geographies.
What is Brown & Brown's typical capital expenditure as a percentage of revenue?+
Brown & Brown's capital expenditure is notably low, typically ranging from 1.0-1.5% of its revenue. This minimal spending is almost entirely dedicated to maintenance and upgrades in IT infrastructure rather than growth-oriented investments.
How does M&A activity impact Brown & Brown's growth strategy?+
M&A is a core component of Brown & Brown's growth strategy, with the company being highly acquisitive, completing 43 acquisitions in 2025 alone. This strategy involves both continuous bolt-on acquisitions and occasional transformational deals to expand its revenue base and market presence.
Why do goodwill and intangibles represent a large portion of Brown & Brown's total assets?+
Goodwill and intangibles constitute the vast majority, typically 60-70%, of Brown & Brown's total assets. This reflects decades of serial M&A activity and significant recent deals like the Accession acquisition, which are central to the company's growth.
What is the purpose of the downloadable financial model for Brown & Brown (BRO)?+
The downloadable financial model for Brown & Brown provides a comprehensive equity valuation and M&A capacity analysis. It enables an equity research analyst to forecast organic growth, evaluate the margin accretion of recent acquisitions, and determine the intrinsic value of the firm's shares.
Have more financial modelling questions? Contact us
Created by ex-finance professionals
Hey, I’m Alex and I created Finamodel.
Over my years in the finance industry I kept building the same models over and over again. Same structure, same assumptions, different logo. So I started building frameworks to turn them into clean, reusable templates.
Every model here is one I’d actually use for a client, and I personally vet each one before it goes up.
I’m not an expert in every industry, but I’ve built enough models to know what belongs in one. And when something is completely foreign to me, I reach out to my network for experts to work on our models with us.
Having a template library on hand cuts a first build from hours to minutes.
Need help finding your model? You’ll find me in the Finamodel app!
Other Insurance Company Financial Models
Browse another company in the same sector.
Arch Capital Group
Arch Capital Group is a Bermuda-based global provider of specialty property and casualty insurance, reinsurance, and mortgage insurance, dynamically allocating capital across underwriting opportunities.
Aflac
Aflac Incorporated is a leading provider of supplemental health and life insurance products, designed to pay cash benefits directly to policyholders for costs not covered by primary health insurance.
American International Group
American International Group (AIG) is a leading global insurance organisation providing property casualty insurance solutions to businesses and individuals in over 200 countries and jurisdictions.
Assurant
Assurant is a global provider of risk management solutions, protecting consumer purchases such as mobile devices, vehicles, and homes through B2B2C partnerships with brands, telecom providers, and financial institutions.
Arthur J. Gallagher & Co.
Arthur J.
Allstate
The Allstate Corporation is one of the largest publicly held personal lines property and casualty insurers in the United States.
Aon
Aon plc is a leading global professional services firm providing a broad range of risk, retirement, and health solutions.
Berkshire Hathaway
Berkshire Hathaway is a multinational conglomerate holding company overseen by Warren Buffett.
Explore more Financial Services financial model templates.
