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What changed in Brown & Brown's 10-K — 2025 vs 2026

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Paragraph-level year-over-year comparison of Brown & Brown's 2025 and 2026 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2026 report.

+400 added−337 removedSource: 10-K (2026-02-12) vs 10-K (2025-02-13)

Top changes in Brown & Brown's 2026 10-K

400 paragraphs added · 337 removed · 269 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

60 edited+18 added−24 removed22 unchanged
Biggest changeBetween July 2013 and October 2019, he served as president and chief operating officer of Arrowhead General Insurance Agency, Inc. (Arrowhead), one of our subsidiaries. Mr. Boyd joined Arrowhead in 1995 and has served in various roles, including as president of Arrowhead’s Commercial division and Arrowhead’s chief information officer. Julie L. Turpin. Ms.
Biggest changeBoyd became a senior vice president of the Company in May 2015 and from October 2019 until January 2021, served as our senior vice president of technology, innovation and digital strategy. Between July 2013 and October 2019, he served as president and chief operating officer of Arrowhead General Insurance Agency, Inc. (Arrowhead), one of our subsidiaries. Mr.
He has been involved with Arrowhead’s business development strategies, product expansion, acquisitions and the overall operations and infrastructure since joining the organization in 2003. Prior to that, he served as vice chairman of Aon Re. Mr. Walker’s insurance career began with the reinsurance intermediary E.W. Blanch Co., where he ultimately served as chairman and CEO of E.W. Blanch Holdings.
Walker has been involved with Arrowhead’s business development strategies, product expansion, acquisitions and the overall operations and infrastructure since joining the organization in 2003. Prior to that, he served as vice chairman of Aon Re. Mr. Walker’s insurance career began with the reinsurance intermediary E.W. Blanch Co., where he ultimately served as chairman and CEO of E.W. Blanch Holdings.
Professional liability programs also offer supplementary insurance-related products to include weddings, events, medical facilities and cyber liability. Personal Lines programs. Personal lines programs offer a variety of insurance products to personal lines consumers including homeowners and personal property policies; residential earthquake; private passenger automobile and motorcycle coverage, which is currently in run-off. Commercial Lines programs.
Professional liability programs also offer supplementary insurance-related products to include weddings, events, medical facilities and cyber liability. Personal Lines: Personal lines programs offer a variety of insurance products to personal lines consumers including homeowners and personal property policies; residential earthquake; private passenger automobile and motorcycle coverage, which is currently in run-off.
Public entity programs range from providing fully insured programs to establishing risk retention insurance pools, and excess and facultative specific coverages, including administration of various insurance trusts for cities, counties, municipalities, school boards, special taxing districts and quasi-governmental agencies. Specialty programs.
Public Entity: Public entity programs range from providing fully insured programs to establishing risk retention insurance pools, and excess and facultative specific coverages, including administration of various insurance trusts for cities, counties, municipalities, school boards, special taxing districts and quasi-governmental agencies.
Powell Brown, has served as a director since October 2007. 10 J. Powell Brown. Mr. Brown was named chief executive officer in July 2009. He has been our president since January 2007 and was appointed to be a director in October 2007. Prior to 2007, he served as one of our regional executive vice presidents since 2002. Mr.
Powell Brown, has served as a director since October 2007. J. Powell Brown. Mr. Brown was named chief executive officer in July 2009. He has been our president since January 2007 and was appointed to be a director in October 2007. Prior to 2007, he served as one of our regional executive vice presidents since 2002. Mr.
We make available free of charge on our website, at www.bbinsurance.com, our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act and the rules promulgated thereunder, as soon as reasonably practicable after electronically filing or furnishing such material to the SEC.
We make available free of charge on our website, at www.bbrown.com, our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act and the rules promulgated thereunder, as soon as reasonably practicable after electronically filing or furnishing such material to the SEC.
We offer program management expertise for insurance carrier partners across numerous lines of business, which can be grouped into five broad categories as detailed below: Professional programs. Professional liability and related package insurance products are tailored to the needs of professionals in the following areas: dentistry, legal, eyecare, insurance, financial, physicians and real estate title professionals.
We offer program management expertise for insurance carrier partners across numerous lines of business, which can be grouped into six broad categories as detailed below: Professional programs. Professional liability and related package insurance products are tailored to the needs of professionals in the following areas: dentistry, legal, eyecare, insurance, financial, physicians and real estate title professionals.
Requests for copies of any of these documents should be directed in writing to: Corporate Secretary, Brown & Brown, Inc., 300 North Beach Street, Daytona Beach, Florida 32114 or by telephone to (386)-252-9601. Information About Our Executive Officers Set forth below is certain information concerning our executive officers as of February 11, 2025.
Requests for copies of any of these documents should be directed in writing to: Corporate Secretary, Brown & Brown, Inc., 300 North Beach Street, Daytona Beach, Florida 32114 or by telephone to (386)-252-9601. Information About Our Executive Officers Set forth below is certain information concerning our executive officers as of February 11, 2026.
Brown is a member of the board of trustees of Stetson University, of which he is a past chairman, and the Florida Council of 100. Mr. Hyatt Brown’s sons, J. Powell Brown and P. Barrett Brown, are employed by us as president and chief executive officer, and as executive vice president and president – Retail segment, respectively. His son, J.
Brown is a member of the board of trustees of Stetson University, of which he is a past chairman, and the Florida Council of 100. Mr. Hyatt Brown’s sons, J. Powell Brown and P. Barrett Brown, are employed by us as president and chief executive officer, and as executive vice president, respectively. His son, J.
These teammates are available to listen impartially and support teammates while also 9 raising awareness regarding the importance of mental health and wellness. Mental Health Allies are not diagnosticians or emergency providers but conduits who may assist teammates in finding the appropriate resources in a time of need.
These teammates are available to listen impartially and support teammates, while also raising awareness regarding the importance of mental health and wellness. Mental Health Allies are not diagnosticians or emergency providers, but rather conduits who may assist teammates in finding the appropriate resources in a time of need.
While it is difficult to quantify the impact on our business from individuals or small businesses purchasing insurance over the internet, we believe this risk would generally be isolated to personal lines customers with single-line coverage, or small businesses that do not have a complex insurance program, which represent a small portion of our overall Retail or Programs segments.
While it is difficult to quantify the impact on our business from individuals or small businesses purchasing insurance over the internet, we believe this risk would generally be isolated to personal lines customers with single-line coverage, or small businesses that do not have a complex insurance program, which represent a small portion of our overall Retail and Specialty Distribution segments.
Specific industries and market niches are served by our commercial programs including automotive aftermarket, professional and amateur sports, special events and the entertainment industry; commercial transportation and trucking; forestry; manufactured housing; and workers’ compensation. The Arrowhead Core Commercial program which covered a broad segment of industries is currently in run-off. Public Entity programs.
Commercial Lines: Specific industries and market niches are served by our commercial programs including automotive aftermarket, professional and amateur sports, special events and the entertainment industry; commercial transportation and trucking; forestry; manufactured 6 housing; and workers’ compensation. The Arrowhead Core Commercial program which covered a broad segment of industries is currently in run-off.
He has also overseen certain aspects of “Brown & Brown University,” a training program offering technical and sales courses for new producers, office leaders, and other groups within the organization. He is the son of our chairman of the board, J. Hyatt Brown, and brother of our president and chief executive officer, J. Powell Brown. Stephen M. Boyd. Mr.
He has also overseen certain aspects of “Brown & Brown University,” a training program offering technical and sales courses for new producers, office leaders, and other groups within the organization. He is the son of our chairman of the board, J. Hyatt Brown, and brother of our president and chief executive officer, J. Powell Brown. 10 Stephen P. Hearn. Mr.
We endeavor to monitor the licensing status of our employees, but the possibility exists that we and/or our employees could be excluded or temporarily suspended from carrying on some or all of our activities in a particular jurisdiction in addition to being subjected to fines. Human Capital As of December 31, 2024, Brown & Brown employed 17,403 individuals worldwide.
We endeavor to monitor the licensing status of our employees, but the possibility exists that we and/or our employees could be excluded or temporarily suspended from carrying on some or all of our activities in a particular jurisdiction in addition to being subjected to fines. Human Capital As of December 31, 2025, Brown & Brown employed 22,888 individuals worldwide.
The majority of our employment relationships are at will and terminable by either party at any time; however, the confidentiality and non-solicitation covenants generally extend at least two years after employment ends. Apart from certain employees in Canada, none of our employees are subject to a collective bargaining agreement. We consider our employee relations to be strong.
The majority of our employment relationships are at will and terminable by either party at any time; however, the confidentiality and non-solicitation covenants generally extend at least two years after employment ends. Apart from certain employees in Canada, none of our employees are subject to a collective bargaining agreement.
Regulations and licensing laws vary by individual state and international location and are often complex. 7 The applicable licensing laws and regulations in all states and international jurisdictions are subject to amendment or reinterpretation by regulatory authorities, which in most cases have broad discretion as to the granting, revocation, suspension and renewal of licenses.
The applicable licensing laws and regulations in all states and international jurisdictions are subject to amendment or reinterpretation by regulatory authorities, which in most cases have broad discretion as to the granting, revocation, suspension and renewal of licenses.
As of December 31, 2024, our activities were conducted in 315 domestic locations in 44 states, and 201 international locations in Belgium, Bermuda, Canada, Cayman Islands, France, Germany, Hong Kong Special Administrative Region of the People's Republic of China (“Hong Kong”), Republic of Ireland, Italy, Malaysia, the Netherlands, Singapore, United Arab Emirates and the United Kingdom.
As of December 31, 2025, our activities were conducted in 468 domestic locations in 47 states, and 246 international locations in Belgium, Bermuda, Canada, Cayman Islands, France, Germany, Hong Kong Special Administrative Region of the People's Republic of China (“Hong Kong”), India, Italy, Malaysia, the Netherlands, Republic of Ireland, Singapore, United Arab Emirates and the United Kingdom.
In addition, our campus in Daytona Beach, Florida, was designed with teammates in mind. Open floorplans encourage regular movement and interaction among our teammates, promoting a productive, collaborative work environment. Offices and workstations are equipped with ergonomic furniture and sit-stand desks, intentionally selected to support teammates' physical health.
In addition, our campus in Daytona Beach, Florida, as well as many of our leased facilities have been designed with teammates in mind. Open floorplans encourage regular movement and interaction among our teammates, promoting a productive, collaborative work environment. Offices and workstations are equipped with ergonomic furniture and sit-stand desks, intentionally selected to support teammates' physical health.
During 2024, commissions and fees from our largest single Retail segment customer represented 0.7% of the Retail segment’s total commissions and fees. As of December 31, 2024, our Retail segment employed 10,962 employees. Our Retail segment has physical locations in 44 states plus Bermuda, Canada, Cayman Islands, the Netherlands, Republic of Ireland and the United Kingdom.
During 2025, commissions and fees from our largest single Retail segment customer represented 0.6% of the Retail segment’s total commissions and fees. As of December 31, 2025, our Retail segment employed 14,531 employees. Our Retail segment has physical locations in 44 states plus Bermuda, Canada, Cayman Islands, India, the Netherlands, Republic of Ireland and the United Kingdom.
Outside of the United States we have retail operations based in Bermuda, Canada, Cayman Islands, Republic of Ireland and the United Kingdom, managing general underwriter operations in Canada, France, Germany, Hong Kong, Italy, Malaysia, the Netherlands, United Arab Emirates and the United Kingdom; and wholesale brokerage operations based in Belgium, Hong Kong, Italy, Singapore and the United Kingdom.
Outside of the United States we have retail operations based in Bermuda, Canada, Cayman Islands, India, the Netherlands, Republic of Ireland and the United Kingdom, and Specialty Distribution operations in Belgium, Canada, France, Germany, Hong Kong, Italy, Malaysia, the Netherlands, Singapore, United Arab Emirates and the United Kingdom.
In 2021, we announced the creation of a Mental Health Allies group, which consists of teammate volunteers ready to serve as points of contact for our mental health resources and a support system for our teammates. Mental Health Allies complete mental health first aid training offered by the National Council for Behavioral Health.
We also have a Mental Health Allies group, which consists of a group of teammate volunteers that are ready to serve as points of contact for our mental health resources, as well as a support system for our teammates. Mental Health Allies complete mental health first aid training offered by the National Council for Behavioral Health.
Regulation, Licensing and Agency Contracts We and/or our designated employees must generally be licensed to act as agents, brokers, intermediaries or third-party administrators by regulatory authorities in the locations in which we conduct business.
Regulation, Licensing and Agency Contracts We and/or our designated employees must generally be licensed to act as agents, brokers, intermediaries or third-party administrators by regulatory authorities in the locations in which we conduct business. Regulations and licensing laws vary by individual state and international location and are often complex.
Teammate Health and Well-Being Our top priority is holistic well-being—physical, emotional, social and financial. We believe that healthy teammates provide better support to their families, communities and customers, which results in our continued success as a Company. We encourage teammates to stay active, maintain a healthy work-life balance, volunteer in their local communities and prioritize their mental and physical health.
Teammate Health and Well-Being Our top priority is holistic well-being—physical, emotional, social and financial. We believe that healthy teammates provide better support to their families, their communities and our customers, which results in our continued success as a Company.
The Retail segment provides a broad range of insurance products and services to commercial, public and quasi-public entities, and to professional and individual customers, as well as non-insurance warranty services and products through our F&I businesses.
The Retail segment provides a broad range of insurance products and services to commercial, public and quasi-public entities, and to professional and individual customers, as well as non-insurance warranty services and products through our automobile and recreational vehicle dealer services ("F&I") businesses. The Specialty Distribution segment consists of our programs, wholesale brokerage and specialty businesses.
He is the son of our chairman of the board, J. Hyatt Brown, and brother of our executive vice president and president – Retail segment, P. Barrett Brown. P. Barrett Brown. Mr. Brown was appointed as an executive vice president and the president of our Retail segment in January 2020.
He is the son of our chairman of the board, J. Hyatt Brown, and brother of our executive vice president, P. Barrett Brown. P. Barrett Brown. Mr. Brown has served as an executive vice president since January 2020 and served as the president of our Retail segment from January 2020 until October 2025.
Available Information We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and its rules and regulations. The Exchange Act requires us to file reports, proxy statements and other information with the SEC.
By prioritizing safety and health, we ensure a secure and productive workplace for all teammates. 9 Available Information We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and its rules and regulations. The Exchange Act requires us to file reports, proxy statements and other information with the SEC.
We now have 11 TRGs, which meet internally, empower one another, host events and are expected to make recommendations on how our Company can improve policies, impact recruitment and continue to be a strong part of the community.
In 2022, we began establishing Teammate Resource Groups (each, a "TRG") that are each founded around one identity. We now have 13 TRGs, which meet internally, empower one another, host events and are expected to make recommendations on how our Company can improve policies, impact recruitment and continue to be a strong part of the community.
All officers hold office for one-year terms or until their successors are elected and qualified. J. Hyatt Brown Chairman of the board 87 J. Powell Brown President, chief executive officer 57 P. Barrett Brown Executive vice president; president - Retail segment 52 Stephen M. Boyd Executive vice president; president - Wholesale Brokerage segment 51 Julie L.
All officers hold office for one-year terms or until their successors are elected and qualified. J. Hyatt Brown Chairman of the board 88 J. Powell Brown President, chief executive officer 58 P. Barrett Brown Executive vice president 53 Stephen P. Hearn Executive vice president; chief operating officer and president - Retail segment 59 Stephen M.
In connection with selling and marketing of insurance coverages, we provide a broad range of related services to our customers, such as risk management strategies, loss control surveys and analysis, consultation in connection with placing insurance coverages and claims processing. 6 Programs segment As of December 31, 2024, our Programs segment employed 3,986 employees.
In connection with selling and marketing of insurance coverages, we provide a broad range of related services to our customers, such as risk management strategies, loss control surveys and analysis, consultation in connection with placing insurance coverages and claims processing. Specialty Distribution segment The Specialty Distribution segment consists of our programs, wholesale brokerage and specialty businesses.
In 2024, 94% of teammates rated Brown & Brown a Great Place to Work®. Our meritocracy encourages teammates to rise based on their performance, supported by a culture that prioritizes health, well-being and inclusion. Diversity, Inclusion and Belonging We believe having a team that is diverse in thought, experience and skills results in teammate empowerment and high performance.
Our meritocracy encourages teammates to rise based on their performance, supported by a culture that prioritizes health, well-being and inclusion. Diversity, Inclusion and Belonging We believe having a team that is diverse in thought, experience and skills results in teammate empowerment and high performance. An empowered team helps to positively impact our customer service and community involvement.
Specialty programs include flood insurance, commercial difference-in-conditions (earthquake), all-risk commercial property, limited exposure captives, coastal property programs including wind, lender-placed solutions, sovereign native-American nations and parcel insurance. Wholesale Brokerage segment As of December 31, 2024, our Wholesale Brokerage segment employed 2,026 employees.
Specialty: These programs include flood insurance, commercial difference-in-conditions (earthquake), all-risk commercial property, limited exposure captives, coastal property programs including wind, lender-placed solutions, sovereign native-American nations and parcel insurance.
These documents are posted on our website at www.bbinsurance.com and may be accessed by selecting the “Investor Relations” link and then the “SEC Filings” link. The SEC maintains a website that contains reports, proxy statements and other information regarding issuers that file electronically with the SEC. These materials may be obtained electronically by accessing the SEC’s website at www.sec.gov.
The SEC maintains a website that contains reports, proxy statements and other information regarding issuers that file electronically with the SEC. These materials may be obtained electronically by accessing the SEC’s website at www.sec.gov.
WNFIC’s underwriting business consists of policies written pursuant to the National Flood Insurance Program (“NFIP”), the program administered by the Federal Emergency Management Agency (“FEMA”).
WNFIC’s underwriting business consists of policies written pursuant to the National Flood Insurance Program (“NFIP”), the program administered by the Federal Emergency Management Agency (“FEMA”) to which premiums and underwriting exposure are ceded, and excess flood policies which are fully reinsured in the private market.
An empowered team helps to positively impact our customer service and community involvement. As part of our strategy, we continue to evolve and augment our Diversity, Inclusion and Belonging ("DIB") advisory council, which is composed of numerous teammates and leaders with different backgrounds, work experiences and skill sets.
As part of our strategy, we continue to evolve and augment our Diversity, Inclusion and Belonging ("DIB") advisory council, which is composed of numerous teammates and leaders with different backgrounds, work experiences and skill sets. The mission of the DIB advisory council is assisting with recruiting and the development of inclusive relationships.
Turpin was appointed as an executive vice president in May 2021. She became our chief people officer and a senior vice president in March 2020. From August 2012 until March 2020, Ms.
Boyd joined Arrowhead in 1995 and has served in various roles, including as president of Arrowhead’s Commercial division and Arrowhead’s chief information officer. Julie L. Turpin. Ms. Turpin was appointed as an executive vice president in May 2021. She became our chief people officer and a senior vice president in March 2020. From August 2012 until March 2020, Ms.
