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Brown & Brown's Subsidiary Buys Assets of Amity Insurance
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Brown & Brown, Inc.’s (BRO - Free Report) subsidiary Brown & Brown of Massachusetts, Inc. has acquired considerably all Amity Insurance Agency’s assets.
Formed in 1978, North Quincy, MA-based Amity Insurance Agency is an insurance company offering a broad range of insurance products and services, and specializing in risk management solutions for customers in the legal, parking, transportation, and construction industries.
The firm also provides a variety of personal lines insurance products and services to individuals across New England.
Amity has grown from a local small commercial and personal lines agency to a national brokerage firm with expertise in and knowledge of the insurance industry. Recently, it was recognized as one of the 20 fastest growing privately-held companies by the Boston Business Journal. This success has been linked to Amity’s creative and cost-effective techniques in risk management and Employee Benefits.
Rationale Behind the Deal
The acquisition of Amity Insurance will enable the acquirer to add more high-quality leaders and teammates to its growing operations in New England. Brown & Brown will leverage Amity’s competence in combining creativity and risk management needs of its customers.
As far as Amity Insurance is concerned, this transaction will expedite its growth and capability to serve its current and future clients.
The combined entity will continue to provide personal customer service and expertise and offer its commercial and individual clients with wider spectrum of property, casualty and professional liability insurance protection, along with robust employee benefits products and services.
Inorganic Growth Story
Brown & Brown pursues frequent buyouts for boosting top-line growth. Its revenues have grown as a result of its continued focus on net new business growth and acquisitions. Notably, this latest transaction marks the fourth buyout by the insurance broker in the third quarter of 2020. In the first six months of 2020, the insurer closed 10 transactions with estimated annual revenues of $85 million.
Consistent investments along with solid earnings will aid this Zacks Rank #2 (Buy) insurance broker in its inorganic efforts. These strategic acquisitions drive Brown & Brown’s commission and fees, which, in turn, boost revenue growth.
From 1993 through the second quarter of 2020, the company acquired 546 insurance intermediary operations. It continues to make investments to drive growth and margins.
Other Acquisitions in the Same Space
There have been a host of acquisitions in the insurance brokerage space of late, given the significant capital available. Recently, Arthur J. Gallagher & Co. (AJG - Free Report) closed the buyout of Edmonton, Alberta-based Insight Insurance & Risk Management Ltd. Marsh & McLennan Companies’ (MMC - Free Report) unit, Oliver Wyman acquired a minority stake in Corridor Platforms, and Aon plc (AON - Free Report) completed the acquisition of 100% share capital of Farmington Administrative Services LLC and certain assets of other Farmington companies.
Price Performance
Shares of Brown & Brown have risen 26.4% in the past year, outperforming the industry’s increase of 5.2%. The company’s efforts to ramp up growth and capital position should continue to drive shares higher.
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Brown & Brown's Subsidiary Buys Assets of Amity Insurance
Brown & Brown, Inc.’s (BRO - Free Report) subsidiary Brown & Brown of Massachusetts, Inc. has acquired considerably all Amity Insurance Agency’s assets.
Formed in 1978, North Quincy, MA-based Amity Insurance Agency is an insurance company offering a broad range of insurance products and services, and specializing in risk management solutions for customers in the legal, parking, transportation, and construction industries.
The firm also provides a variety of personal lines insurance products and services to individuals across New England.
Amity has grown from a local small commercial and personal lines agency to a national brokerage firm with expertise in and knowledge of the insurance industry. Recently, it was recognized as one of the 20 fastest growing privately-held companies by the Boston Business Journal. This success has been linked to Amity’s creative and cost-effective techniques in risk management and Employee Benefits.
Rationale Behind the Deal
The acquisition of Amity Insurance will enable the acquirer to add more high-quality leaders and teammates to its growing operations in New England. Brown & Brown will leverage Amity’s competence in combining creativity and risk management needs of its customers.
As far as Amity Insurance is concerned, this transaction will expedite its growth and capability to serve its current and future clients.
The combined entity will continue to provide personal customer service and expertise and offer its commercial and individual clients with wider spectrum of property, casualty and professional liability insurance protection, along with robust employee benefits products and services.
Inorganic Growth Story
Brown & Brown pursues frequent buyouts for boosting top-line growth. Its revenues have grown as a result of its continued focus on net new business growth and acquisitions. Notably, this latest transaction marks the fourth buyout by the insurance broker in the third quarter of 2020. In the first six months of 2020, the insurer closed 10 transactions with estimated annual revenues of $85 million.
Consistent investments along with solid earnings will aid this Zacks Rank #2 (Buy) insurance broker in its inorganic efforts. These strategic acquisitions drive Brown & Brown’s commission and fees, which, in turn, boost revenue growth.
From 1993 through the second quarter of 2020, the company acquired 546 insurance intermediary operations. It continues to make investments to drive growth and margins.
Other Acquisitions in the Same Space
There have been a host of acquisitions in the insurance brokerage space of late, given the significant capital available. Recently, Arthur J. Gallagher & Co. (AJG - Free Report) closed the buyout of Edmonton, Alberta-based Insight Insurance & Risk Management Ltd. Marsh & McLennan Companies’ (MMC - Free Report) unit, Oliver Wyman acquired a minority stake in Corridor Platforms, and Aon plc (AON - Free Report) completed the acquisition of 100% share capital of Farmington Administrative Services LLC and certain assets of other Farmington companies.
Price Performance
Shares of Brown & Brown have risen 26.4% in the past year, outperforming the industry’s increase of 5.2%. The company’s efforts to ramp up growth and capital position should continue to drive shares higher.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Looking for Stocks with Skyrocketing Upside?
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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