The speaker welcomes listeners to the conference call and reminds them that the call is being recorded. They mention that information discussed may be forward-looking and subject to risks and uncertainties. The speaker also mentions that the Company's financial results for the first quarter may differ from preliminary numbers and that there may be other factors affecting the Company's business and prospects. They state that they have no obligation to update or revise any forward-looking statements.

The company's earnings call discussed their strong performance in the first quarter, with revenue and earnings growth, and provided updates on the insurance market and M&A landscape. The company completed six acquisitions and experienced similar growth in markets as in the previous quarter. However, there is a shortage of workers and inflation is driving changes in insurance pricing.

The pricing for employee benefits has remained consistent, with medical and pharmacy costs increasing. Demand for EV consulting businesses is strong due to these pressures. Rates for admitted P&C markets have increased for most lines, except for workers' compensation. There has been an increase in pricing for excess casualty lines and upward pressure for primary limits. Professional liability rates have slightly improved, but are still flat to down. CAT property rates have moderated, with some accounts seeing decreases and others seeing slight increases. This may have a slight impact on offices in CAT areas, but their new business activity remains strong. In a steady state economy, organic growth is generally driven by exposure units and rate, with a slightly higher rate impact in CAT prone areas.

Powell discusses the company's diversified nature in terms of geography, lines of coverage, and customer size and how this has contributed to their strong financial performance. He also mentions their activity in the M&A marketplace and their focus on building relationships with lending companies. He then transitions to discussing the performance of their three segments: Retail, Program, and Wholesale Brokerage. Retail had a strong quarter with organic growth and a focus on leveraging their capabilities to create unique solutions for customers. Program had an outstanding quarter despite headwinds, and Wholesale Brokerage also had strong growth driven by net new business and rate increases. Andy will now provide more details on the financial results.

In this paragraph, the speaker discusses the financial results for the company, focusing on their adjusted measures such as EBITDAC and EBITDAC margin. They mention the growth in total revenues, income before income taxes, and EBITDAC, as well as the increase in dividends per share. They also discuss the performance of their Retail and Programs segments, with both showing strong growth in total revenues and organic growth. The difference between total revenues and organic growth is attributed to acquisition activity and increased contingent commissions.

The company saw growth in contingent commissions and an increase in EBITDAC margin due to leveraging expenses and higher commissions. The Wholesale Brokerage segment also delivered strong results. The company expects strong cash generation and has a strong capital position. The CEO expects economic growth to continue but moderate towards more normal levels.

The paragraph discusses the expectations for business growth, hiring, and investment due to persistent inflation and a tight labor market. It also mentions the predicted rate changes for admitted and E&S markets, as well as the potential for continued rate pressure for CAT property. The company also discusses their strong position for M&A and their disciplined approach to acquiring high-quality organizations. The focus on National Programs is expected to lead to sustainable margin improvement in the coming quarters.

The speaker discusses the potential for ups and downs in orders, using the example of budgeting for storms in the third quarter. They also mention the expected increase in margin from the disposal of some services businesses. The speaker then addresses the current state of the insurance market, noting that buyers are experiencing "pricing fatigue" and that increased demand for coverage may not offset pricing declines. They mention that some clients may be frustrated with the market and may not choose to buy more limits.

The speaker discusses three potential benefits of the current market conditions: getting better terms and conditions, continued downward pricing pressure, and the ability to write business in both a rising and falling market. They also mention that they do not disclose the breakdown of their business by line, but note that they write a significant amount of CAT property in all states and that their package business focuses on workers' compensation, auto, and general liability.

The speaker is providing information on their book of business and how it is divided into small, medium, upper middle, and large accounts. They mention that some large accounts may not be as affected by market changes due to being on fees. The company is focused on offering competitive programs for customers, which may put downward pressure on their property book. However, this is offset by pressure in other areas such as casualty and professional liability rates going down. The speaker also mentions the importance of diversification in their business to balance out potential changes in different areas. In response to a question, the speaker quantifies a one-time benefit of $7 million from contingent commissions recorded in the first quarter. This benefit will not be seen in the first quarter of next year.

The speaker asks a question about the company's contingents and if there was any seasonality or change in their view for the year. The CEO responds that there was no pull forward and that the estimates for contingents are based on the policies placed and their profitability. He also mentions that the first quarter looks promising and that storm season may affect the calculations. The speaker then switches to asking about cash flow as a percentage of revenues, and the CEO clarifies that the 22% to 24% guide is still in place, but a higher figure of 25% may be considered normal.