The program allows teammates to find confidential care for their emotional and mental health, how, when, and where they need it.
Brown & Brown teammates have access to coaching, therapy, and work life services, through a teammate assistance program. The program allows teammates to find confidential care for their emotional and mental health, how, when, and where they need it.
Many of our other offices are also embracing open floorplans as they enter into new leases or refresh their office space. To assist those who have found themselves in financial hardships, we offer discounted services and products to teammates and the public through our Brown & Brown Savings Center.
Our offices are embracing open floorplans as we enter into new leases or refresh office space. To assist those who have found themselves in financial hardships, we provide discounted services and products through our Brown & Brown $avings Center to both teammates and the public. Workplace Safety Providing a safe environment is a core responsibility we take seriously.
The Programs segment specializes in the development, underwriting and management of insurance program business, often designed for niche, underserved markets and distributes these coverages to retail agencies (including Brown & Brown retail offices), as well as affinity groups, wholesale entities and sold direct to consumers. Our largest Programs segment customer represented approximately 12.7% of the segment's total commissions and fees.
Our programs businesses, operating under the name "Arrowhead Programs," specialize in the development, underwriting and management of insurance program business, often designed for niche, underserved markets and distribute these coverages to retail agencies (including Brown & Brown retail offices), as well as affinity groups, wholesale entities and direct to consumers.
Turpin Executive vice president, chief people officer 54 J. Scott Penny Executive vice president; chief acquisitions officer 58 Chris L. Walker Executive vice president; president - Programs segment 67 R. Andrew Watts Executive vice president; chief financial officer and treasurer 56 J. Hyatt Brown. Mr.
Boyd Executive vice president; president - Specialty Distribution segment 52 Julie L. Turpin Executive vice president; chief people officer 55 J. Scott Penny Executive vice president; chief acquisitions officer 59 Chris L. Walker Executive vice president; chairman - Specialty Distribution segment 68 R. Andrew Watts Executive vice president; chief financial officer and treasurer 57 J. Hyatt Brown. Mr.
ITEM 1. B usiness. General Brown & Brown is a diversified insurance agency, wholesale brokerage, insurance programs and service organization with origins dating from 1939 and is headquartered in Daytona Beach, Florida. The Company markets and sells insurance products and services, primarily in the property, casualty and employee benefits areas.
ITEM 1. B usiness. General Brown & Brown, Inc., a Florida corporation, and its subsidiaries (collectively, “Brown & Brown” or the “Company”) is a diversified insurance agency, wholesale brokerage, insurance programs and service organization that markets and sells insurance products and services, primarily in the property, casualty and employee benefits areas.
The following table summarizes (i) the commissions and fees generated by each of our reportable operating segments for 2024, 2023, and 2022 and (ii) the percentage of our total commissions and fees represented by each segment for each such period: (in millions, except percentages) 2024 % 2023 % 2022 % Retail segment $ 2,720 57.8 % $ 2,503 59.6 % $ 2,154 60.5 % Programs segment 1,375 29.2 % 1,160 27.6 % 957 26.9 % Wholesale Brokerage segment 610 13.0 % 539 12.8 % 453 12.7 % Other (2 ) (— )% (3 ) (— )% (1 ) (0.1 )% Total $ 4,703 100.0 % $ 4,199 100.0 % $ 3,563 100.0 % The majority of our operations are in the United States.
The following table summarizes (i) the commissions and fees generated by each of our reportable operating segments for 2025, 2024, and 2023 and (ii) the percentage of our total commissions and fees represented by each segment for each such period: (in millions, except percentages) 2025 % 2024 % 2023 % Retail segment $ 3,386 58.7 % $ 2,720 57.8 % $ 2,503 59.6 % Specialty distribution segment 2,379 41.3 % 1,985 42.2 % 1,699 40.5 % Other (2 ) (— )% — (— )% (3 ) (0.1 )% Total $ 5,763 100.0 % $ 4,705 100.0 % $ 4,199 100.0 % The majority of our operations are in the United States.
Our DIB advisory council evaluates our Company's current strengths and opportunities for development by initiating teammate surveys, listening sessions, group focus sessions and training modalities, including a course for all teammates focused on understanding and managing unconscious bias. In 2022, we began establishing Teammate Resource Groups ("TRGs"), each founded around one identity.
The DIB advisory council is overseen and guided by our chief people officer. 8 Our DIB advisory council evaluates our Company's current strengths and opportunities for development by initiating teammate surveys, listening sessions, group focus sessions and training modalities, including a course for all teammates focused on understanding and managing unconscious bias.
Retail segment The Retail segment provides a broad range of insurance products and services to commercial, public and quasi-public, professional and individual insured customers, and non-insurance services and products through our automobile dealer services F&I businesses.
See Note 15 to the Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional segment financial data relating to our business. 5 Retail segment The Retail segment provides a broad range of insurance products and services to commercial, public and quasi-public, professional and individual insured customers, and non-insurance services and products through our automobile dealer services F&I businesses.
Full-time teammates: Work 30+ hours weekly and are eligible for full benefits. Part-time teammates: Work under 30 hours weekly and may qualify for limited benefits based on hours worked. Seasonal/temporary teammates: Join for specific projects or interim needs, with limited durations. Teammate Recruitment, Education and Development We prioritize attracting and developing talented individuals with diverse backgrounds.
Most of our workforce consists of full-time employees, but we also employ part-time and seasonal teammates. Full-time teammates: Work 30+ hours weekly and are eligible for full benefits. Part-time teammates: Work under 30 hours weekly and may qualify for limited benefits based on hours worked. Seasonal/temporary teammates: Join for specific projects or interim needs, with limited durations.
Our Guiding Principles Our foundation is built on four pillars: people, performance, service and innovation. Our employees, whom we call “teammates,” form a cohesive team bound by shared behaviors and values—our cultural DNA. We are committed to serving our customers, communities, teammates, carrier partners and shareholders by embracing diversity of talent, experience and thought.
We consider our employee relations to be strong. 7 Our Guiding Principles Our foundation is built on four pillars: people, performance, service and innovation. Our employees, whom we call “teammates,” form a cohesive team bound by shared behaviors and values—our cultural DNA.
Our commitment to learning is reflected in programs like Brown & Brown University (BBU), the Education Assistance Program, our Women-Led Mentorship Program and the Peer Partnership Program. 8 Teammate Benefits We offer comprehensive benefits, including medical, dental, disability, life insurance and 401(k) plans. Annually, we refine these offerings based on teammate feedback to ensure we meet their needs.
Additionally, partnerships with colleges and a robust internship program enable us to cultivate new talent. Our commitment to learning is reflected in programs like Brown & Brown University (BBU), the Education Assistance Program, our Women-Led Mentorship Program and the Peer Partnership Program. Teammate Benefits We offer comprehensive benefits, including medical, dental, disability, life insurance and 401(k) plans.
Boyd was appointed as an executive vice president and the president of our Wholesale Brokerage segment in January 2021. Mr. Boyd became a senior vice president of the Company in May 2015 and from October 2019 until January 2021, served as our senior vice president of technology, innovation and digital strategy.
Boyd was appointed as an executive vice president in January 2021 and became president of our Specialty Distribution segment in August 2025. He previously served as the president of our Wholesale Brokerage segment from January 2021 until August 2025. Mr.
In 2024, there were no work-related fatalities and 17 injuries or occupational diseases, as determined based on the number of claims made under our workers’ compensation policy, excluding claims that were closed and for which no payment was made. By prioritizing safety and health, we ensure a secure and productive workplace for all teammates.
Comprehensive formal safety policies address hazardous conditions, emergencies and violence prevention. In 2025, there were no work-related fatalities and 39 injuries or occupational diseases, as determined based on the number of claims made under our workers’ compensation policies, excluding claims that were closed and for which no payment was made.
These operations generated $665 million, $527 million and $240 million of revenues for the years ended December 31, 2024, 2023 and 2022, respectively. We do not have any material foreign long-lived assets.
These operations generated $843 million, $665 million and $527 million of revenues for the years ended December 31, 2025, 2024 and 2023, respectively.
As a meritocracy, we provide opportunities for teammates to grow based on their performance and initiative with the goal of ensuring every teammate has a path to success. Culture Integrity, innovation, discipline and meritocracy define our culture. Our customer-first approach drives a high-performing, decentralized organization focused on growth and service.
We are committed to serving our customers, communities, teammates, carrier partners and shareholders by embracing diversity of talent, experience and thought. As a meritocracy, we provide opportunities for teammates to grow based on their performance and initiative with the goal of ensuring every teammate has a path to success. Culture Integrity, innovation, discipline and meritocracy define our culture.
Recruitment spans all levels, and our internal recruiting teams are vital in onboarding top talent. We have seen success hiring recent graduates, mid-level professionals and experienced industry leaders. In 2024, we expanded our team by nearly 1,000 teammates through 32 acquisitions. Additionally, partnerships with colleges and a robust internship program enable us to cultivate new talent.
Teammate Recruitment, Education and Development We prioritize attracting and developing talented individuals with diverse backgrounds. Recruitment spans all levels, and our internal recruiting teams are vital in onboarding top talent. We have seen success hiring recent graduates, mid-level professionals and experienced industry leaders. In 2025, we expanded our team by nearly 5,794 teammates through 43 acquisitions.
In 2024, there were no widespread layoffs or pay cuts as a result of external factors, such as the economy or natural disasters. Flexible work arrangements, financial aid through the Disaster Relief Foundation and a focus on well-being exemplify our commitment to teammates and their families. Teammate Engagement To foster engagement, we gather anonymous feedback annually.
Flexible work arrangements, financial aid through the Disaster Relief Foundation and a focus on well-being exemplify our commitment to teammates and their families. Teammate Engagement To foster engagement, we gather anonymous feedback annually. In 2025, 92% of teammates rated Brown & Brown a Great Place to Work®, making it our seventh consecutive year being Great Place to Work Certified.
Segment Information Historically, our business was divided into four reportable segments: (i) the Retail segment, (ii) the Programs segment, (iii) the Wholesale Brokerage segment and (iv) the Services segment.
Segment Information Our business is divided into two reportable segments: (i) the Retail segment, and (ii) the Specialty Distribution segment.
Walker was appointed president of our Programs segment in 2014. He served as regional executive vice president from 2012 to 2014. Mr. Walker is responsible for our Programs segment. He has also served as chief executive officer of Arrowhead since 2012.
Walker was appointed as an executive vice president in 2015 and became chairman of our Specialty Distribution segment in August 2025. He previously served as the president of our Programs segment from 2014 until August 2025. He served as regional executive vice president from 2012 to 2014. Mr.
The Programs segment, which acts as an MGU, provides professional liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services designated for specific industries, trade groups, governmental entities and market niches, all of which are delivered through a nationwide network of independent agents, including Brown & Brown retail agents, as well as affinity groups, wholesale entities and sold direct to consumers.
The programs businesses, which act as managing general underwriters (“MGUs”), provide targeted products and services designated for specific industries, trade groups, governmental entities and market niches, which are delivered to the insured directly, to affinity groups, through wholesale brokers or through a global network of independent agents, including Brown & Brown retail agents.
Our Programs segment has physical locations in 16 states plus Canada, France, Germany, Hong Kong, Italy, Malaysia, the Netherlands, United Arab Emirates and the United Kingdom.
Our Specialty Distribution segment has physical locations in the United States, Belgium, Canada, France, Germany, Hong Kong, Italy, Malaysia, the Netherlands, Singapore, United Arab Emirates and the United Kingdom. Competition The insurance intermediary business is highly competitive, and numerous firms actively compete with us for customers and insurance markets.
This includes regular communication with teammates about the importance of physical, mental and financial wellness. In addition, our chief executive officer shares biweekly video updates to connect with our teammates and encourage the importance of health and well-being.
In addition, our chief executive officer shares biweekly video updates to connect with our teammates and encourage the importance of health and well-being. Our Company encourages individuals to engage in activities that promote good mental health and, when needed, to seek out help from friends, teammates, family and medical professionals.
Approximately 56% of our U.S. teammates own stock in our Company, which drives an ownership mindset that influences how we invest and serve our customers. Our Team Our goal is to provide teammates with fulfilling, long-term careers. Most of our workforce consists of full-time employees, but we also employ part-time and seasonal teammates.
Programs like the Teammate Stock Purchase Plan ("TSPP"), 401(k) and long-term equity grants encourage teammates to share in Brown & Brown’s success. Over 60% of our U.S. teammates participate in our TSPP, which drives an ownership mindset that influences how we invest and serve our customers. Our Team Our goal is to provide teammates with fulfilling, long-term careers.
The Wholesale Brokerage segment markets and sells excess and surplus commercial and personal lines insurance, primarily through a nationwide network of independent agents and brokers, including Brown & Brown retail agents.
The wholesale brokerage businesses underwrite and place excess and surplus commercial and personal lines insurance, typically for specialized or hard-to-place types of risks, primarily through a global network of independent agents and brokers, including Brown & Brown retail agents. The specialty businesses offer solutions across affinity and administrative services, captives, reinsurance, travel/accident, warranty, and life & health.
By empowering, challenging and rewarding our teammates, we cultivate extraordinary results. With approximately 20% of the Company owned by teammates, we foster a unique ownership culture. Programs like the Employee Stock Purchase Plan, our 2008 Sharesave Plan, 401(k) and long-term equity grants encourage teammates to share in Brown & Brown’s success.
Our customer-first approach drives a high-performing, decentralized organization focused on growth and service. By empowering, challenging and rewarding our teammates, we cultivate extraordinary results. With nearly 20% of the Company owned by teammates, we foster a unique ownership culture.
Removed
We provide our customers with quality, non-investment insurance contracts, as well as other targeted, customized risk management products and services. We primarily operate as an agent or broker and therefore, with limited exceptions, do not assume underwriting risks. Within The Wright Insurance Group, LLC (“Wright”), we operate a write-your-own flood insurance carrier, Wright National Flood Insurance Company (“WNFIC”).
Added
The Company primarily operates as an agent or broker not assuming underwriting risks.
Removed
We also sell excess flood policies which are fully reinsured, thereby substantially eliminating WNFIC’s exposure to underwriting risk, as these policies are backed by either FEMA or a reinsurance carrier with an AM Best Company rating of “A” or better.
Added
However, we also operate and/or participate in various ancillary insurance operations, including (1) reinsurance companies and stand-alone captives that assume underwriting risk; (2) series captive insurance companies (“SCICs”); (3) protected cell companies; (4) segregated account companies; (5) a quota share captive and (6) an excess of loss layer captive (collectively, the "Captives").
Removed
We also participate in capitalized captive insurance facilities (the "Captives") for the purpose of providing additional capacity to place coverage, deliver revenues, and participate in underwriting results. The Company has traditionally participated in underwriting profits through profit-sharing contingent commissions. The Captives give us another way to continue to participate in underwriting results, while limiting exposure to underwriting claim costs.
Added
These ancillary insurance operations facilitate additional underwriting capacity, generate incremental revenues and/or enable the Company to participate in certain underwriting results. The Company also operates a write-your-own flood insurance carrier, Wright National Flood Insurance Company (“WNFIC”).
Removed
The Captives focus on property insurance for earthquake and wind exposed properties underwritten by certain of our managing general underwriters (“MGUs”). The Captives limit, but do not fully eliminate the Company's exposure to claims expenses either through reinsurance or by only participating in limited tranches of the underwriting results.
Added
In conjunction with the acquisition of RSC, the holding company for Accession Risk Management Group, Inc., in the third quarter of 2025, the Company realigned its business from three to two segments. As a result of the segment reorganization, the Company consolidated its Programs and Wholesale Brokerage segments into a new Specialty Distribution segment.
Removed
The Company is compensated for its services primarily by commissions paid by insurance companies, and to a lesser extent, by fees paid directly by customers for certain services.
Added
The Company now reports its financial results in the following two reportable segments: Retail and Specialty Distribution. The historical results, discussion and presentation of our business segments as set forth in the accompanying Consolidated Financial Statements reflect the impact of these changes for all periods presented in order to present segment information on a comparable basis.
Removed
Commission revenues are generally a percentage of the premium paid by the insured and typically depend upon the type of insurance, the particular insurance company and the nature of the services provided by us.
Added
There is no impact on our previously reported consolidated statements of income, balance sheets, statements of cash flows, statements of comprehensive income or statements of equity resulting from these changes.
Removed
In some limited cases, we share commissions with other agents or brokers who have acted jointly with us in a transaction and we recognize commissions net of any commissions paid to other intermediaries. We may also receive from an insurance company a profit-sharing contingent commission, which is a supplemental commission based primarily on underwriting results.
Added
These products and services include specialty property and casualty insurance, financial lines, life and health benefits, reinsurance, travel/accident and health insurance, captive administrative services, warranty services and specialty packages of coverages.
Removed
Fee revenues are generated by: (i) our Services segment, which provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, Social Security disability and Medicare benefits advocacy services, and other claims adjusting services, (ii) our Programs and Wholesale Brokerage segments, which earn fees primarily for the issuing of insurance policies on behalf of insurance carriers, and (iii) our Retail segment for fees received in lieu of commissions or for other services provided.
Added
Through these businesses the segment provides a diverse trading platform for insurance carriers as well as expanded access and niche solutions for brokers and customers navigating complex and hard-to-place risks. Our largest Specialty Distribution segment customer represented approximately 7.2% of the segment's total commissions and fees.
Removed
The amount of our revenues from commissions and fees is a function of several factors, including continued new business production, retention of existing customers, acquisitions and fluctuations in insurance premium rates and insurable exposure units, which are units that insurance companies use to measure or express insurance exposed to risk (such as property values, sales and payroll levels) to determine what premium to charge the insured.
Added
Our wholesale brokerage businesses, operating under the name "Bridge Specialty Group," offer capabilities across multiple lines including wholesale brokerage, binding and underwriting, and international markets, primarily through independent agents and brokers, including Brown & Brown retail agents. Our teams across the globe provide industry knowledge, placement across lines, and access to admitted, excess, and surplus lines carriers and Lloyd’s markets.
Removed
Insurance companies establish these premium rates based upon many factors, including loss experience, risk profile and reinsurance rates paid by such insurance companies, none of which we control.
Added
Our Specialty businesses, operating under the name "Arrowhead Specialty," is composed of the acquired One80 Intermediaries specialty businesses offering solutions across affinity and administrative services, captives, reinsurance, travel/accident, warranty, and life & health, including Oxford Risk Management Group, a captive risk management business. As of December 31, 2025, our Specialty Distribution segment employed 7,905 employees.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

74 edited+62 added−12 removed145 unchanged
Biggest changeWe are responsible for maintaining the security and privacy of our customers’ confidential and proprietary information and the personal data of their employees. We have put in place administrative, physical, procedures and technological safeguards designed to protect the security and privacy of this information; however, we cannot guarantee that this information will not be improperly disclosed or accessed.
