How much exposure they have to cat property rates ?

Brown & Brown (BRO) management does not explicitly break out the exact percentage of total corporate revenue tied to catastrophe (CAT) property premiums in their public financial filings. However, their exposure is structurally much higher than highly diversified mega-brokers like Marsh or Aon.

Here is a breakdown of where that exposure lives and why it heavily impacts their top line:

1. Geographic Footprint

Headquartered in Florida, BRO maintains a massive concentration of retail operations across the Southeast and Gulf Coast. Because of this footprint, a disproportionate share of their middle-market retail book naturally consists of coastal property, wind, and flood coverages.

2. Heavy Weight in Specialty and Programs

The bulk of their CAT exposure sits in their wholesale and delegated authority segments:

• Specialty Distribution: This segment relies heavily on the Excess & Surplus (E&S) market to place hard-to-write coastal and CAT property risks for other retail brokers.
• National Programs: BRO manages massive, property-heavy delegated authority facilities, including Wright National Flood (one of the largest Write-Your-Own flood providers in the US) and various earthquake and wind programs.

3. The Mechanics of Commission Compression

Broker compensation is primarily driven by a percentage of the underlying premium. During the recent "hard" insurance market, property rates skyrocketed, and BRO's revenue surged as they collected commissions on those inflated premiums.

Currently, the cycle is turning. Alternative capital has returned to the reinsurance and E&S markets, driving a softening pricing environment. With CAT property rates dropping—in some tranches by 15% to 35%—the underlying premium pool is shrinking. Consequently, even if BRO retains all of its clients, the absolute commission dollars generated on those renewals contract, which directly drags down their overall organic growth.