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Brown & Brown Unit Acquires CoverHound, Ramps Up Operations

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Brown & Brown, Inc. (BRO - Free Report) announced that its subsidiary has bought CoverHound and its wholly owned subsidiary, CyberPolicy.

CoverHound is a leading digital insurance marketplace for individuals and small businesses. It boasts one of the original InsurTechs or technology-led insurers. Thus, adding CoverHound will help the acquirer expand into the digital insurance marketplace.

Brown & Brown looks to combine its expertise and market strength with CoverHound to help it efficiently cater to its customers and serve them better.

Brown & Brown along with its subsidiaries continuously make strategic acquisitions to expand international presence, add capabilities and boost portfolio. These, in turn, help Brown & Brown ramp up its commissions and fees, which, in turn, drive revenues.

The recent acquisition is the company’s fourth buyout in the ongoing quarter. During the nine months ended Jun 30, 2020, it closed 16 transactions with estimated annual revenues of $116 million.

The company remains well positioned with its capital structure and has been able to access sufficient capital via its $1.1 billion available cash to fund growth. Moreover, consistent operational results have helped Brown & Brown generate solid cash flows to be deployed in strategic initiatives.

Shares of Brown & Brown have rallied 16.3% year to date against its industry’s decrease of 2.5%. We expect this Zacks Rank #2 (Buy) insurance broker’s sustained operational performance, higher commissions and fees and a sturdy capital position to help it retain the momentum.

There have been a number of significant acquisitions in the insurance domain of late. Recently, Arthur J. Gallagher & Co. (AJG - Free Report) acquired Optimum Talent Inc. to extend Gallagher’s senior management relationships throughout Canada, which, in turn, will facilitate capabilities discussions and consulting engagements. Arch Capital Group Ltd. (ACGL - Free Report) agreed to acquire Watford Holdings Ltd. (WTRE - Free Report) . Watford Holdings is considered a variable interest entity and Arch Capital believes that it is the primary beneficiary of Watford Holdings.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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