Biggest changeWe have put in place administrative, physical, procedures and technological safeguards designed to protect the security and privacy of this information; however, we cannot guarantee that this information will not be improperly disclosed or accessed, or that the administrative, physical, procedures and technological safeguards are adequate to ensure that this information is timely disposed of or deleted in a manner compliant with such policies and applicable law or regulation.
Acquisitions also involve a number of risks, such as diversion of management’s attention; difficulties in the integration of acquired operations and retention of employees; increase in expenses and working capital requirements, which could reduce our return on invested capital; entry into unfamiliar markets or lines of business; unanticipated problems or legal liabilities; estimation of acquisition earn-outs; and tax and accounting issues, some or all of which could have a material adverse effect on our results of operations, financial condition and cash flows.
Acquisitions also involve a number of risks, such as diversion of management’s attention; difficulties in the integration of acquired operations and retention of employees; increase in expenses and 14 working capital requirements, which could reduce our return on invested capital; entry into unfamiliar markets or lines of business; unanticipated problems or legal liabilities; estimation of acquisition earn-outs; and tax and accounting issues, some or all of which could have a material adverse effect on our results of operations, financial condition and cash flows.
Other legislative developments that 19 could adversely affect us include: changes in our business compensation model as a result of regulatory developments (for example, potential changes to the Affordable Care Act); and federal and state governments establishing programs to provide health insurance or, in certain cases, property insurance in catastrophe-prone areas or other alternative market types of coverage that compete with or completely replace, insurance products offered by insurance carriers.
Other legislative developments that could adversely affect us include: changes in our business compensation model as a result of regulatory developments (for example, potential changes to the Affordable Care Act); and federal and state governments establishing programs to provide health insurance or, in certain cases, property insurance in catastrophe-prone areas or other alternative market types of coverage that compete with or completely replace, insurance products offered by insurance carriers.
Accordingly, if there are any such circumstances that occur during the year, we assess the carrying value of our amortizable intangible assets by considering the estimated future undiscounted cash flows generated by the corresponding business or asset group. Any impairment identified through this assessment may require that the carrying value of related amortizable intangible assets be adjusted.
Accordingly, if there are any such circumstances that occur during the year, we assess the carrying value of our amortizable intangible assets by considering the estimated future undiscounted cash flows generated by the corresponding business or asset 25 group. Any impairment identified through this assessment may require that the carrying value of related amortizable intangible assets be adjusted.
Various state legislatures or legislatures in the international jurisdictions in which we operate may adopt new laws addressing contingent commission arrangements, including laws prohibiting such arrangements, and addressing disclosure of such arrangements to insureds. Various state departments of insurance or other international regulators may also adopt new regulations addressing these matters which could adversely affect our results of operations.
Various state legislatures or 21 legislatures in the international jurisdictions in which we operate may adopt new laws addressing contingent commission arrangements, including laws prohibiting such arrangements, and addressing disclosure of such arrangements to insureds. Various state departments of insurance or other international regulators may also adopt new regulations addressing these matters which could adversely affect our results of operations.
For example, in the U.S. there has been increased legal scrutiny on inclusion and diversity-related programs and initiatives. Some investors have increased their emphasis on the ESG practices of companies across all industries, including with respect to climate and human capital management.
For example, in the U.S. there has been increased legal scrutiny on inclusion and diversity-related programs and initiatives. 22 Some investors have increased their emphasis on the ESG practices of companies across all industries, including with respect to climate and human capital management.
Our F&I businesses may be negatively impacted by a slowdown in vehicles sales in the united states or by regulatory changes, including tax-related changes, affecting the sale of f&I products by vehicle dealers. 16 Our F&I businesses earn commissions and fees from the sale of non-insurance warranty services and products by vehicle dealers.
Our F&I businesses may be negatively impacted by a slowdown in vehicles sales in the united states or by regulatory changes, including tax-related changes, affecting the sale of f&I products by vehicle dealers. Our F&I businesses earn commissions and fees from the sale of non-insurance warranty services and products by vehicle dealers.
While we have disaster recovery procedures in place, they may not be effective. Our insurance coverage with respect to natural 15 disasters is limited and is subject to deductibles and coverage limits. Such coverage may not be adequate or may not continue to be available at commercially reasonable rates and terms.
While we have disaster recovery procedures in place, they may not be effective. Our insurance coverage with respect to natural disasters is limited and is subject to deductibles and coverage limits. Such coverage may not be adequate or may not continue to be available at commercially reasonable rates and terms.
In the event of certain defaults, the lenders thereunder would not 20 be required to lend any additional amounts to or purchase any additional notes from us and could elect to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be due and payable.
In the event of certain defaults, the lenders thereunder would not be required to lend any additional amounts to or purchase any additional notes from us and could elect to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be due and payable.
Because our business is concentrated in the jurisdictions identified above, we face greater exposure to unfavorable changes in regulatory conditions in those jurisdictions than insurance intermediaries whose operations are more diversified through a greater number of states and/or countries.
Because our business is concentrated in the jurisdictions identified above, we face greater exposure to unfavorable changes in regulatory conditions in those jurisdictions than insurance intermediaries whose operations are more diversified through a greater number of states and/or 17 countries.
Any decrease in their payment to us could adversely affect our results of operations, profitability and our financial condition. 22 WE ARE EXPOSED TO INTANGIBLE ASSET RISK; SPECIFICALLY, OUR GOODWILL MAY BECOME IMPAIRED IN THE FUTURE.
Any decrease in their payment to us could adversely affect our results of operations, profitability and our financial condition. WE ARE EXPOSED TO INTANGIBLE ASSET RISK; SPECIFICALLY, OUR GOODWILL MAY BECOME IMPAIRED IN THE FUTURE.
Cybersecurity breaches of any of the systems we rely on may result from circumvention of security systems, denial-of-service attacks or other cyber-attacks, software bugs, malicious or destructive code, hacking, social engineering attacks (including “phishing” attacks and digital or telephonic impersonation), computer viruses, ransomware, malware, employee or insider error or threats, malfeasance, social engineering, physical breaches or other actions, any of which could expose us to unauthorized access, exfiltration, manipulation, corruption, loss or disclosure of proprietary, customer, employee or other data, the inability to render services due to system outages or other business disruptions, regulatory action and scrutiny, monetary and reputational damages and significant increases in compliance costs.
Cybersecurity breaches of any of the systems we rely on may result from circumvention of security systems, denial-of-service attacks or other cyber-attacks, software bugs, malicious or destructive code, hacking, social engineering attacks (including “phishing” attacks, business email compromise and digital or telephonic impersonation), computer viruses, ransomware, malware, employee or insider error or threats, malfeasance, social engineering, physical breaches or other actions, any of which could expose us to unauthorized access, exfiltration, manipulation, corruption, loss or 13 disclosure of proprietary, customer, employee or other data, the inability to render services due to system outages or other business disruptions, regulatory action and scrutiny, monetary and reputational damages and significant increases in compliance costs.
If the information we rely upon to run our businesses was found to be inaccurate or unreliable or if we fail to effectively maintain our information systems and data integrity, we could experience operational disruptions, regulatory or other legal problems, increases in operating expenses, loss of existing customers, difficulty in attracting new customers and/or maintaining third-party relationships or suffer other adverse consequences.
If the information we rely upon to run our businesses was found to be inaccurate or unreliable or if we fail to effectively maintain our information systems and data quality, integrity and availability, we could experience operational disruptions, regulatory or other legal problems, increases in operating expenses, loss of existing customers, difficulty in attracting new customers and/or maintaining third-party relationships or suffer other adverse consequences.
Our business is exposed to various risks arising out of natural disasters, including earthquakes, hurricanes, fires, floods, tornadoes, extreme weather or other climate events.
Our business is exposed to various risks arising out of natural disasters, including earthquakes, hurricanes, fires, floods, tornadoes, droughts, extreme weather or other climate events.
There have been no impairments recorded to either goodwill or amortizable intangibles for the years ended December 31, 2024, 2023 and 2022. CHANGES IN OUR ACCOUNTING ESTIMATES AND ASSUMPTIONS COULD NEGATIVELY AFFECT OUR FINANCIAL POSITION AND RESULTS OF OPERATIONS. We prepare our Consolidated Financial Statements in accordance with U.S. GAAP.
There have been no impairments recorded to either goodwill or amortizable intangibles for the years ended December 31, 2025, 2024 and 2023. CHANGES IN OUR ACCOUNTING ESTIMATES AND ASSUMPTIONS COULD NEGATIVELY AFFECT OUR FINANCIAL POSITION AND RESULTS OF OPERATIONS. We prepare our Consolidated Financial Statements in accordance with U.S. GAAP.
There is increased and sometimes conflicting focus, including from governments, non-governmental organizations, regulators (including the SEC), investors and customers, on ESG issues such as environmental stewardship, climate change, greenhouse gas emissions, diversity and inclusion, human rights, racial justice and workplace conduct.
There is continued and sometimes conflicting focus, including from governments, non-governmental organizations, regulators (including the SEC), investors and customers, on ESG issues such as environmental stewardship, climate change, greenhouse gas emissions, diversity and inclusion, human rights, racial justice and workplace conduct.
The insurance business in the U.S. is primarily a state-regulated industry, and therefore, state legislatures may enact laws that adversely affect the insurance industry. We also derived approximately 11% of our annual revenue from our businesses located in the United Kingdom.
The insurance business in the U.S. is primarily a state-regulated industry, and therefore, state legislatures may enact laws that adversely affect the insurance industry. We also derived approximately 10% of our annual revenue from our businesses located in the United Kingdom.
WE ARE SUBJECT TO LIMITED UNDERWRITING RISK THROUGH OUR PARTICIPATION IN CAPITALIZED CAPTIVE INSURANCE FACILITIES, WHICH MAY SUBJECT US TO LIMITED CLAIMS EXPENSES. From time to time, we participate in captive insurance facilities for the purpose of facilitating additional underwriting capacity for our customers and to participate in underwriting results.
WE ARE SUBJECT TO LIMITED UNDERWRITING RISK THROUGH OUR PARTICIPATION IN CAPTIVE INSURANCE FACILITIES, WHICH MAY SUBJECT US TO LIMITED CLAIMS EXPENSES. 18 From time to time, we participate in captive insurance facilities for the purpose of facilitating additional underwriting capacity for our customers and to participate in underwriting results.
INCREASING SCRUTINY AND CHANGING LAWS AND EXPECTATIONS FROM REGULATORS, INVESTORS AND CUSTOMERS WITH RESPECT TO OUR ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) PRACTICES AND DISCLOSURE CAN IMPOSE ADDITIONAL COSTS ON US OR EXPOSE US TO REPUTATIONAL OR OTHER RISKS.
INCREASING SCRUTINY AND CHANGING LAWS OR COMPETING EXPECTATIONS FROM REGULATORS, INVESTORS AND CUSTOMERS WITH RESPECT TO OUR ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) PRACTICES AND DISCLOSURE CAN IMPOSE ADDITIONAL COSTS ON US OR EXPOSE US TO REPUTATIONAL, LITIGATION OR OTHER RISKS.
We will be subject to the risk that we, our employees and our agents may take actions determined to be in violation of any of these laws, regulations or policies, for which we might be held responsible.
We are subject to the risk that we, our employees and our agents may take actions determined to be in violation of any of these laws, regulations or policies, for which we might be held responsible.
For the years ended December 31, 2024, 2023 and 2022, no more than 5% of our total core commissions was derived from insurance policies underwritten by one insurance company.
For the years ended December 31, 2025, 2024 and 2023, no more than 5% of our total core commissions was derived from insurance policies underwritten by one insurance company.
We completed our most recent evaluation of impairment for goodwill as of November 30, 2024 and determined that the fair value of goodwill exceeded the carrying value of goodwill allocated to each reporting unit.
We completed our most recent evaluation of impairment for goodwill as of November 30, 2025 and determined that the fair value of goodwill exceeded the carrying value of goodwill allocated to each reporting unit.
New government regulations could also result in new or more stringent forms of ESG oversight and new mandatory and voluntary reporting, diligence and disclosure, such as the Corporate Sustainability Reporting Directive in the European Union. These new laws, rules and regulations of our business could affect our operations or require significant expenditures.
New government regulations could also result in new or more stringent forms of ESG oversight and new mandatory and voluntary reporting, diligence and disclosure, such as the Corporate Sustainability Reporting Directive in the European Union. The impact of new laws, rules and regulations could affect our operations or require significant expenditures.
At December 31, 2024, we believe we were in compliance with the financial covenants and other limitations contained in each of the credit agreements that govern out debt.
At December 31, 2025, we believe we were in compliance with the financial covenants and other limitations contained in each of the credit agreements that govern out debt.
For the year ended December 31, 2024, we derived less than 4% of our annual total revenues from our F&I businesses.
For the year ended December 31, 2025, we derived less than 4% of our annual total revenues from our F&I businesses.
LAWS, REGULATIONS AND POLICIES COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS, FINANCIAL CONDITION OR STRATEGIC OBJECTIVES. We have completed several acquisitions that have introduced us to various new geographic markets, subjecting us to additional non-U.S. laws, regulations and policies which did not previously apply to us.
THE RISK OF NON-COMPLIANCE WITH NON-U.S. LAWS, REGULATIONS AND POLICIES COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS, FINANCIAL CONDITION OR STRATEGIC OBJECTIVES. We have completed several acquisitions that have introduced us to various new geographic markets, subjecting us to additional non-U.S. laws, regulations and policies which did not previously apply to us.
These new lines of business, technologies, products, and services may present us with additional risks, particularly in instances where the markets are new or not fully developed or where participants in such markets are new entrants.
These new lines of business, technologies, products, and services may present us with additional risks or increased regulatory burden, particularly in instances where the markets are new or not fully developed or where participants in such markets are new entrants.
Our international operations may be subject to a number of risks, including: • Difficulties in staffing and managing international operations; • Less flexible employee relationships, which may make it difficult and expensive to terminate employees and which limits our ability to prohibit employees from competing with us after their employment ceases; • Difficulties in maintaining, or resistance to, our corporate culture; • Political and economic instability (including acts of terrorism and outbreaks of war) either in the United States or globally; • Coordinating our communications and logistics across geographic distances and multiple time zones; • Unexpected changes in regulatory requirements and laws; • Adverse trade policies, and adverse changes to any of the policies of either the U.S. or any of the international jurisdictions in which we operate; • Adverse changes in tax rates; • Variations in foreign currency exchange rates; • Legal or political constraints on our ability to maintain or increase prices; • Governmental restrictions on the transfer of funds to or from us, including to or from our operations outside the United States; • Burdens of complying with, and the risk of employees or third parties acting on our behalf violating, anti-corruption laws in foreign countries; and • Burdens of complying with a wide variety of labor practices and international laws and or disclosure requirements, including those relating to export and import duties, environmental policies and privacy issues.
Our international operations may be subject to a number of risks, including: • Difficulties in staffing and managing international operations, increased travel, infrastructure and legal and compliance costs and risks associated with multiple international locations; • Less flexible employee relationships, which may make it difficult and expensive to terminate employees and which limits our ability to prohibit employees from competing with us after their employment ceases; • Difficulties in maintaining, or resistance to, our corporate culture; • Political and economic instability (including acts of terrorism, military actions, armed conflicts and outbreaks of war) either in the United States or globally; • Coordinating our communications and logistics across geographic distances and multiple time zones; • Unexpected changes in regulatory requirements and laws; • Adverse trade policies, trade wars or tariffs, and adverse changes to any of the policies of either the U.S. or any of the international jurisdictions in which we operate; • Adverse changes in tax rates; • Variations in foreign currency exchange rates; • Legal or political constraints on our ability to maintain or increase prices; • Governmental restrictions on the transfer of funds to or from us, including to or from our operations outside the United States; 15 • Burdens of complying with, and the risk of employees or third parties acting on our behalf violating, anti-corruption laws in foreign countries; and • Burdens of complying with a wide variety of labor practices and international laws and or disclosure requirements, including those relating to export and import duties, environmental policies and privacy issues.
The failure of any lender under our revolving credit facility (which matures in 2026) (the "Revolving Credit Facility") could adversely affect our ability to borrow on that facility, which over time could negatively impact our ability to consummate significant acquisitions or make other significant capital expenditures.
CREDIT MARKETS. 23 The failure of any lender under our revolving credit facility (which matures in 2026) (the “Revolving Credit Facility”) could adversely affect our ability to borrow on that facility, which over time could negatively impact our ability to consummate significant acquisitions or make other significant capital expenditures.
A significant portion of our businesses are concentrated in Florida, Michigan, California, Massachusetts, Georgia, and New York, where for the year ended December 31, 2024, we derived approximately 20%, 9%, 7%, 7%, 6%, and 5% of our annual revenue, respectively. We believe the current regulatory environment for insurance intermediaries in these states is no more restrictive than in other jurisdictions.
A significant portion of our businesses are concentrated in Florida, Michigan, Massachusetts, California, New York and Georgia where for the year ended December 31, 2025, we derived approximately 16%, 9%, 8%, 6%, 6%, and 5% of our annual revenue, respectively. We believe the current regulatory environment for insurance intermediaries in these states is no more restrictive than in other jurisdictions.
We are susceptible to losses and interruptions caused by hurricanes (particularly in Florida, where we have 52 offices and our headquarters, as well as in Texas, where we have 19 offices), earthquakes (including in California, where we have 20 offices), power shortages, telecommunications failures, water shortages, floods, fire, extreme weather conditions, geopolitical events such as terrorist acts and other natural or human-made disasters.
We are susceptible to losses and interruptions caused by hurricanes (particularly in Florida, where we have 68 offices and our headquarters, as well as in Texas, where we have 34 offices), earthquakes (including in California, where we have 22 offices), power shortages, telecommunications failures, water shortages, floods, fire, extreme weather conditions, geopolitical events such as terrorist acts and other natural or human-made disasters.
In particular, heightened demand for, and scrutiny of, ESG-related strategies and advice has increased the risk that we could be perceived as, or accused of, making inaccurate or misleading statements, commonly referred to as “greenwashing” or that we have otherwise run afoul of regulation.
In particular, heightened demand for, and scrutiny of, ESG-related strategies and advice has increased the risk that we could be perceived as, or accused of, making inaccurate or misleading statements, commonly referred to as “greenwashing,” or that we have otherwise run afoul of regulations.
As of the date of the filing of our Annual Report on Form 10-K for the 2024 fiscal year, we have $8 billion of goodwill recorded on our Consolidated Balance Sheet.
As of the date of the filing of our Annual Report on Form 10-K for the 2025 fiscal year, we have $15 billion of goodwill recorded on our Consolidated Balance Sheet.
CERTAIN OF OUR SHAREHOLDERS HAVE SIGNIFICANT CONTROL. At December 31, 2024, our executive officers, directors and certain of their family members collectively beneficially owned approximately 15.6% of our outstanding common stock, of which J. Hyatt Brown, our chairman of the board, and his sons, J. Powell Brown, our president and chief executive officer, and P.
