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Brown & Brown (BRO) Ramps Up Legal Professional Liability

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Brown & Brown of Connecticut, Inc., a subsidiary of Brown & Brown, Inc. (BRO - Free Report) , recently acquired the assets of Kronholm Insurance Services, Inc. Terms of the deal remained undisclosed.

Kronholm Insurance provides lawyer professional liability solutions, court bonds, committee of sale coverage, long-term care and related commercial and personal lines products. The company, which has annualized revenues of $2.5 million, has been serving the legal community in Connecticut and Rhode Island for more than three decades.

This acquisition will help Brown & Brown gain from Kronholm Insurance’s expertise in the legal professional liability insurance. On the other hand, Kronholm Insurance stands to benefit from the acquirer’s expanded product offering.

Brown & Brown remains focused on enriching its portfolio by adding companies that complement its operations. This marks fifth acquisition by Brown and Brown this year and the first one in the third quarter. In June, Brown and Brown acquired Morstan General Agency, Inc. The insurance broker closed 10 acquisitions with revenues of $159.5 million in 2015. The company’s strategic buyouts are well supported by its strong liquidity position.

The insurance broker did not witness any earnings momentum over the last 30 days. Nonetheless, we expect the latest buyout as well as recent initiatives to raise optimism and induce analysts to raise their estimates, thereby resulting in a possible rank upgrade. Brown & Brown presently carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Acquisitions are a well-accepted strategy among insurers for ramping up growth. This month, First American Financial Corporation (FAF - Free Report) entered into an agreement to acquire RedVision Systems, Inc. The buyout will enable the property and casualty insurer to further expand its industry leading position in title and property data. Last month, Arch Capital Group Ltd. (ACGL - Free Report) announced its decision to acquire United Guaranty Corporation and AIG United Guaranty Insurance Limited from the parent company, American International Group, Inc. (AIG - Free Report) , for $3.4 billion. The buyout will enable the acquirer to expand its private mortgage insurance business.

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