During a recent earnings call, Powell Brown, the CEO of a company, discussed the factors that have caused their cash flow to decrease over the past 1.5 to 2 years. He stated that the business has a conversion ratio of 24% to 26% over the medium to long term, but it has been impacted by higher interest expenses. However, they expect to return to their normal rate next year. The company's benefits business has been growing organically and they are able to compete on accounts of any size.

The speaker is pleased with the performance of their business and notes that there continues to be growth in the wholesale open brokerage market. They mention the opportunity for new business as rates fluctuate, but also acknowledge the potential for losing business in this environment. The next question is about the strong organic growth in the program segment, and the speaker explains that this is due to lapping some one-off revenue from the previous year. They do not provide specific details on what is driving this growth, but suggest it may continue throughout the year.

The speaker discusses the strong performance of the company's programs business and mentions that there are good growth opportunities in this area. However, there is increasing competition in certain areas such as CAT property and earthquake exposure. The company remains optimistic about the programs business and notes that there has been a shift in perception of MGAs since the company's acquisition of Arrowhead 12 years ago.

The company's lender-placed business has performed well and written a lot of new business. The guidance for margins for the full year is still up slightly, but there may be potential impact from storm claim activity in the third or fourth quarter. The first quarter was very good. There was a question about the impact of the sale of the service segment on program margins, but no specific number was given.

The company's Retail segment margin has contracted slightly, but the company is not concerned as they are focused on long-term growth and performance. They do not believe that one quarter's performance is indicative of a trend. The company is pleased with their organic growth and new business in the Retail segment over the past few years. A question was asked about the potential impact of standard markets on the growth of the E&S market, but the company does not have enough information to make a judgement on this.

In this paragraph, the speaker discusses the state of California and the potential impact of a large carrier downgrading their policies. They mention the possibility of these policies going into the fair plan, which is not ideal for the state. The speaker also mentions the decrease in policies in the state of Florida, but notes that this may be misleading due to depopulation companies taking on these policies. They caution against making judgments based on early indications and mention that it may take time for legislative changes to have an effect on capacity.

The speaker discusses how certain carriers are providing larger limits for properties in Florida, which is good for clients. However, not all properties are experiencing downward pressure in terms of pricing. The growth in contingent commissions and national programs is due to a combination of improved underwriting performance and low storm activity.

The speaker discusses the impact of last year's lower storm activity on incremental growth this year. They also mention the difference in trends between Programs and Retail divisions, and how Programs may see more volatility due to contingent commissions. The speaker then addresses the interest rate environment and how it may affect M&A activity. They expect the environment to remain competitive, but some firms may be less active due to their debt load.

The speaker cautions against assuming that the higher interest rate environment will significantly impact the level of competition in the market. They also mention a decrease in contingents in the Retail business and expect this trend to continue. The speaker then addresses a question about M&A activity in the industry, stating that it is not linear and depends on when and why people decide to sell. They emphasize the importance of cultural fit in these transactions.

The speaker states that they often do transactions with certain companies, but they are not in a rush to do so. They have plenty of opportunities, but they must fit culturally and make financial sense. They are known for paying with cash, sticking to their word, and making decisions quickly. They believe there will be a lot of consolidation in the industry in the next few years and they will be ready to participate. In response to a question, the speaker mentions that they cannot share specific numbers but they are seeing positive growth trends outside of the US due to recent acquisitions.

The speaker, Andy Watts, explains that the company's overseas businesses are performing similarly to their domestic ones, with strong growth in new business and policy retention. However, the company takes their responsibility of underwriting for their carry partners seriously and does not write every risk that comes their way. Overall, the company is pleased with the growth and mix of their programs.

The speaker discusses the company's approach to underwriting and growth, emphasizing the importance of disciplined underwriting on both ends of the spectrum. They also mention the potential for upward pressure on liability rates in the near to intermediate term due to adverse development in recent accident years.

The speaker believes that the insurance industry is not always rational or logical when it comes to risk-taking. They predict that there will be upward pressure on excess and general liability insurance in the future, possibly in the next couple of years. In the dealer services segment, inventory levels have recovered but prices for used cars are coming down. The company is confident about their outlook and does not anticipate any major challenges. The conference call has ended and the CEO thanks everyone for participating.

The speaker discusses three main points: the success of new business opportunities, the potential for opportunity in the face of change, and the company's approach to acquisitions. They believe there will be many opportunities in the coming years, particularly in the distribution industry. They feel confident about the company's performance and look forward to the future. The call concludes with a goodbye and disconnection.

This summary was generated with AI and may contain some inaccuracies.