CERTAIN OF OUR SHAREHOLDERS HAVE SIGNIFICANT CONTROL. 19 At December 31, 2025, our executive officers, directors and certain of their family members collectively beneficially owned approximately 13.1% of our outstanding common stock, of which J. Hyatt Brown, our chairman of the board, and his sons, J. Powell Brown, our president and chief executive officer, and P.
We are subject to a variety of continuously evolving and developing laws and regulations globally regarding privacy, data protection and data security, including those related to the collection, storage, retention, handling, use, processing, disclosure, transfer, destruction and security of personal data.
We are subject to a variety of continuously evolving and developing laws and regulations globally regarding privacy, data protection and data security, including those related to the collection, storage, retention, handling, use, processing, disclosure, cross-border transfer, destruction and security of personal data. Significant uncertainty exists as privacy and data protection laws evolve.
The occurrence of natural disasters could also result in reduced underwriting capacity by insurance carriers, making it more difficult for us to place business.
The occurrence of natural disasters could also result in reduced underwriting capacity by insurance carriers, making it more difficult for us to place business, as well as cause us to incur operational challenges.
Over the last three years our profit-sharing contingent commissions generally have been in the range of 3.0% to 4.1% of our previous year’s total core commissions and fees.
Over the last three years our profit-sharing contingent commissions generally have been in the range of 3.7% to 5.6% of our previous year’s total core commissions and fees.
We are subject to various actual and potential claims, regulatory actions and other proceedings, including those relating to alleged errors and omissions in connection with the placement or servicing of insurance and/or the provision of services in the ordinary course of business, of which we cannot, and likely will not be able to, predict the outcome with certainty.
We are subject to various actual and potential claims, including the claims detailed in “We are subject to risks related to Accession’s business, including underwriting risk in connection with certain captive insurance companies” above, regulatory actions and other proceedings, including those relating to alleged errors and omissions in connection with the placement or servicing of insurance and/or the provision of services in the ordinary course of business, of which we cannot, and likely will not be able to, predict the outcome with certainty.
Due to this uncertainty, we may face challenges complying with existing and new laws, and our policies and governance frameworks may not be successful in mitigating these risks.
Due to this uncertainty, we may face challenges complying with existing and new laws, including achieving compliance within the required periods for compliance, and our policies and governance frameworks may not be successful in mitigating these risks.
Actual or alleged violations could result in substantial fines, sanctions, civil or criminal penalties, curtailment of operations in certain jurisdictions, competitive or reputational harm, litigation or regulatory action and other consequences that might adversely affect our results of operations, financial condition or strategic objectives. 18 OUR BUSINESS, RESULTS OF OPERATIONS, FINANCIAL CONDITION AND LIQUIDITY MAY BE MATERIALLY ADVERSELY AFFECTED BY CERTAIN ACTUAL AND POTENTIAL CLAIMS, REGULATORY ACTIONS AND PROCEEDINGS.
Actual or alleged violations could result in substantial fines, sanctions, civil or criminal penalties, curtailment of operations in certain jurisdictions, competitive or reputational harm, litigation or regulatory action and other consequences that might adversely affect our results of operations, financial condition or strategic objectives.
Disclosure of this information, or other security breach of our information systems, or those of third-party vendors we rely on, could harm our reputation and subject us to liability under our contracts and laws that protect personal data, resulting in increased costs or loss of revenues. THE RISK OF NON-COMPLIANCE WITH NON-U.S.
Disclosure of this information, or other security breach of our information systems, or those of third-party vendors we rely on could harm our reputation and subject us to liability under our contracts and laws that protect personal data, resulting in increased costs or loss of revenues. These risks may be exacerbated in connection with the integration of Accession.
As we do not control many of the actions of these third parties, we are subject to the risk that their decisions, actions, inactions or operations may adversely impact us and replacing these service providers could create significant delay in services or operations and/or additional expense A failure by the third parties to: (i) comply with service level agreements in a high quality and timely manner, particularly during periods of our peak demand for their services, (ii) maintain adequate internal controls that may impact our own financial reporting, or (iii) adequately maintain the confidentiality of any of our data or trade secrets or adequately protect or properly use other intellectual property to which they may have access, could result in economic, financial and/or reputational harm to us.
A failure by the third parties to: (i) comply with service level agreements in a high quality and timely manner, particularly during periods of our peak demand for their services, (ii) maintain adequate internal controls that may impact our own financial reporting, or (iii) adequately maintain the confidentiality of any of our data or trade secrets or adequately protect or properly use other intellectual property to which they may have access, could result in economic, financial and/or reputational harm to us.
Our growth strategy partially includes the acquisition of other insurance intermediaries and related businesses. Our ability to successfully identify suitable acquisition candidates, negotiate transactions on favorable terms, complete acquisitions, successfully integrate acquired businesses into our operations, and expand into new markets requires us to implement and continuously improve our operations and our financial and management information systems.
Our ability to successfully identify suitable acquisition candidates, negotiate transactions on favorable terms, complete acquisitions, successfully integrate acquired businesses into our operations, including our recent acquisition of Accession, and expand into new markets requires us to implement and continuously improve our operations and our financial and management information systems.
OR GLOBAL ECONOMIC CONDITIONS, INCLUDING AN EXTENDED SLOWDOWN IN THE MARKETS IN WHICH WE OPERATE, MAY ADVERSELY AFFECT OUR BUSINESS. 21 If economic conditions were to worsen, a number of negative effects on our business could result, including declines in insurable exposure units, declines in insurance premium rates, the financial insolvency of insurance companies, or the reduced ability of customers to pay.
If economic conditions were to worsen, a number of negative effects on our business could result, including declines in insurable exposure units, declines in insurance premium rates, the financial insolvency of insurance companies, or the reduced ability of customers to pay.
While moderate inflation generally benefits our industry by increasing insurable asset values, significant inflation is often accompanied by higher interest rates, which can have negative effects on the global economy.
While moderate inflation generally benefits our industry by increasing insurable asset values, significant inflation is often accompanied by higher interest rates, which can have negative effects on the global economy. Lower levels of inflation may reduce our revenue growth by slowing the increase in insurable asset values.
Also, as climate change issues become more prevalent, the U.S. and other governments are beginning to respond to these issues.
Also, as climate change issues become more prevalent, governments are beginning to respond to these issues.
Any of the foregoing may have a material adverse effect on our business, financial condition and reputation. OUR GROWTH STRATEGY DEPENDS, IN PART, ON THE ACQUISITION OF OTHER INSURANCE INTERMEDIARIES AND RELATED BUSINESSES, WHICH MAY NOT BE AVAILABLE ON ACCEPTABLE TERMS IN THE FUTURE OR WHICH, IF CONSUMMATED, MAY NOT BE ADVANTAGEOUS TO US.
OUR GROWTH STRATEGY DEPENDS, IN PART, ON THE ACQUISITION OF OTHER INSURANCE INTERMEDIARIES AND RELATED BUSINESSES, WHICH MAY NOT BE AVAILABLE ON ACCEPTABLE TERMS IN THE FUTURE OR WHICH, IF CONSUMMATED, MAY NOT BE ADVANTAGEOUS TO US. Our growth strategy partially includes the acquisition of other insurance intermediaries and related businesses.
In addition, given the long-tail nature of professional liability claims, errors and omissions matters can relate to matters dating back many years. Our business, results of operations, financial condition and liquidity may be adversely affected if, in the future, our insurance coverage proves to be inadequate or unavailable, or if there is an increase in liabilities for which we self-insure.
Our business, results of operations, financial condition and liquidity may be adversely affected if, in the future, our insurance coverage proves to be inadequate or unavailable, or if there is an increase in liabilities for which we self-insure.
Significant uncertainty exists as privacy and data protection laws evolve and may be interpreted and applied differently from jurisdiction to jurisdiction may create inconsistent or conflicting requirements. These laws apply to transfers of information among our affiliates, as well as to transactions we enter into with third-party vendors.
Such laws are complex and may be interpreted and applied differently from jurisdiction to jurisdiction, which may create inconsistent or conflicting requirements. Additionally, these laws often develop in ways we cannot predict. These laws apply to transfers of information among our affiliates, as well as to transactions we enter into with third-party vendors.
We have from time to time experienced cybersecurity incidents, such as malware infections, phishing campaigns, ransomware and vulnerability exploit attempts, which to date have not had a material impact on our business. 12 We are an acquisitive organization, and the process of integrating the information systems of the businesses we acquire is complex and exposes us to additional risks as we might not adequately identify weaknesses in the acquired company’s information systems, which could expose us to unexpected liabilities or make our own systems more vulnerable to attack.
We are an acquisitive organization, and the process of integrating the information systems of the businesses we acquire is complex and exposes us to additional risks as we might not adequately identify weaknesses in the acquired company’s information systems, which could expose us to unexpected liabilities or make our own systems more vulnerable to attack.
The enactment of more restrictive laws, rules, regulations or future enforcement actions or investigations could impact us through increased costs or restrictions on our business, and noncompliance could result in regulatory penalties and significant legal liability. IMPROPER DISCLOSURE OF CONFIDENTIAL INFORMATION COULD NEGATIVELY IMPACT OUR BUSINESS.
In addition, enforcement actions and investigations by regulatory authorities related to data security incidents and privacy violations generally continue to increase. The enactment of more restrictive laws, rules, regulations or future enforcement actions or investigations could impact us through increased costs or restrictions on our business and could result in regulatory penalties and significant legal liability.
Additional post-acquisition risks include integration into our existing culture, risks related to retention of personnel, entry into unfamiliar or complex markets or lines of business, contingencies or liabilities, such as violations of sanctions laws or anti-corruption laws, risk relating to ensuring compliance with licensing and regulatory requirements and tax and accounting issues.
Additional post-acquisition risks include integration into our existing culture, managing such acquired business or the larger company that results from such acquisition, an inability to establish uniform standards, controls, systems, procedures and policies, risks related to retention of personnel, entry into unfamiliar or complex markets or lines of business, contingencies or liabilities not covered by or in excess of escrowed or indemnified amounts, such as those arising from violations of sanctions laws or anti-corruption laws, risk relating to ensuring compliance with licensing and regulatory requirements and tax and accounting issues.
We have internal policies governing the use of AI and RPA by our employees designed to protect us from breaches of data privacy, errors and omissions liability and regulatory enforcement risk; however, our employees could violate these policies and expose us to such risks.
We have internal policies and controls governing the development, procurement, deployment, and use of AI and RPA by our employees designed to align with globally recognized AI principles, maintain trust with customers and protect us from cybersecurity threats, breaches of data privacy and intellectual property, errors and omissions liability and regulatory enforcement risk; however, our employees could violate these policies and they or external threat actors could circumvent our controls and expose us to such risks.
Many statutory requirements, both in the United States and abroad, include obligations for companies to notify individuals of security breaches involving certain personal information, which could result from breaches experienced by us or our vendors. In addition to government regulation, privacy advocates and industry groups have and may in the future propose self-regulatory standards from time to time.
Many statutory requirements, both in the United States and abroad, include obligations for companies to notify individuals, or the applicable regulatory authority, of security breaches involving certain personal information before we fully understand or appreciate the extent of the breach, which could result from breaches experienced by us or our vendors.
These and similar initiatives around the world could increase the cost of developing, implementing or securing our servers and require us to allocate more resources towards enhanced technologies, further contributing to our technology and compliance costs. In addition, enforcement actions and investigations by regulatory authorities related to data security incidents and privacy violations continue to increase.
Such non-compliance could lead to enforcement actions or investigations if our practices are deemed deceptive, unfair, or misrepresentative of our actual practices. These and similar initiatives around the world could increase the cost of developing, implementing or securing our servers and require us to allocate more resources towards enhanced technologies, further contributing to our technology and compliance costs.
Due to the impracticality of incorporating all relevant data into the models or algorithms used by AI and RPA it is inevitable that data sets within these models will contain inaccuracies and errors, and potential biases. This could potentially render such models inadequate or flawed, negatively impacting the effectiveness of the technology.
Additionally, AI and RPA heavily rely on the collection and analysis of extensive data sets and interaction between systems. Due to the impracticality of incorporating all relevant data into the models or algorithms used by AI and RPA it is inevitable that data sets within these models will contain inaccuracies and errors, and potential biases.
Other competitive concerns may include the quality of our products and services, our pricing and the ability of some of our customers to self-insure and the entrance of technology companies into the insurance intermediary business. A number of insurance companies are engaged in the direct sale of insurance, primarily to individuals, and do not pay commissions to agents and brokers.
Other competitive concerns may include the quality of our products and services, our data analytics capabilities, our pricing and the ability of some of our customers to self-insure and the entrance of technology companies into the insurance 24 intermediary business.
We present these risk factors grouped by category, and the risks factors contained in each respective category are presented in order of their relative priority to us. 11 Risks Related to Our Business OUR INABILITY TO HIRE, RETAIN AND DEVELOP QUALIFIED EMPLOYEES, AS WELL AS THE LOSS OF ANY OF OUR EXECUTIVE OFFICERS OR OTHER KEY EMPLOYEES, COULD NEGATIVELY IMPACT OUR ABILITY TO RETAIN EXISTING BUSINESS, GENERATE NEW BUSINESS AND/OR INNOVATE.
Risks Related to Our Business OUR INABILITY TO HIRE, RETAIN AND DEVELOP QUALIFIED EMPLOYEES, AS WELL AS THE LOSS OF ANY OF OUR EXECUTIVE OFFICERS OR OTHER KEY EMPLOYEES, COULD NEGATIVELY IMPACT OUR ABILITY TO RETAIN EXISTING BUSINESS, GENERATE NEW BUSINESS AND/OR INNOVATE. Our success depends on our ability to attract, retain and develop skilled and experienced personnel.
The use of these technologies by our competitors may give them a competitive advantage that cannot be predicted at this time, and it may negatively affect our assumptions regarding the competitive landscape of our business. Consequently, it is difficult to predict all risks associated with these new technologies, which may eventually impact our business, results of operations, or financial condition.
Consequently, it is difficult to predict all risks associated with these new technologies, which may eventually impact our business, results of operations, or financial condition.
WE HAVE OPERATIONS INTERNATIONALLY, WHICH MAY RESULT IN A NUMBER OF ADDITIONAL RISKS OR REQUIRE MORE MANAGEMENT TIME AND EXPENSE THAN OUR DOMESTIC OPERATIONS TO ACHIEVE OR MAINTAIN PROFITABILITY. 13 We have substantial operations in the United Kingdom, as well as operations in Belgium, Bermuda, Canada, Cayman Islands, France, Germany, Hong Kong, Republic of Ireland, Italy, Malaysia, the Netherlands, Singapore and United Arab Emirates.
We have substantial operations in the United Kingdom, as well as operations in Belgium, Bermuda, Canada, Cayman Islands, France, Germany, Hong Kong, India, Italy, Malaysia, the Netherlands, Republic of Ireland, Singapore and United Arab Emirates. In the future, we intend to continue to consider additional international expansion opportunities.
Our success depends on our ability to attract, retain and develop skilled and experienced personnel. There is significant competition within the insurance industry and from businesses outside the industry for exceptional employees, especially in key positions.
There is significant competition within the insurance industry and from businesses outside the industry for exceptional employees, especially in key positions. If we are not able to successfully attract, retain, develop and motivate our employees, our business, financial results and reputation could be materially and adversely affected.
Maintaining, protecting and enhancing these capabilities to keep pace with evolving industry and regulatory standards, and changing customer preferences, requires an ongoing commitment of significant resources.
Maintaining, protecting and enhancing these capabilities to keep pace with evolving industry and regulatory standards, and changing customer preferences, requires an ongoing commitment of significant resources. In addition, data quality, integrity and availability is increasingly important to the success of our business strategies, operations, and our ability to leverage our data, both in our products and as a strategic asset.
We may have to devote significant resources to attract and retain talent, which could negatively affect our business, results of operations and financial condition. Also, if any of our key employees were to join a competitor or form a competing company, some of our customers could choose to use the services of that competitor instead of our services.
Our employees have been, and may continue to be, subject to poaching efforts by our competitors. Also, if any of our key employees were to join a competitor or form a competing company, some of our customers could choose to use the services of that competitor instead of our services, which has occurred in the past and may occur again.
Additionally, any contractual protections with such third parties, including our right to indemnification, if any, may be limited or insufficient to prevent a negative impact on our business from such compromise or failure. As these threats evolve, cybersecurity incidents will be more difficult to detect, defend against, mitigate and remediate.
Additionally, any contractual protections with such third parties, including our right to indemnification, if any, may be limited or insufficient to prevent a negative impact on our business from such compromise or failure. Further, we cannot ensure that our and our third-party vendors’ existing insurance coverage will continue to be available on acceptable terms or at all.
Competition for skilled professionals remains intense, and employers are implementing new offerings to attract talent, including increasing compensation, enhancing health and wellness solutions, and providing in-office and remote work options. We may be unable to retain our employees if we do not offer employment terms that are competitive with the rest of the labor market.
This risk may be increased by remote or hybrid working arrangements, which may make our employees more vulnerable to solicitations by competing firms. Competition for skilled professionals remains intense, and employers are implementing new offerings to attract talent, including increasing compensation, enhancing health and wellness solutions, and providing in-office and remote work options.
As a result, our executive officers, directors and certain of their family members have significant influence over (i) the election of our board of directors, (ii) the approval or disapproval of any other matters requiring shareholder approval and (iii) our affairs and policies. 17 Risks Related to Legal, Compliance and Regulatory Matters CHANGES IN DATA PRIVACY AND PROTECTION LAWS AND REGULATIONS, OR ANY FAILURE TO COMPLY WITH SUCH LAWS AND REGULATIONS, COULD ADVERSELY AFFECT OUR BUSINESS AND FINANCIAL RESULTS.
Barrett Brown, our executive vice president, beneficially owned approximately 12.6%. As a result, our executive officers, directors and certain of their family members have significant influence over (i) the election of our board of directors, (ii) the approval or disapproval of any other matters requiring shareholder approval and (iii) our affairs and policies.
These third parties include agents and other brokers and intermediaries, insurance markets, data providers, payroll service providers, software and system vendors, health plan providers, custodians, risk modeling providers, and providers of human resource functions. Some of these providers are located outside the U.S., which exposes us to business disruptions and political risks inherent when conducting business outside of the U.S.
These third parties include agents and other brokers and intermediaries, insurance markets, data providers, payroll service providers, software and system vendors, health plan providers, custodians, risk modeling providers, and providers of human resource functions. Certain parties may receive, or otherwise have access to, confidential customer, employee, or company information.
Actual results could differ from these estimates, or changes in assumptions, estimates, policies, or developments in the business may change our initial estimates, which could materially affect our Consolidated Financial Statements. FUTURE PANDEMICS, EPIDEMICS OR OUTBREAKS OF INFECTIOUS DISEASE, AND THE RESULTING GOVERNMENTAL AND SOCIETAL RESPONSES MAY MATERIALLY AND ADVERSELY AFFECT OUR BUSINESS, LIQUIDITY, CUSTOMERS, INSURANCE CARRIERS AND THIRD PARTIES.
Actual results could differ from these estimates, or changes in assumptions, estimates, policies, or developments in the business may change our initial estimates, which could materially affect our Consolidated Financial Statements. ITEM 1B. Unresolve d Staff Comments. None.
We are exposed to the risks associated with these inaccuracies, errors and biases, along with the adverse impacts that such flawed models could have on our business and operations. Furthermore, governance and ethical issues relating to the use of AI or RPA may also result in reputational harm, liability and/or financial losses. AI, RPA and related applications are developing rapidly.
This could potentially render such models inadequate or flawed, negatively impacting the effectiveness of the technology or our services. We are exposed to the risks associated with these inaccuracies, errors and biases, 16 along with the adverse impacts that such flawed models could have on our business and operations.
We are also subject to the risk that the sales price is less than the amount reflected on our balance sheet.
We are also subject to the risk that the sales price is less than the amount reflected on our balance sheet. WE HAVE OPERATIONS INTERNATIONALLY, WHICH MAY RESULT IN A NUMBER OF ADDITIONAL RISKS OR REQUIRE MORE MANAGEMENT TIME AND EXPENSE THAN OUR DOMESTIC OPERATIONS TO ACHIEVE OR MAINTAIN PROFITABILITY.
Losing employees who manage or support substantial customer relationships or possess substantial experience or expertise could adversely affect our ability to secure and complete customer engagements and/or innovate, which would adversely affect our results of operations. This risk may be increased by remote or hybrid working arrangements, which may make our employees more vulnerable to solicitations by competing firms.
Our success and future performance depend in part upon the continued services of our executive officers, senior management, and other highly skilled personnel. Losing employees who manage or support substantial customer relationships or possess substantial experience or expertise could adversely affect our ability to secure and complete customer engagements and/or innovate, which would adversely affect our results of operations.
Our compliance with these covenants could limit management’s discretion in operating our business and could prevent us from engaging in certain potentially beneficial activities. OUR BUSINESS, AND THEREFORE OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION, MAY BE ADVERSELY AFFECTED BY FURTHER CHANGES IN THE U.S. CREDIT MARKETS.
Our compliance with these covenants could limit management’s discretion in operating our business and could prevent us from engaging in certain potentially beneficial activities. FUTURE SALES OR OTHER DILUTION OF OUR EQUITY COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK. An important way we grow our business is through acquisitions.
Laws and regulations related to ESG issues continue to evolve, including in the U.S., the U.K. and the EU. New regulations may impose additional compliance or disclosure obligations on us.
New laws and regulations may impose additional compliance or disclosure obligations on us, and we may face inconsistent or conflicting requirements across jurisdictions.
Additionally, we use artificial intelligence (“AI”) and robotic processing automation (“RPA”) in our business, including with respect to services provided to our customers.
Additionally, we use AI and robotic processing automation (“RPA”) in our business. We are using enterprise-managed AI tools to enhance productivity and operational efficiency, and we are actively exploring use-cases.
Removed
If we are not able to successfully attract, retain, develop and motivate our employees, our business, financial results and reputation could be materially and adversely affected. Our success and future performance depend in part upon the continued services of our executive officers, senior management, and other highly skilled personnel.
Added
We present these risk factors grouped by category, and the risks factors contained in each respective category are presented in order of their relative priority to us.
Removed
In the future, we intend to continue to consider additional international expansion opportunities.
Added
Risks Related to the Acquisition of Accession WE MAY FAIL TO REALIZE ALL OF THE ANTICIPATED BENEFITS OF THE TRANSACTION (INCLUDING USE OF ACCESSION’S DEFERRED TAX ASSETS), AND THE TRANSACTION OR THOSE BENEFITS MAY TAKE LONGER TO REALIZE THAN EXPECTED. 11 We believe that there are significant benefits and synergies that may be realized through the Transaction.
Removed
Furthermore, our exposure to these risks may increase if our vendors, suppliers, or other third-party providers employ AI or RPA in relation to the products or services they provide to us, as we have limited control over such use in third-party products or services.
Added
However, the efforts to realize these benefits and synergies will be a complex process and may disrupt existing operations if not implemented in a timely and efficient manner. The full benefits of the Transaction, including the anticipated synergies and growth opportunities, may not be realized as expected or may not be achieved within the anticipated time frame, or at all.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur chief security officer has more than 35 years of experience in technology, operations, information risk and security. Our chief security officer has deep experience developing comprehensive information security programs for large and complex organizations.
Biggest changeBoth our chief security officer and our chief information security officer bring extensive experience in technology, operations, information risk and security in both the military and the private sector, including developing comprehensive information security programs for large and complex organizations.
The Audit Committee, composed entirely of independent directors, is responsible for organization-wide oversight regarding information security and reports to the full board of directors. All directors typically attend our committee meetings, which we believe creates transparency and a more collaborative and informed Board.
The audit committee of our board of directors, composed entirely of independent directors, is responsible for organization-wide oversight regarding information security and reports to the full board of directors. All directors typically attend our committee meetings, which we believe creates transparency and a more collaborative and informed board.
The Audit Committee receives reports on at least a quarterly basis from the Company’s chief security officer on the Company’s latest information security risks and mitigation strategies. Assessing, identifying and managing cybersecurity related risks are integrated into our overall enterprise risk management (ERM) program.
The audit committee receives reports on at least a quarterly basis from the Company’s chief information security officer on the Company’s latest information security risks and mitigation strategies. Assessing, identifying and managing cybersecurity related risks are integrated into our overall enterprise risk management (ERM) program.
The program is composed of the following: Internal persistent scans and external monthly scans; • Internal persistent scans and external monthly scans; • Static and dynamic software custom code to develop scans for secure code development; • Periodic third-party executed penetration tests and risk assessments; and • A model to comply with SOC 2 Type II standards or other industry certifications at certain offices based on an office’s contractual agreements with carrier partners or other third parties.
The program is composed of the following: • Internal persistent scans and external monthly scans; • Static and dynamic software custom code to develop scans for secure code development; • Periodic third-party executed penetration tests and risk assessments; and • A model to comply with SOC 2 Type II standards or other industry certifications at certain offices based on an office’s contractual agreements with carrier partners or other third parties.
Additionally, external partners and products undergo a comprehensive security risk assessment process using our security scorecard tool, which evaluates data security risks and vulnerability maturity. Our teammates participate in an annual online security and compliance training program that includes testing. They are also subject to security awareness communications and random simulated phishing campaigns.
Additionally, external partners and products undergo a comprehensive security risk assessment process using our security scorecard tool, which evaluates data security risks and vulnerability maturity . Our teammates participate in an annual online security and compliance training 26 program that includes testing. They are also subject to security awareness communications and random simulated phishing campaigns.
For more information about the cybersecurity risks we face, see the risk factor entitled “A cybersecurity attack, or any other interruption in information technology and/or data security that may impact our operations 24 or the operations of third parties that support us, could adversely affect our business, financial condition and reputation” in Item 1A - Risk Factors.
For more information about the cybersecurity risks we face, see the risk factor entitled “A cybersecurity attack, or any other interruption in information technology and/or data security that may impact our operations or the operations of third parties that support us, could adversely affect our business, financial condition and reputation” in Item 1A - Risk Factors.
In 2024, nearly all Brown & Brown teammates completed ethical conduct training, cybersecurity awareness training, the California Consumer Privacy Act (CCPA) Survey, and the Annual Certification for Insurance Licensees training, which serves as a reminder of the regulatory obligation to report certain changes to the jurisdictions where they are licensed.
In 2025, nearly all Brown & Brown teammates completed ethical conduct training, cybersecurity awareness training, the California Consumer Privacy Act (CCPA) Survey, and the Annual Certification for Insurance Licensees training, which serves as a reminder of the regulatory obligation to report certain changes to the jurisdictions where they are licensed.
We have also established a structured incident response process driven by the severity and type of issue. This process, which engages our security operations center (SOC) for incident identification, our internal security team for incident analysis and assignment, our Technology Solutions team for isolation/remediation and our third-party business partner for continuity awareness and escalations.
We have also established a structured incident response process driven by severity and type of issue. This process engages our security operations center (SOC) for incident identification, our internal security team for incident analysis and assignment, our Technology Solutions team for isolation/remediation and our third-party business partner for continuity awareness and escalations.
We face a number of cybersecurity risks in connection with our business and have from time-to-time experienced cybersecurity incidents, such as malware infections, phishing campaigns, ransomware and vulnerability exploit attempts, which to date have not had a material impact on our business strategy, results of operations, or financial condition.
We face a number of cybersecurity risks in connection with our business and have experienced cybersecurity incidents, such as malware infections, phishing campaigns, ransomware and vulnerability exploit attempts, which to date have not had a material impact on our business strategy, results of operations or financial condition.
As part of the Company’s ERM program, the Board receives a report at least annually from the Company’s chief executive officer and chief legal officer concerning the Company’s risks, which include cybersecurity risks. The Company’s chief security officer is responsible for developing and implementing our information security program.
As part of the Company’s ERM program , the board of directors receives a report, at least annually, from the Company’s chief executive officer and chief legal officer concerning the Company’s risks, which include cybersecurity risks. The Company’s chief information security officer, under the direction of Company’s chief security officer, is responsible for developing and implementing our information security program.
He also brings extensive experience in both the military and the private sector and is a specialist in attack surface reduction, incident response and recovery, targeted threat hunting, forensics/malware analysis and threat group analysis. Our information security team deployed a structured and measured vulnerability management program that proactively identifies vulnerabilities across our platforms and processes.
With more than 35 years of experience, our chief security officer has led industry specialists in attack surface reduction, incident response and recovery, targeted threat hunting, forensics/malware analysis and threat group analysis. Our information security team has deployed a structured and measured vulnerability management program that proactively identifies vulnerabilities across our platforms and processes.
Added
With more than 25 years of experience, our chief information security officer previously served as the chief information security officer of a highly regulated publicly traded company, where he developed and implemented robust security controls, standards, policies and procedures aligned with measurable industry standards.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that our facilities are suitable and adequate for present purposes, and that the productive capacity in such facilities is substantially being utilized, taking into consideration the post-pandemic adoption of a remote and hybrid workforce.
Biggest changeWe believe that our facilities are suitable and adequate for present purposes, and that the productive capacity in such facilities is substantially being utilized.
ITEM 2. Pr operties. We own our executive offices, which are located at 300 North Beach Street, Daytona Beach, Florida 32114, as well as certain other vacant land and office buildings in the Daytona Beach area. We lease offices at each of our other 514 locations.
ITEM 2. Pr operties. We own our executive offices, which are located at 300 North Beach Street, Daytona Beach, Florida 32114, as well as certain other vacant land and office buildings in the Daytona Beach area. We also own our office located in Somerton, England. We lease offices at each of our other 710 locations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. Legal Proceedings. We are subject to numerous litigation claims that arise in the ordinary course of business. We do not believe any of these claims are, or are likely to become, material to our business. ITEM 4. Mine Saf ety Disclosures. Not applicable. 25 PAR T II
Biggest changeITEM 3. Legal Proceedings. We are subject to numerous litigation claims that arise in the ordinary course of business. We do not believe any of these claims are, or are likely to become, material to our business. ITEM 4. Mine Saf ety Disclosures. Not applicable. 27 PAR T II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 25 Part II 26 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 Item 6. Reserved 28 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 45 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 27 Part II 28 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28 Item 6. Reserved 30 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 47 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs October 1, 2024 to October 31, 2024 3,027 $ 106.33 — $ 249 November 1, 2024 to November 30, 2024 — — — 249 December 1, 2024 to December 31, 2024 — — — 249 Total 3,027 $ 106.33 — $ 249 (1) All shares reported in this column are attributable to shares withheld for taxes in connection with vesting of restricted shares awarded under our 2010 Stock Incentive Plan and 2019 Stock Incentive Plan.
Biggest changePeriod Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) October 1, 2025 to October 31, 2025 156,455 $ 79.89 156,455 $ 1,488 November 1, 2025 to November 30, 2025 1,099,515 79.56 1,099,515 1,400 December 1, 2025 to December 31, 2025 — — — 1,400 Total 1,255,970 $ 79.62 1,255,970 $ 1,400 (1) All shares reported in this column are attributable to shares purchased in open market transactions. 28 Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Exchange Act, each as amended, except to the extent that we specifically incorporate such information by reference into such filing.
Performance Graph The following graph is a comparison of five-year cumulative total shareholder returns for our common stock as compared with the cumulative total shareholder return for the S&P 500 Composite Index and a group of peer insurance broker and agency companies (Aon plc, Arthur J. Gallagher & Co, Marsh & McLennan Companies, and Willis Towers Watson Public Limited Company).
The following graph is a comparison of five-year cumulative total shareholder returns for our common stock as compared with the cumulative total shareholder return for the S&P 500 Composite Index and a group of peer insurance broker and agency companies (Aon plc, Arthur J. Gallagher & Co, Marsh & McLennan Companies, and Willis Towers Watson Public Limited Company).
These purchases may be carried out through open market purchases, block trades, accelerated share repurchase plans of up to $100 million each (unless otherwise approved by the board of directors), negotiated private transactions or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Exchange Act.
These purchases may be carried out through open-market purchases, block trades, accelerated share repurchase plans of up to $250 million each (unless otherwise approved by the board of directors), negotiated private transactions or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Exchange Act.
The returns of each company have been weighted according to such companies’ respective stock market capitalizations as of December 31, 2019 for the purposes of arriving at a peer group average.
The returns of each company have been weighted according to such companies’ respective stock market capitalizations as of December 31, 2020 for the purposes of arriving at a peer group average.
The following table presents information with respect to our purchases of our common stock during the three months ended December 31, 2024.
The following table presents information with respect to our purchases of our common stock during the three months ended December 31, 2025.
On July 18, 2014, the Company’s board of directors authorized the repurchase of up to $200 million of its shares of common stock, and on July 20, 2015, the Company’s board of directors authorized the repurchase of up to an additional $400 million of the Company’s outstanding common stock.
On July 18, 2014, the board of directors authorized the repurchase of up to $200 million of its shares of common stock, on July 20, 2015, the board of directors authorized the repurchase of up to an additional $400 million of the Company’s outstanding common stock, and on May 1, 2019, the board of directors approved an additional repurchase authorization amount of $373 million.
ITEM 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities. Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “BRO”. On February 10, 2025, there were 285,931,978 shares of our common stock outstanding, held by approximately 1,616 shareholders of record.
ITEM 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities. Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “BRO”. On February 10, 2026, there were 340,420,023 shares of our common stock outstanding, held by approximately 2,446 shareholders of record.
Issuer Purchases of Equity Securities Under the authorizations from the Company’s board of directors, shares may be purchased from time to time, at the Company’s discretion and subject to the availability of stock, market conditions, the trading price of the stock, alternative uses for capital, the Company’s financial performance and other potential factors.
The issuance was made in reliance upon the following exemptions of exclusions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”): Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act Issuer Purchases of Equity Securities Under the authorizations from the Company’s board of directors, shares may be purchased from time to time, at the Company’s discretion and subject to the availability of stock, market conditions, the trading price of the stock, alternative uses for capital, the Company’s financial performance and other potential factors.
At December 31, 2024, the remaining amount authorized by our board of directors for share repurchases was $249 million. Under the authorized repurchase programs, the Company has repurchased approximately 20 million shares for an aggregate cost of approximately $748 million between 2014 and 2024.
Under the authorized repurchase programs, the Company has repurchased approximately 21 million shares for an aggregate cost of approximately $848 million between 2014 and 2025.
The total return calculations are based upon an assumed $100.00 investment on December 31, 2019, with all dividends reinvested. 12/19 12/20 12/21 12/22 12/23 12/24 Brown & Brown, Inc. 100.00 121.06 180.74 147.51 185.46 267.65 S&P 500 Composite 100.00 116.26 147.52 118.84 147.64 182.05 Peer Group 100.00 111.92 158.48 163.08 182.06 222.31 26 27
The total return calculations are based upon an assumed $100.00 investment on December 31, 2020, with all dividends reinvested. 12/20 12/21 12/22 12/23 12/24 12/25 Brown & Brown, Inc. 100.00 149.30 121.85 153.20 221.09 173.84 S&P 500 Composite Index 100.00 126.89 102.22 126.99 156.59 182.25 Peer Group 100.00 141.36 144.83 160.05 195.36 183.72 29
On May 1, 2019, the board of directors approved an additional repurchase authorization amount of $373 million to bring the total available share repurchase authorization at that time to approximately $500 million. During 2024, the Company did not repurchase any of its shares.
On October 22, 2025, the board of directors approved an additional $1,251 million increase to our existing share repurchase authorization, bringing the total remaining repurchase capacity at that time to approximately $1,500 million of the Company's outstanding common stock.
Added
Issuances of Unregistered Securities As partial consideration for the acquisition of Poulton Associates, LLC on November 1, 2025, the Company issued 271,532 shares to the equityholders.
Added
During 2025, the Company repurchased 1,255,970 shares at an average price per share of $79.62 for a total cost of $100 million. At December 31, 2025, the remaining amount authorized by the board of directors for share repurchases was $1,400 million.
Added
In addition, during 2025, 378,873 shares were withheld for taxes in connection with vesting of restricted stock awards and restricted stock units under our 2019 Stock Incentive Plan, and 6,947 shares were acquired by the Company in satisfaction of a legal settlement with a former employee of the Company.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

105 edited+47 added−32 removed51 unchanged
Biggest changeDefinitions Related to Certain Components of Non-GAAP Measures • “Acquisition/Integration Costs” means the acquisition and integration costs (e.g., costs associated with regulatory filings, legal/accounting services, due diligence and the costs of integrating our information technology systems) arising out of our acquisitions of GRP (Jersey) Holdco Limited and its business, Orchid Underwriters Agency and CrossCover Insurance Services, and BdB Limited companies, which are not considered to be normal, recurring or part of the ongoing operations. 30 • “Foreign Currency Translation” means the period-over-period impact of foreign currency translation, which is calculated by applying current-year foreign exchange rates to the various functional currencies in our business to our reporting currency of U.S. dollars for the same period in the prior year. • “1Q23 Nonrecurring Cost” means approximately $11.0 million expensed and substantially paid in the first quarter of 2023 to resolve a business matter, which is not considered to be normal, recurring or part of the ongoing operations. • “(Gain)/loss on disposal” is a caption on our consolidated statements of income which reflects net proceeds received as compared to net book value related to sales of books of business and other divestiture transactions, such as the disposal of a business through sale or closure.
Biggest changeDefinitions Related to Certain Components of Non-GAAP Measures • “Acquisition/Integration Costs” means the acquisition and integration costs (e.g., costs associated with regulatory filings; costs for third-party professional services, including legal, accounting, consulting, financial advisory and due diligence; costs and fees associated with entry into the bridge financing commitment; costs of integrating or streamlining processes and information technology systems, including data migration and system integration; costs associated with optimizing vendor agreements and leased office space, including exit costs related to location combinations; and employment-related costs, including severance payments, costs associated with the transition of certain legacy compensation programs, retention-related compensation expenses, and incentive payments) arising out of our acquisition of Accession and acquisitions previously completed by Accession, which are not considered to be normal, recurring or part of ongoing operations. • “Foreign Currency Translation” means the period-over-period impact of foreign currency translation, which is calculated by applying current-year foreign exchange rates to the various functional currencies in our business to our reporting currency of U.S. dollars for the same period in the prior year. 32 • “(Gain)/loss on disposal” is a caption on our consolidated statements of income which reflects net proceeds received as compared to the net book value related to sales of books of business and other divestiture transactions. • “Mark-to-market of escrow liability” is a caption on our consolidated statements of income which reflects the non-cash change in the fair value associated with certain shares of the Company’s common stock held in escrow.
For example, higher levels of inflation, an increase the value of insurable exposure units, or a general decline in economic activity, could increase or decrease the value of insurable exposure units. Conversely, increasing costs of litigation settlements and awards could cause some customers to seek higher levels of insurance coverage.
For example, higher levels of inflation, an increase in the value of insurable exposure units or a general decline in economic activity, could increase or decrease the value of insurable exposure units. Conversely, increasing costs of litigation settlements and awards could cause some customers to seek higher levels of insurance coverage.
Critical Accounting Policies Our Consolidated Financial Statements are prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses.
Critical Accounting Policies and Estimates Our Consolidated Financial Statements are prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses.
Purchased customer accounts include the right to represent insureds or claimants supported by the physical records and files obtained from acquired businesses that contain information about insurance policies, customers and other matters essential to policy renewals of delivery of services.
Purchased customer accounts include the right to represent insureds or claimants supported by the physical records and files obtained from acquired businesses that contain information about insurance policies, customers and other matters essential to policy renewals and delivery of services.
Changes in depreciation expense reflect net additions of fixed assets resulting from businesses acquired in the past twelve months and the addition of fixed assets resulting from business initiatives, partially offset by the impact of fixed assets that became fully depreciated or written off in the gain or loss on disposal.
Changes in depreciation expense reflect net additions of fixed assets resulting from businesses acquired in the past twelve months and the addition of fixed assets resulting from business initiatives, partially offset by the impact of fixed assets that became fully depreciated or written off in the (gain)/loss on disposal.
Historically, investment income has consisted primarily of interest earnings on operating cash and where permitted, on premiums collected and held in a fiduciary capacity before being remitted to insurance companies. Our policy as it relates to the Company’s capital is to invest available funds in high-quality, short-term money-market funds and fixed income investment securities.
Historically, investment and other income has consisted primarily of interest earnings on operating cash and where permitted, on premiums collected and held in a fiduciary capacity before being remitted to insurance companies. Our policy as it relates to the Company’s capital is to invest available funds in high-quality, short-term money-market funds and fixed income investment securities.
Subsequent changes in these earn-out obligations are required to be recorded in the Consolidated Statements of Income when incurred or reasonably estimated. Estimations of 35 potential earn-out obligations are typically based upon future earnings of the acquired operations or entities, usually for periods ranging from one to three years.
Subsequent changes in these earn-out obligations are required to be recorded in the Consolidated Statements of Income when incurred or reasonably estimated. Estimations of potential earn-out obligations are typically based upon future earnings of the acquired operations or entities, usually for periods ranging from one to three years.
Consistent with Regulation G, a description of such information is provided below and tabular reconciliations of this supplemental non-GAAP financial information to our most comparable GAAP information are contained in this Annual Report on Form 10-K under “Results of Operations - Segment Information.” We view Organic Revenue and Organic Revenue growth as important indicators when assessing and evaluating our performance on a consolidated basis and for each of our three segments, because they allow us to determine a comparable, but non-GAAP, measurement of revenue growth that is associated with the revenue sources that were a part of our business in both the current and prior year, and that are expected to continue in the future.
Consistent with Regulation G, a description of such information is provided below and tabular reconciliations of this supplemental non-GAAP financial information to our most comparable GAAP information are contained in this Annual Report on Form 10-K under “Results of Operations - Segment Information.” We view Organic Revenue and Organic Revenue growth as important indicators when assessing and evaluating our performance on a consolidated basis and for each of our two segments, because they allow us to determine a comparable, but non-GAAP, measurement of revenue growth that is associated with the revenue sources that were a part of our business in both the current and prior year and that are expected to continue in the future.
The Company repaid $100 million thereafter, leaving an outstanding balance of $250 million on the Revolving Credit Facility as of December 31, 2024. On June 11, 2024, the Company completed the issuance of $600 million aggregate principal amount of 5.650% senior notes due 2034 (the “2034 Senior Notes”).
The Company repaid $100 million thereafter, leaving an outstanding balance of $250 million on the Revolving Credit Facility as of December 31, 2024. 45 On June 11, 2024, the Company completed the issuance of $600 million aggregate principal amount of 5.650% senior notes due 2034 (the “2034 Senior Notes”).
During the twelve months ended December 31, 2024, the Company repaid $25 million of principal related to the Second Amended and Restated Credit Agreement term loan through the quarterly scheduled principal payments. The Second Amended and Restated Credit 43 Agreement term loan had an outstanding balance of $194 million as of December 31, 2024.
During the twelve months ended December 31, 2024, the Company repaid $25 million of principal related to the Second Amended and Restated Credit Agreement term loan through the quarterly scheduled principal payments. The Second Amended and Restated Credit Agreement term loan had an outstanding balance of $194 million as of December 31, 2024.
Operating Cash Flows Our operating cash flows are primarily derived from the net income generated during the period adjusted for non-cash expenses, which include depreciation, amortization, changes in estimated earnout payables, non-cash stock based compensation and deferred income taxes while excluding gains and losses on sales/disposals of investments, businesses, fixed assets and customer accounts, payments on acquisition earn-outs in excess of original estimated payables and changes in working capital which relate primarily to the timing of payments of accrued liabilities and receipts of receivables from commissions and fees related to our revenues.
Operating Cash Flows Our operating cash flows are primarily derived from the net income generated during the period adjusted for non-cash expenses, which include depreciation, amortization, changes in estimated earnout payables, mark-to-market of escrow liability, non-cash stock-based compensation and deferred income taxes while excluding gains and losses on sales/disposals of investments, businesses, fixed assets and customer accounts, payments on acquisition earn-outs in excess of original estimated payables and changes in working capital which relate primarily to the timing of payments of accrued liabilities and receipts of receivables from commissions and fees related to our revenues.
Any of the following factors, if present, may trigger an impairment review: (i) a significant underperformance relative to historical or projected future operating results, (ii) a significant negative industry or economic trend, and (iii) a significant decline in our market capitalization.
Any of the following factors are examples, that if present, may trigger an impairment review: (i) a significant underperformance relative to historical or projected future operating results, (ii) a significant negative industry or economic trend, and (iii) a significant decline in our market capitalization.
New developments or changes in settlement strategy in dealing with these matters may significantly affect the required reserves and affect our net income. 33 RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 The following discussion and analysis regarding results of operations and liquidity and capital resources should be considered in conjunction with the accompanying Consolidated Financial Statements and related Notes.
New developments or changes in settlement strategy in dealing with these matters may significantly affect the required reserves and affect our net income. 35 RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 The following discussion and analysis regarding results of operations and liquidity and capital resources should be considered in conjunction with the accompanying Consolidated Financial Statements and related Notes.
This supplemental non-GAAP financial information should be considered in addition to, and not in lieu of, the Company ' s Consolidated Financial Statements. Acquisitions Part of our business strategy is to attract high-quality insurance intermediaries and service organizations to join our operations. From 1993 through the fourth quarter of 2024, we acquired 676 insurance intermediary operations.
This supplemental non-GAAP financial information should be considered in addition to, and not in lieu of, the Company ' s Consolidated Financial Statements. Acquisitions Part of our business strategy is to attract high-quality insurance intermediaries and service organizations to join our operations. From 1993 through the fourth quarter of 2025, we acquired 717 insurance intermediary operations.
We have the ability to utilize our Revolving Credit Facility, which as of December 31, 2024 provided capacity for up to $550 million in additional available cash. We believe that we have access to additional funds, if needed, through the capital markets or private placements to obtain further debt financing under the current market conditions.
We have the ability to utilize our Revolving Credit Facility, which as of December 31, 2025 provided capacity for up to $700 million in additional available cash. We believe that we have access to additional funds, if needed, through the capital markets or private placements to obtain further debt financing under the current market conditions.
Insurance companies establish these premium rates based upon many factors, including loss experience, risk profile and reinsurance rates paid by such insurance companies, none of which we control. We also participate in capitalized captive insurance facilities (the "Captives") for the purpose of having additional capacity to place coverage, drive additional revenues and to participate in underwriting results.
Insurance companies establish these premium rates based upon many factors, including loss experience, risk profile and reinsurance rates paid by such insurance companies, none of which we control. We also participate in captive insurance facilities for the purpose of having additional capacity to place coverage, driving additional revenues and to participate in underwriting results.
At December 31, 2024, the Company had approximately $172 million of cash and cash equivalents outside of the U.S. From time to time, the Company will evaluate the repatriation of available funds from our non-U.S. operating subsidiaries or permanently reinvest a portion of those funds in those various territories.
At December 31, 2025, the Company had approximately $228 million of cash and cash equivalents outside of the U.S. From time to time, the Company will evaluate the repatriation of available funds from our non-U.S. operating subsidiaries or permanently reinvest a portion of those funds in those various territories.
Fee revenues are generated by: (i) our Programs and Wholesale Brokerage segments, which earn fees primarily for the issuance of insurance policies on behalf of insurance carriers and (ii) our Retail segment in our large-account customer base, where we primarily earn fees for securing insurance for our customers, in our F&I businesses where we earn fees for assisting our customers with creating and selling warranty and service risk management programs and fees for Medicare Set-aside services, Social Security disability services and Medicare benefits advocacy services.
Fee revenues are generated by: (i) our Specialty Distribution segment, which earns fees primarily for the issuance of insurance policies on behalf of insurance carriers and (ii) our Retail segment in our large-account customer base, where we primarily earn fees for securing insurance for our customers, in our F&I businesses where we earn fees for assisting our customers with creating and selling warranty and service risk management programs, and fees for Medicare Set-aside services, Social Security disability services and Medicare benefits advocacy services.
For a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2023 and 2022, see Part II, Item 7 of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 22, 2024.
For a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2024 and 2023, see Part II, Item 7 of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 13, 2025.
The Company entered into an amended and restated credit agreement (the “Second Amended and Restated Credit Agreement”) with the lenders named therein, JPMorgan Chase Bank, N.A. as administrative agent, Bank of America, N.A., Truist Bank and BMO Harris Bank N.A. as co-syndication agents, and U.S.
On October 27, 2021, the Company entered into an amended and restated credit agreement (the “Second Amended and Restated Credit Agreement”) with the lenders named therein, JPMorgan Chase Bank, N.A. as administrative agent, Bank of America, N.A., Truist Bank and BMO Harris Bank N.A. as co-syndication agents, and U.S.
Over the last three years, profit-sharing contingent commissions have averaged approximately 3.6% of commissions and fees revenue. Fee revenues primarily relate to services other than securing coverage for our customers, and for fees negotiated in lieu of commissions.
Over the last three years, profit-sharing contingent commissions have averaged approximately 4.4% of commissions and fees. Fee revenues primarily relate to services other than securing coverage for our customers, and for fees negotiated in lieu of commissions.
The net change in fiduciary cash is represented by the net change in fiduciary liabilities and fiduciary receivables and is presented as cash flows from financing activities in the statement of cash flows. Financing cash flows reflect an increase of $191 million and $189 million in 2024 and 2023, respectively, related to fiduciary receivables and liabilities.
The net change in fiduciary cash is represented by the net change in fiduciary liabilities and fiduciary receivables and is presented as cash flows from financing activities in the statement of cash flows. Financing cash flows reflect an increase of $53 million and $191 million in 2025 and 2024, respectively, related to fiduciary receivables and liabilities.
In addition, see “Information Regarding Non-GAAP Financial Measures” below regarding important information on non-GAAP financial measures contained in our discussion and analysis. We are a diversified insurance agency, wholesale brokerage, insurance programs and services headquartered in Daytona Beach, Florida.
In addition, see “Information Regarding Non-GAAP Financial Measures” below regarding important information on non-GAAP financial measures contained in our discussion and analysis. We are a diversified insurance agency, wholesale brokerage, insurance programs, specialty insurance business and service organization headquartered in Daytona Beach, Florida.
The resulting net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the years ended December 31, 2024 and 2023 were as follows: (in millions) 2024 2023 Change in fair value of estimated acquisition earn-out payables $ (6 ) $ 14 Interest expense accretion 8 7 Net change in earnings from estimated acquisition earn-out payables $ 2 $ 21 For the years ended December 31, 2024 and 2023, the fair value of estimated earn-out payables was reevaluated and decreased by $6 million for 2024 and increased by $14 million for 2023, which are credits and charges, exclusive of interest expense accretion, to the Consolidated Statements of Income for 2024 and 2023.
The resulting net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the years ended December 31, 2025 and 2024 were as follows: (in millions) 2025 2024 Change in fair value $ 16 $ (6 ) Interest expense accretion 9 8 Net change in earnings from estimated acquisition earn-out payables $ 25 $ 2 For the years ended December 31, 2025 and 2024, the fair value of estimated earn-out payables was reevaluated and increased by $16 million for 2025 and decreased by $6 million for 2024, which are charges and credits, exclusive of interest expense accretion, to the Consolidated Statements of Income for 2025 and 2024.
Capital Expenditures Capital expenditures amounted to $82 million and $69 million in 2024 and 2023, respectively, and included purchases of furniture and fixtures, leasehold improvements related to office moves and hardware and software purchases related to information technology investments.
Capital Expenditures Capital expenditures amounted to $68 million and $82 million in 2025 and 2024, respectively, and included purchases of furniture and fixtures, leasehold improvements related to office moves and hardware and software purchases related to information technology investments.
RESULTS OF OPERATIONS — SEGMENT INFORMATION As discussed in Note 15 “Segment Information” of the Notes to Consolidated Financial Statements, we operate three reportable segments: Retail, Programs and Wholesale Brokerage. On a segmented basis, changes in amortization, depreciation and interest expenses generally result from activity associated with acquisitions.
RESULTS OF OPERATIONS — SEGMENT INFORMATION As discussed in Note 15 “Segment Information” of the Notes to Consolidated Financial Statements, we operate two reportable segments: Retail and Specialty Distribution. On a segmented basis, changes in amortization, depreciation and interest expenses generally result from activity associated with acquisitions.
Our ratio of current assets to current liabilities (the “current ratio”) was 1.10 and 1.04 for December 31, 2024 and December 31, 2023, respectively. Cash flows generated from operating activities totaled $1,174 million and $1,010 million for the years ended December 31, 2024 and 2023, respectively, representing an increase of $164 million, 16.2%.
Our ratio of current assets to current liabilities (the “current ratio”) was 1.04 and 1.10 for December 31, 2025 and December 31, 2024, respectively. Cash flows generated from operating activities totaled $1,450 million and $1,174 million for the years ended December 31, 2025 and 2024, respectively, representing an increase of $276 million.
The $223 million increase in core commissions and fees was driven by the following: (i) approximately $81 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2023; (ii) an increase of $143 million related to net new and renewal business; (iii) an increase from the impact of Foreign Currency Translation of $8 million; and (iv) an offsetting decrease of $6 million related to commissions and fees recorded in 2023 from businesses since divested.
The $638 million increase in core commissions and fees was driven by the following: (i) approximately $559 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2024; (ii) an increase of $74 million related to net new and renewal business; (iii) an increase from the impact of Foreign Currency Translation of $14 million; and (iv) an offsetting decrease of $11 million related to commissions and fees recorded in 2024 from businesses since divested.
During the 12 months ended December 31, 2023, the Company repaid $15 million of principal related to the Second Amended and Restated Credit Agreement term loan through the quarterly scheduled principal payments. The Second Amended and Restated Credit Agreement term loan had an outstanding balance of $219 million as of December 31, 2023.
During the twelve months ended December 31, 2025, the Company repaid $25 million of principal related to the Second Amended and Restated Credit Agreement term loan through the quarterly scheduled principal payments. The Second Amended and Restated Credit Agreement term loan had an outstanding balance of $169 million as of December 31, 2025.
Amortization Amortization expense for 2024 increased $12 million to $178 million, or 7.2% over 2023. This change reflects the amortization of new intangibles from businesses acquired within the past twelve months, net of certain intangible assets becoming fully amortized or written off in the (Gain)/Loss on disposal.
Amortization Amortization expense for 2025 increased $134 million to $312 million, or 75.3% over 2024. This change reflects the amortization of new intangibles from businesses acquired within the past twelve months, net of certain intangible assets becoming fully amortized or written off in the (gain)/loss on disposal.
These measures of operating performance may not be otherwise apparent on a GAAP basis due to the impact of certain items that have a high degree of variability, that we believe are not indicative of ongoing performance and that are not easily comparable from period to period.
We believe they provide additional meaningful methods to evaluate the Company’s operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis due to the impact of certain items that have a high degree of variability, that we believe are not indicative of ongoing performance and that are not easily comparable from period to period.
In most cases, the insurance carriers that support these programs have delegated underwriting and, in many instances, claims-handling authority to our programs operations. These programs are generally distributed through a global network of independent agents and Brown & Brown retail agents, and offer targeted products and services designed for specific industries, trade groups, professions, public entities and market niches.
In most cases, the insurance carriers that support these programs have delegated underwriting and, in many instances, claims-handling authority These programs are generally distributed through a global network of independent agents and brokers, including Brown & Brown retail agents, and offer targeted products and services designed for businesses, individuals, specific industries, trade groups, professions, public entities, municipalities, and niche markets.
Core commissions and fees in 2024 increased $470 million, composed of (i) approximately $415 million of net new and renewal business, which reflects an Organic Revenue growth rate of 10.4%; (ii) $146 million from acquisitions that had no comparable revenues in the same period of 2023; (iii) an increase from the impact of Foreign Currency Translation of $10 million and (iv) an offsetting decrease of $101 million related to commissions and fees revenue from businesses or books of business divested in the preceding twelve months.
Core commissions and fees in 2025 increased $969 million, composed of: (i) approximately $126 million of net new and renewal business, which reflects an Organic Revenue growth rate of 2.8%; (ii) $836 million from acquisitions that had no comparable revenues in the same period of 2024; (iii) an increase from the impact of Foreign Currency Translation of $18 million and (iv) an offsetting decrease of $11 million related to commissions and fees revenue from businesses or books of business divested in the preceding twelve months.
Non-GAAP Earnings Measures • EBITDAC is defined as income before interest, income taxes, depreciation, amortization and the change in estimated acquisition earn-out payables. • EBITDAC Margin is defined as EBITDAC divided by total revenues. • EBITDAC - Adjusted is defined as EBITDAC, excluding (i) (gain)/loss on disposal, (ii) for 2022 and 2023, Acquisition/Integration Costs (as defined below) and (iii) for 2023, the 1Q23 Nonrecurring Cost (as defined below). • EBITDAC Margin - Adjusted is defined as EBITDAC - Adjusted divided by total revenues.
Non-GAAP Earnings Measures • EBITDAC is defined as income before interest, income taxes, depreciation, amortization and the change in estimated acquisition earn-out payables. • EBITDAC Margin is defined as EBITDAC divided by total revenues. • EBITDAC - Adjusted is defined as EBITDAC, excluding (i) (gain)/loss on disposal (as defined below), (ii) Acquisition/Integration Costs (as defined below) and (iii) mark-to-market of escrow liability (as defined below). • EBITDAC Margin - Adjusted is defined as EBITDAC - Adjusted divided by total revenues.
This segment also operates a write-your-own flood insurance carrier, WNFIC and participates in two Captives. WNFIC’s underwriting business consists of policies written on behalf of and fully ceded to the NFIP, as well as excess flood policies, which are fully reinsured in the private market.
This division also operates our write-your-own flood insurance carrier, WNFIC and participates in a quota share captive and an excess of loss layer captive. WNFIC’s underwriting business consists of policies written on behalf of and fully ceded to the NFIP, as well as excess flood policies, which are fully reinsured in the private market.
Net cash paid for acquisitions increased $259 million in 2024, up from $631 million in 2023. Dispositions The Company received cash proceeds from the sale of businesses, fixed assets and customer accounts totaling $70 million and $107 million in 2024 and 2023, respectively.
Net cash paid for acquisitions increased $6,964 million in 2025, up from $890 million in 2024. Dispositions The Company received cash proceeds from the sale of businesses, fixed assets and customer accounts totaling $9 million and $70 million in 2025 and 2024, respectively.
This increase included $69 million of compensation costs related to stand-alone acquisitions that had no comparable costs in the same period of 2023. Therefore, employee compensation and benefits expense attributable to those offices that existed in the same time periods of 2024 and 2023 increased by $150 million, or 6.9%.
This increase included $448 million of compensation costs related to acquisitions that had no comparable costs in the same period of 2024. Therefore, employee compensation and benefits expense attributable to those offices that existed in the same time periods of 2025 and 2024 increased by $81 million.
Operating cash flows generated in 2024 included $1,002 million from net income before non-controlling interests with $277 million of non-cash adjustments, offset by $105 million from changes in working capital.
Operating cash flows generated in 2025 included $1,067 million from net income before non-controlling interests with $430 million of non-cash adjustments, offset by $47 million from changes in working capital.
Other Operating Expenses Other operating expenses represented 14.8% of total revenues for 2024 as compared to 15.3% for the year ended December 31, 2023. Other operating expenses for 2024 increased $60 million, or 9.2%, from the same period of 2023.
Other Operating Expenses Other operating expenses represented 16.2% of total revenues for 2025 as compared to 14.8% for the year ended December 31, 2024. Other operating expenses for 2025 increased $249 million, or 35.1%, from the same period of 2024.
On January 22, 2025, the board of directors approved a quarterly cash dividend of $0.15 per share to be paid on February 12, 2025. Debt Net proceeds from long term debt totaled $25 million in 2024, compared to net cash used of $151 million in 2023.
On January 21, 2026, the board of directors approved a quarterly cash dividend of $0.165 per share to be paid on February 11, 2026. Debt Net proceeds from long-term debt totaled $3,781 million in 2025, compared to net proceeds of $25 million in 2024.
The Term A-2 Loans had an outstanding balance of $412 million as of December 31, 2024. The Company’s next scheduled principal payment of $13 million is due in March 2025. During the twelve months ended December 31, 2024, the Company repaid $150 million of principal related to the Term Loans issued under the Term A-1 Loan Commitment (“Term A-1 Loans”).
During the twelve months ended December 31, 2024, the Company repaid $150 million of principal related to the Term Loans issued under the Term A-1 Loan Commitment (“Term A-1 Loans”). The Term A-1 Loans had an outstanding balance of $150 million as of December 31, 2024.
The $59 million increase in core commissions and fees was driven by the following: (i) $48 million related to net new and renewal business; (ii) $10 million related to core commissions and fees revenue from acquisitions and dispositions that had no comparable revenues in the same period of 2023; and (iii) an increase from the impact of Foreign Currency Translation of $1 million.
The $333 million increase in core commissions and fees revenue was driven by: (i) approximately $277 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2024; (ii) approximately $52 million of net new business, renewal business and fee revenues; and (iii) an increase from the impact of Foreign Currency Translation of $4 million.
Fee revenues as a percentage of our total commissions and fees, represented 21.1% in 2024 and 23.9% in 2023. For the year ended December 31, 2024, our commissions and fees growth rate was 12.1% and our consolidated Organic Revenue growth rate was 10.4%.
Fee revenues as a percentage of our total commissions and fees, represented 22.2% in 2025 and 21.1% in 2024. For the year ended December 31, 2025, our commissions and fees growth rate was 22.5% and our consolidated Organic Revenue growth rate was 2.8%.
As of December 31, 2023, the estimated acquisition earn-out payables equaled $249 million, of which $146 million was recorded as accounts payable and $103 million was recorded as other non-current liabilities. Income Taxes The effective tax rate on income from operations was 23.1% in 2024 and 24.1% in 2023.
As of December 31, 2024, the estimated acquisition earn-out payables were $167 million, of which $75 million was recorded as accounts payable and $92 million was recorded as other non-current liabilities. Income Taxes The effective tax rate on income from operations was 22.2% in 2025 and 23.1% in 2024.
The Captives provide additional underwriting capacity that enable growth in core commissions and fees, and allow us to participate in underwriting results with limited exposure to claims expenses. The Company has traditionally participated in underwriting profits through profit-sharing contingent commissions. These Captives give us another way to continue to participate in underwriting results while limiting exposure to claims expenses.
Arrowhead Programs' and Arrowhead Specialty's captives businesses provide additional underwriting capacity that enables growth in core commissions and fees and allow us to participate in underwriting results with limited exposure to claims expenses. The Company has traditionally participated in underwriting profits through profit-sharing contingent commissions.
Profit-sharing contingent commissions for 2024 increased by $36 million, or 27.7%, compared to the same period in 2023. This increase was driven primarily by (i) improved underwriting results, overall growth of the business, as well as qualifying for certain profit-sharing contingent commissions that we did not qualify for in the prior year and (ii) recent acquisitions.
Profit-sharing contingent commissions for 2025 increased by $89 million, or 53.6%, compared to the same period in 2024. This increase was driven primarily by (i) improved underwriting results, increased premium volume and qualifying for certain profit-sharing contingent commissions that we did not qualify for in the prior year and (ii) recent acquisitions.
During the 12 months ended December 31, 2023, the Company repaid $25 million of principal related to the Term Loans issued under the Term A-2 Loans through quarterly scheduled principal payments. The Term A-2 Loans had an outstanding balance of $456 million as of December 31, 2023.
During the twelve months ended December 31, 2024, the Company repaid $44 million of principal related to the Term Loans issued under the Term A-2 Loan Commitment (“Term A-2 Loans”) through quarterly scheduled principal payments. The Term A-2 Loans had an outstanding balance of $412 million as of December 31, 2024.
During the nine months ended September 30, 2024, the Company repaid $250 million of the outstanding balance on the Revolving Credit Facility. On October 23, 2024, the Company drew down on the Revolving Credit Facility by $350 million in connection with the acquisition of Quintes Holding B.V.
On October 23, 2024, the Company drew down on the Revolving Credit Facility by $350 million in connection with the acquisition of Quintes Holding B.V.
The reconciliation of total commissions and fees included in the Consolidated Statements of Income to Organic Revenue, a non-GAAP financial measure, including by segment, and the growth rates for Organic Revenue for the year ended December 31, 2024 are as follows: 2024 Retail (1) Programs Wholesale Brokerage Total (in millions) 2024 2023 2024 2023 2024 2023 2024 2023 Commissions and fees $ 2,720 $ 2,500 $ 1,375 $ 1,160 $ 610 $ 539 $ 4,705 $ 4,199 Total change $ 220 $ 215 $ 71 $ 506 Total growth % 8.8 % 18.5 % 13.2 % 12.1 % Profit-sharing contingent commissions (44 ) (50 ) (95 ) (65 ) (27 ) (15 ) (166 ) (130 ) Core commissions and fees $ 2,676 $ 2,450 $ 1,280 $ 1,095 $ 583 $ 524 $ 4,539 $ 4,069 Acquisitions revenues (81 ) — (57 ) — (8 ) — (146 ) — Dispositions — (6 ) — (97 ) — 2 — (101 ) Foreign currency translation — 8 — 1 — 1 — 10 Organic Revenue (2) $ 2,595 $ 2,452 $ 1,223 $ 999 $ 575 $ 527 $ 4,393 $ 3,978 Organic Revenue growth (2) $ 143 $ 224 $ 48 $ 415 Organic Revenue growth rate (2) 5.8 % 22.4 % 9.1 % 10.4 % (1) The Retail segment includes commissions and fees reported as “Other” in the Segment Information table in Note 15 of the Notes to the Consolidated Financial Statements, which includes corporate and consolidation items.
(2) A non-GAAP financial measure. 38 The reconciliation of total commissions and fees included in the Consolidated Statements of Income to Organic Revenue, a non-GAAP financial measure, including by segment, and the growth rates for Organic Revenue for the year ended December 31, 2024, by segment, are as follows: 2024 Retail (1) Specialty Distribution Total (in millions) 2024 2023 2024 2023 2024 2023 Commissions and fees $ 2,720 $ 2,500 $ 1,985 $ 1,699 $ 4,705 $ 4,199 Total change $ 220 $ 286 $ 506 Total growth % 8.8 % 16.8 % 12.1 % Profit-sharing contingent commissions (44 ) (50 ) (122 ) (80 ) (166 ) (130 ) Core commissions and fees $ 2,676 $ 2,450 $ 1,863 $ 1,619 $ 4,539 $ 4,069 Acquisitions (81 ) (65 ) (146 ) Dispositions (6 ) (95 ) (101 ) Foreign currency translation 8 2 10 Organic Revenue (2) $ 2,595 $ 2,452 $ 1,798 $ 1,526 $ 4,393 $ 3,978 Organic Revenue growth (2) $ 143 $ 272 $ 415 Organic Revenue growth rate (2) 5.8 % 17.8 % 10.4 % (1) The Retail segment includes commissions and fees reported as “Other” in the Segment Information table in Note 15 of the Notes to the Consolidated Financial Statements, which includes corporate and consolidation items.
Financial information relating to our Retail segment for the 12 months ended December 31, 2024 and 2023 is as follows: (in millions, except percentages) 2024 % Change 2023 REVENUES Core commissions and fees $ 2,676 9.1 % $ 2,453 Profit-sharing contingent commissions 44 (12.0 )% 50 Investment income 6 NMF 1 Other income, net 3 (25.0 )% 4 Total revenues 2,729 8.8 % 2,508 EXPENSES Employee compensation and benefits 1,462 9.4 % 1,336 Other operating expenses 449 6.7 % 421 (Gain)/loss on disposal (3 ) — (3 ) Amortization 119 6.3 % 112 Depreciation 21 10.5 % 19 Interest 71 (16.5 )% 85 Change in estimated acquisition earn-out payables 8 NMF 1 Total expenses 2,127 7.9 % 1,971 Income before income taxes $ 602 12.1 % $ 537 Income Before Income Taxes Margin (1) 22.1 % 21.4 % EBITDAC - Adjusted (2) $ 818 7.5 % $ 761 EBITDAC Margin - Adjusted (2) 30.0 % 30.3 % Organic Revenue growth rate (2) 5.8 % 7.4 % Employee compensation and benefits relative to total revenues 53.6 % 53.3 % Other operating expenses relative to total revenues 16.5 % 16.8 % Capital expenditures $ 48 4.3 % $ 46 Total assets at December 31 $ 9,389 8.4 % $ 8,658 (1) “Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues (2) A non-GAAP financial measure NMF = Not a meaningful figure The Retail segment’s total revenues in 2024 increased 8.8%, or $221 million, over 2023, to $2,729 million.
Financial information relating to our Retail segment for the 12 months ended December 31, 2025 and 2024 is as follows: (in millions, except percentages) 2025 % Change 2024 REVENUES Core commissions and fees $ 3,314 23.8 % $ 2,676 Profit-sharing contingent commissions 72 63.6 % 44 Investment and other income 20 122.2 % 9 Total revenues 3,406 24.8 % 2,729 EXPENSES Employee compensation and benefits 1,848 26.4 % 1,462 Other operating expenses 563 25.4 % 449 (Gain)/loss on disposal 2 (166.7 )% (3 ) Amortization 219 84.0 % 119 Depreciation 31 47.6 % 21 Interest 28 (60.6 )% 71 Change in estimated acquisition earn-out payables 8 — 8 Total expenses 2,699 26.9 % 2,127 Income before income taxes $ 707 17.4 % $ 602 Income Before Income Taxes Margin (1) 20.8 % 22.1 % EBITDAC - Adjusted (2) $ 1,022 24.9 % $ 818 EBITDAC Margin - Adjusted (2) 30.0 % 30.0 % Organic Revenue growth rate (2) 2.8 % 5.8 % Employee compensation and benefits relative to total revenues 54.3 % 53.6 % Other operating expenses relative to total revenues 16.5 % 16.5 % (1) “Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues (2) A non-GAAP financial measure NMF = Not a meaningful figure The Retail segment’s total revenues in 2025 increased 24.8%, or $677 million, over 2024, to $3,406 million.
Acquisition Earn-outs Payments on acquisition earn-outs related to the original acquisition date estimates totaled $117 million and $90 million in 2024 and 2023, respectively. Dividends During 2024 and 2023, the Company paid cash dividends of $154 million and $135 million, respectively, an increase of $19 million, 14.1%.
Acquisition Earn-outs Payments on acquisition earn-outs related to the original acquisition date estimates totaled $143 million and $117 million in 2025 and 2024, respectively. Dividends During 2025 and 2024, the Company paid cash dividends of $193 million and $154 million, respectively, an increase of $39 million, 25.3%.
As disclosed in our most recent proxy statement, we use Organic Revenue growth, and EBITDAC Margin - Adjusted as key performance metrics for our short-term and long-term incentive compensation plans for executive officers and other key employees. Beginning January 1, 2024, we no longer exclude Foreign Currency Translation from the calculation of EBITDAC - Adjusted and EBITDAC Margin - Adjusted.
As disclosed in our most recent proxy statement, we use Organic Revenue growth, and EBITDAC Margin - Adjusted as key performance metrics for our short-term and long-term incentive compensation plans for executive officers and other key employees.
As of December 31, 2024, the estimated acquisition earn-out payables equaled $167 million, of which $75 million was recorded as accounts payable and $92 million was recorded as other non-current liabilities.
As of December 31, 2025, the estimated acquisition earn-out payables were $541 million, of which $281 million was recorded as accounts payable and $260 million was recorded as other non-current liabilities.
If the Company does not perform a qualitative assessment, or as a result of the qualitative assessment, it is not determined that the fair value of the reporting unit more likely than not exceeds the carrying amount, the Company will calculate the fair value of the reporting unit for comparison against the carrying value.
If the Company does not perform a qualitative assessment, or if, as a result of the qualitative assessment, it determines that a quantitative analysis is required, the Company will estimate the fair value of the reporting unit for comparison against the carrying value.
This underlying employee compensation and benefits expense increase was primarily related to: (i) an increase in staff costs attributable to new hires; (ii) an increase in producer compensation associated with revenue growth; (iii) an increase in non-cash stock-based compensation driven by the strong financial performance of the Company and (iv) the year-over-year increase of approximately $21 million in the value of deferred compensation liabilities driven by changes in the market prices of our deferred compensation plan, with such amount substantially offset within other operating expenses as we hold assets to fund these liabilities, partially offset by (v) employee compensation and benefits associated with certain third-party claims administration and adjusting services businesses divested in the fourth quarter of 2023.
This underlying employee compensation and benefits expense increase was primarily related to: (i) an increase in staff costs attributable to new hires; (ii) the increased cost of health insurance; (iii) an increase in producer compensation associated with revenue growth and (iv) the year-over-year increase of approximately $12 million in the value of deferred compensation liabilities driven by changes in the market prices of our deferred compensation plan, with such amount substantially offset within other operating expenses as we hold assets to fund these liabilities.
Additionally, there have been no impairments recorded for amortizable intangible assets for the years ended December 31, 2024 and 2023. Non-Cash Stock-Based Compensation We grant non-vested stock awards to our employees, with the related compensation expense recognized in the financial statements over the associated service period based upon the grant-date fair value of those awards, subject to any performance modification.
Non-Cash Stock-Based Compensation We grant non-vested stock awards to our employees, with the related compensation expense recognized in the financial statements over the associated service period based upon the grant-date fair value of those awards, subject to any performance modification.
Other income primarily reflects other miscellaneous revenues. 29 Income before income taxes for the year ended December 31, 2024, increased by $157 million, or 13.7% over 2023, driven by Organic Revenue growth, increased profit-sharing contingent commissions, leveraging our expense base, net new business, increased investment income, acquisitions completed in the past twelve months and the change in estimated acquisition earn-out payables.
Other income primarily reflects other miscellaneous revenues. 31 Income before income taxes for the year ended December 31, 2025, increased by $68 million, or 5.2% over 2024, driven by Organic Revenue growth, increased profit-sharing contingent commissions, leveraging our expense base, increased investment income, acquisitions completed in the past twelve months and the change in mark-to-market of escrow liability.
Subsequent changes in the fair value of earn-out obligations are recorded in the Consolidated Statement of Income as a result of updated expectations for the performance of the associated business.
The earn-out payables are measured at estimated fair value as of the acquisition date and are included in purchase price consideration. Subsequent changes in the fair value of earn-out obligations are recorded in the Consolidated Statement of Income as a result of updated expectations for the performance of the associated businesses.
As a result of the awarding of these shares, the grantees will be eligible to receive payments of dividends and exercise voting privileges. The awarded shares will be included as issued and outstanding common stock shares and included in the calculation of basic and diluted net income per share.
With respect to time-based-only restricted stock awards, the grantees are eligible to receive payments of dividends and exercise voting privileges from the date of grant, and the awarded shares are included as issued and outstanding common stock shares and included in the calculation of basic and diluted net income per share.
Financial information relating to our Consolidated Financial Results is as follows: (in millions, except percentages) 2024 % Change 2023 REVENUES Core commissions and fees $ 4,539 11.6 % $ 4,069 Profit-sharing contingent commissions 166 27.7 % 130 Investment income 93 78.8 % 52 Other income, net 7 16.7 % 6 Total revenues 4,805 12.9 % 4,257 EXPENSES Employee compensation and benefits 2,406 10.0 % 2,187 Other operating expenses 710 9.2 % 650 Gain on disposal (31 ) (78.3 )% (143 ) Amortization 178 7.2 % 166 Depreciation 44 10.0 % 40 Interest 193 1.6 % 190 Change in estimated acquisition earn-out payables 2 (90.5 )% 21 Total expenses 3,502 12.6 % 3,111 Income before income taxes 1,303 13.7 % 1,146 Income taxes 301 9.5 % 275 Net income before non-controlling interests 1,002 15.0 % 871 Less: Net income attributable to non-controlling interests 9 NMF — Net income attributable to the Company $ 993 14.0 % $ 871 Income Before Income Taxes Margin (1) 27.1 % 26.9 % EBITDAC - Adjusted (2) $ 1,689 17.0 % $ 1,444 EBITDAC Margin - Adjusted (2) 35.2 % 33.9 % Organic Revenue growth rate (2) 10.4 % 10.3 % Employee compensation and benefits relative to total revenues 50.1 % 51.4 % Other operating expenses relative to total revenues 14.8 % 15.3 % Capital expenditures $ 82 18.8 % $ 69 Total assets at December 31, $ 17,612 18.3 % $ 14,883 (2) “Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues (3) A non-GAAP financial measure NMF = Not a meaningful figure Commissions and Fees Commissions and fees, including profit-sharing contingent commissions and earned premiums for 2024, increased $506.0 million to $4,705 million, or 12.1% over 2023.
Financial information relating to our Consolidated Financial Results is as follows: (in millions, except percentages) 2025 % Change 2024 REVENUES Core commissions and fees $ 5,508 21.3 % $ 4,539 Profit-sharing contingent commissions 255 53.6 % 166 Investment income and other income 139 39.0 % 100 Total revenues 5,902 22.8 % 4,805 EXPENSES Employee compensation and benefits 2,935 22.0 % 2,406 Other operating expenses 959 35.1 % 710 (Gain)/loss on disposal 2 (106.5 )% (31 ) Amortization 312 75.3 % 178 Depreciation 55 25.0 % 44 Interest 297 53.9 % 193 Change in estimated acquisition earn-out payables 25 NMF 2 Mark-to-market of escrow liability (54 ) NMF — Total expenses 4,531 29.4 % 3,502 Income before income taxes 1,371 5.2 % 1,303 Income taxes 304 1.0 % 301 Net income before non-controlling interests 1,067 6.5 % 1,002 Less: Net income attributable to non-controlling interests 13 44.4 % 9 Net income attributable to the Company $ 1,054 6.1 % $ 993 Income Before Income Taxes Margin (1) 23.2 % 27.1 % EBITDAC - Adjusted (2) $ 2,121 25.6 % $ 1,689 EBITDAC Margin - Adjusted (2) 35.9 % 35.2 % Organic Revenue growth rate (2) 2.8 % 10.4 % Employee compensation and benefits relative to total revenues 49.7 % 50.1 % Other operating expenses relative to total revenues 16.2 % 14.8 % (1) “Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues (2) A non-GAAP financial measure NMF = Not a meaningful figure Commissions and Fees Commissions and fees, including profit-sharing contingent commissions and earned premiums for 2025, increased $1,058 million to $5,763 million, or 22.5% over 2024.
Gain or Loss on Disposal The Company recognized net gains on disposals of $31 million in 2024 and $143 million in 2023. The gains on disposal were primarily attributable to the selling of certain third-party claims administration and adjusting services businesses in the fourth quarter of 2023 and settlement of certain related contingent payments in 2024.
Gain or Loss on Disposal The Company recognized a net loss on disposal of $2 million in 2025 and a net gain on disposal $31 million in 2024. The amount for 2024 was primarily attributable to the prior year finalization of the gain associated with selling certain third-party claims administration and adjusting services businesses in the fourth quarter of 2023.
This change includes: (i) $27 million of other operating expenses related to stand-alone acquisitions that had no comparable costs in the same period of 2023; (ii) increased information technology-related costs; (iii) and to a lesser extent, increased variable costs associated with revenue growth, offset by (iv) the 1Q23 Nonrecurring Cost (v) other operating expenses associated with certain third-party claims administration and adjusting services businesses divested in the fourth quarter of 2023 and (vi) the year-over-year decrease of approximately $21 million in the value of assets held to fund the associated liabilities within our deferred compensation plan, which was substantially offset within employee compensation and benefits, as noted above.
This change includes: (i) $161 million of other operating expenses related to acquisitions that had no comparable costs in the same period of 2024; (ii) $113 million of Acquisition/Integration Costs that had no comparable costs in the same period of 2024; and (iii) increased information technology-related costs, partially offset by (iv) lower claims costs within our captives and (v) the year-over-year decrease of approximately $12 million in the value of assets held to fund the associated liabilities within our deferred compensation plan, which was substantially offset within employee compensation and benefits, as noted above.
As a result of the awarding of these shares, the 32 grantees will be eligible to receive payments of dividends and exercise voting privileges. The awarded shares will be included as issued and outstanding common stock shares and included in the calculation of basic and diluted net income per share.
With respect to performance-based restricted stock awards that become awarded, the grantees are eligible to receive payments of dividends and exercise voting privileges from the awarded date, and the awarded shares are included as issued and outstanding common stock shares and included in the calculation of basic and diluted net income per share.
(2) Includes $167 million of current and non-current estimated earn-out payables. Earn-out payables for acquisitions not denominated in U.S. dollars are measured at the current foreign exchange rate. Five of the estimated acquisition earn-out payables include provisions with no maximum potential earn-out amount. The amount recorded for these acquisitions as of December 31, 2024, is $4 million.
(2) Includes $37 million of future lease commitments expected to commence in 2026. (3) Includes $541 million of current and non-current estimated earn-out payables. Earn-out payables for acquisitions not denominated in U.S. dollars are measured at the current foreign exchange rate. Certain acquisition agreements include provisions with no maximum potential earn-out amount.
As of December 31, 2024, the fair values of the estimated acquisition earn-out payables were reevaluated and measured at fair value on a recurring basis using unobservable inputs (Level 3) as defined in ASC 820 - Fair Value Measurement .
The net charge or credit to the Consolidated Statements of Income for the period is the combination of the net change in the estimated acquisition earn-out payables liability, and the accretion of the present value discount on those liabilities. 37 As of December 31, 2025, the fair values of the estimated acquisition earn-out payables were reevaluated and measured at fair value on a recurring basis using unobservable inputs (Level 3) as defined in ASC 820 - Fair Value Measurement .
Financial information relating to our Programs segment for the 12 months ended December 31, 2024 and 2023 is as follows: (in millions, except percentages) 2024 % Change 2023 REVENUES Core commissions and fees $ 1,280 16.9 % $ 1,095 Profit-sharing contingent commissions 95 46.2 % 65 Investment income 23 91.7 % 12 Other income, net 2 100.0 % 1 Total revenues 1,400 19.4 % 1,173 EXPENSES Employee compensation and benefits 450 5.9 % 425 Other operating expenses 290 17.4 % 247 (Gain)/loss on disposal (28 ) (80.1 )% (141 ) Amortization 47 11.9 % 42 Depreciation 15 15.4 % 13 Interest 30 (16.7 )% 36 Change in estimated acquisition earn-out payables (7 ) NMF — Total expenses 797 28.1 % 622 Income before income taxes $ 603 9.4 % $ 551 Income Before Income Taxes Margin (1) 43.1 % 47.0 % EBITDAC - Adjusted (2) $ 660 31.7 % $ 501 EBITDAC Margin - Adjusted (2) 47.1 % 42.7 % Organic Revenue growth rate (2) 22.4 % 16.1 % Employee compensation and benefits relative to total revenues 32.1 % 36.2 % Other operating expenses relative to total revenues 20.7 % 21.1 % Capital expenditures $ 15 (11.8 )% $ 17 Total assets at December 31 $ 6,158 47.0 % $ 4,188 (1) “Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues (2) A non-GAAP financial measure NMF = Not a meaningful figure The Programs segment’s total revenue for 2024 increased 19.4%, or $227 million, as compared to the same period in 2023, to $1,400 million.
Financial information relating to our Specialty Distribution segment for the 12 months ended December 31, 2025 and 2024 is as follows: (in millions, except percentages) 2025 % Change 2024 REVENUES Core commissions and fees $ 2,196 17.9 % $ 1,863 Profit-sharing contingent commissions 183 50.0 % 122 Investment and other income 30 (3.2 )% 31 Total revenues 2,409 19.5 % 2,016 EXPENSES Employee compensation and benefits 919 19.0 % 772 Other operating expenses 458 19.9 % 382 (Gain)/loss on disposal — (100.0 )% (28 ) Amortization 93 57.6 % 59 Depreciation 19 5.6 % 18 Interest 38 (7.3 )% 41 Change in estimated acquisition earn-out payables 17 NMF (6 ) Total expenses 1,544 24.7 % 1,238 Income before income taxes $ 865 11.2 % $ 778 Income Before Income Taxes Margin (1) 35.9 % 38.6 % EBITDAC - Adjusted (2) $ 1,038 20.4 % $ 862 EBITDAC Margin - Adjusted (2) 43.1 % 42.8 % Organic Revenue growth rate (2) 2.8 % 17.8 % Employee compensation and benefits relative to total revenues 38.1 % 38.3 % Other operating expenses relative to total revenues 19.0 % 18.9 % (1) “Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues (2) A non-GAAP financial measure NMF = Not a meaningful figure The Specialty Distribution segment’s total revenue for 2025 increased 19.5%, or $393 million, as compared to the same period in 2024, to $2,409 million.
Income before income taxes for 2024 increased 12.1%, or $65 million, over the same period in 2023, to $602 million.
Income before income taxes for 2025 increased 17.4%, or $105 million, over the same period in 2024, to $707 million.
The recorded purchase prices for all acquisitions include an estimation of the fair value of liabilities associated with any potential earn-out provisions, where an earn-out is part of the negotiated transaction.
The recorded purchase prices include an estimation of the fair value of liabilities associated with any potential contingent consideration provisions (such as earn-out obligations).
The reconciliation of income before income taxes, included in the Consolidated Statements of Income, to EBITDAC, a non-GAAP measure, and EBITDAC - Adjusted, a non-GAAP measure, and Income Before Income Taxes Margin to EBITDAC Margin, a non-GAAP measure, and EBITDAC Margin - Adjusted, a non-GAAP measure, for the year ended December 31, 2024, including by segment, is as follows: (in millions) Retail Programs Wholesale Brokerage Other Total Total Revenues $ 2,729 $ 1,400 $ 616 $ 60 $ 4,805 Income before income taxes 602 603 175 (77 ) 1,303 Income Before Income Taxes Margin (1) 22.1 % 43.1 % 28.4 % NMF 27.1 % Amortization 119 47 12 — 178 Depreciation 21 15 3 5 44 Interest 71 30 11 81 193 Change in estimated acquisition earn-out payables 8 (7 ) 1 — 2 EBITDAC (2) $ 821 $ 688 $ 202 $ 9 $ 1,720 EBITDAC Margin (2) 30.1 % 49.1 % 32.8 % NMF 35.8 % (Gain)/loss on disposal (3 ) (28 ) - - (31 ) EBITDAC - Adjusted (2) $ 818 $ 660 $ 202 $ 9 $ 1,689 EBITDAC Margin - Adjusted (2) 30.0 % 47.1 % 32.8 % NMF 35.2 % (1) “Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues (2) A non-GAAP financial measure.
NMF = Not a meaningful figure 39 The reconciliation of income before income taxes, included in the Consolidated Statements of Income, to EBITDAC, a non-GAAP measure, and EBITDAC - Adjusted, a non-GAAP measure, and Income Before Income Taxes Margin to EBITDAC Margin, a non-GAAP measure, and EBITDAC Margin - Adjusted, a non-GAAP measure, for the year ended December 31, 2024, including by segment, is as follows: (in millions) Retail Specialty Distribution Other Total Total Revenues $ 2,729 $ 2,016 $ 60 $ 4,805 Income before income taxes 602 778 (77 ) 1,303 Income Before Income Taxes Margin (1) 22.1 % 38.6 % NMF 27.1 % Amortization 119 59 — 178 Depreciation 21 18 5 44 Interest 71 41 81 193 Change in estimated acquisition earn-out payables 8 (6 ) — 2 EBITDAC (2) $ 821 $ 890 $ 9 $ 1,720 'EBITDAC Margin (2) 30.1 % 44.1 % NMF 35.8 % (Gain)/loss on disposal (3 ) (28 ) — (31 ) Acquisition/Integration Costs — — — — Mark-to-market of escrow liability — — — — EBITDAC - Adjusted (2) 818 862 9 1,689 EBITDAC Margin - Adjusted (2) 30.0 % 42.8 % NMF 35.2 % (1) “Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues (2) A non-GAAP financial measure NMF = Not a meaningful figure 40 Retail Segment The Retail segment provides a broad range of insurance products and services to commercial, public and quasi-public, professional and individual insured customers, and non-insurance risk-mitigating products through our F&I businesses.
Management assesses the recoverability of our goodwill and our amortizable intangibles and other long-lived assets annually and whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable.
Changes in these estimates and assumptions could affect the carrying value of purchased customer accounts, earnout obligations, and the related future expenses. Intangible Assets Impairment Management assesses the recoverability of our goodwill and our amortizable intangible assets annually and whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable.
We present these measures because we believe such information is of interest to the investment community. We believe they provide additional meaningful methods to evaluate the Company’s operating performance from period to period.
We present these measures because we believe such information is of interest to the investment community.
Our revenues grew from $95.6 million in 1993 to $4.8 billion in 2024, reflecting a compound annual growth rate of 13.5%. In the same 31-year period, we increased net income from $8.1 million to $1.0 billion in 2024, a 16.8% compound annual growth rate.
In the same 32-year period, we increased net income from $8.1 million to over $1.0 billion in 2025, a 16.9% compound annual growth rate.
Including the expansion options under all existing credit agreements, the Company has access to up to $1,450 million of incremental borrowing capacity as of December 31, 2024. Cash and cash equivalents totaled $675 million at December 31, 2024 reflecting a decrease of $25 million from the $700 million balance at December 31, 2023.
Including the expansion options under all existing credit agreements, the Company has access to up to $1,600 million of incremental borrowing capacity as of December 31, 2025.
Depreciation Depreciation expense for 2024 increased $4 million to $44 million, or 10.0% over 2023.
Depreciation Depreciation expense for 2025 increased $11 million to $55 million, or 25.0% over 2024.
EBITDAC - Adjusted for 2024 increased 31.7%, or $159 million, from the same period in 2023, to $660 million. EBITDAC Margin - Adjusted for 2024 increased to 47.1% from 42.7%.
EBITDAC - Adjusted for 2025 increased 20.4%, or $176 million, from the same period in 2024, to $1,038 million. EBITDAC Margin - Adjusted for 2025 increased to 43.1% from 42.8%.
The Company's next scheduled principal payment of $6 million is due in March 2025. During the twelve months ended December 31, 2024, the Company repaid $44 million of principal related to the Term Loans issued under the Term A-2 Loan Commitment (“Term A-2 Loans”) through quarterly scheduled principal payments.
Although the Company intends to refinance or extend these facilities, no such agreements were in place as of period end. During the twelve months ended December 31, 2025, the Company repaid $50 million of principal related to the Term Loans issued under the Term A-2 Loan Commitment (“Term A-2 Loans”) through quarterly scheduled principal payments.
The decrease includes: the scheduled principal payments related to our various existing floating-rate debt term notes in total of $250 million; offset by the amortization of discounted debt related to our various unsecured Senior Notes, and debt issuance cost amortization of $4 million and the net increase of $100 million balance on the Revolving Credit Facility.
The increase includes the issuance of $4,192 million of senior notes net of the unamortized debt discounts and the amortization of discounted debt related to our various unsecured senior notes and debt issuance cost amortization of $8 million, offset by the addition of deferred debt issuance costs of $36 million, $225 million of payments on outstanding term loan balances and net payments on the Revolving Credit Facility of $150 million.
The decrease was primarily due to the sale of certain third-party claims administration and adjusting services businesses in the fourth quarter of 2023.
The decrease is attributed to the proceeds received during the second quarter of 2024 of $57 million from the settlement of two of the contingent payments related to the sale of certain third-party claims administration and adjusting services businesses in the fourth quarter of 2023.
The primary factors driving this increase were: (i) a decrease in allocated interest expense, (ii) the profit associated with the net increase in revenue as described above and partially offset by, (iii) the increase in the change in estimated acquisition earn-out payables.
The primary factors driving this increase were: (i) the profit associated with the net increase in revenue as described above and (ii) a decrease in intercompany interest expense, partially offset by (iii) increased amortization and depreciation expense; and (iv) Acquisition/Integration Costs. EBITDAC - Adjusted for 2025 increased 24.9%, or $204 million, from the same period in 2024, to $1,022 million.
Profit-sharing contingent commissions in 2024 increased 46.2%, or $30 million, from 2023, to $95 million which was primarily driven by qualifying for certain contingent commissions that we did not qualify for in the prior year, favorable loss ratios, prior year adjustments and acquisitions. Total commissions and fees increase 18.5% and the Organic Revenue growth rate was 22.4% for 2024.
Profit-sharing contingent commissions in 2025 increased 50.0%, or $61 million, from 2024, to $183 million which was primarily driven by favorable loss ratios, increased premiums, and acquisitions completed in the past twelve months. 42 Total commissions and fees increased 19.8% and the Organic Revenue growth rate was 2.8% for 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed4 unchanged
Biggest changeWe are subject to translational exchange rate risk having businesses operating outside of the U.S. in the following functional currencies, British pounds, Canadian dollar and euros and other currencies to a lesser extent.
Biggest changeWe are subject to translation exchange rate risk because we have businesses operating outside of the U.S. in the following functional currencies: British pounds, Canadian dollar and euros and, to a lesser extent, other currencies.
The fair value of our invested assets at December 31, 2024 and December 31, 2023, approximated their respective carrying values due to their short-term duration and therefore, such market risk is not considered to be material. We do not actively invest or trade in equity securities.
The fair value of our invested assets at December 31, 2025 and December 31, 2024, approximated their respective carrying values due to their short-term duration and therefore, such market risk is not considered to be material. We do not actively invest or trade in equity securities.
In addition, we generally dispose of any equity securities received in conjunction with an acquisition shortly after the acquisition date. As of December 31, 2024, we had $1,006 million outstanding under the Second Amended and Restated Credit Agreement and the Loan Agreement tied to the Secured Overnight Financing Rate (“SOFR”).
In addition, we generally dispose of any equity securities received in conjunction with an acquisition shortly after the acquisition date. As of December 31, 2025, we had $632 million outstanding under the Second Amended and Restated Credit Agreement and the Loan Agreement tied to the Secured Overnight Financing Rate (“SOFR”).
Based upon our foreign currency rate exposure as of December 31, 2024, an immediate 10% hypothetical change of foreign currency exchange rates would not have a material effect on our Consolidated Financial Statements. 45
Based upon our foreign currency rate exposure as of December 31, 2025, an immediate 10% hypothetical change of foreign currency exchange rates would not have a material effect on our Consolidated Financial Statements. 47

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